Only 8 percent of Americans today have full confidence in banks and financial services companies, according to a new nationwide consumer poll conducted by Waggener Edstrom Worldwide and RT Strategies. This single-digit score marks a steep decline from the 31 percent confidence level the industry earned in polls conducted as recently as 2006.
Surprisingly, in the midst of the overwhelming lack of confidence in the industry, consumers still say that they have either “heard nothing” from the industry or that they “don’t like what they have heard.”
But while the industry suffers from a significantly diminished reputation, consumers still hold a fairly balanced view of recent actions taken by the industry—particularly the institutions that have received federal Troubled Assets Relief Program (TARP) funds. In this important area, Americans are clearly listening to what banks have to say right now, and so far are split evenly between those giving banks credit for good use of federal funds and those with doubts.
“Ironically, at a time when the financial services industry has the most at stake, its communications with consumers and policymakers have descended to a strikingly low level,” says Torod Neptune, senior vice president and global public affairs practice leader at Waggener Edstrom Worldwide. “Perhaps one of the most jarring findings in this survey is the sheer lack of industry leadership in communicating what financial services companies are doing to aid in a broad-based economic recovery,”
Specifically, the survey found that 44 percent of respondents said they had heard something from the industry but felt more negative after hearing it, suggesting that media coverage or advertising is shaping public opinion more than direct communication from the industry; 11 percent have heard something from the industry and felt better about the industry after hearing it, suggesting that when there is authentic and credible communication, it positively influences widely held opinions about the industry overall; and 38 percent have heard nothing directly from the industry at all.
“Americans are looking to banks and the financial services industry for answers, and so far, they are hearing none,” said Thomas Riehle, managing partner with RT Strategies, a bipartisan public affairs polling firm. “Historically we see a two-to-one positive score on what people have heard, given institutional attempts to present a positive image via PR and marketing, so when it falls as far as one-to-one, we know an institution is controversial and in trouble.
“In that context, these scores (four-to-one negative) are miserable.”
Despite the low vote of confidence, consumers still appear willing to give the industry the benefit of the doubt on questions about industry practices, such as the use of TARP funds. For example 28 percent said they believe that banks are using the recently secured federal TARP funds to make consumer loans; 23 percent said they believed the industry was using the funds to make business loans; 27 percent said they believed the industry was holding the funds in reserve; and 21 percent said they believed the industry was using the funds to pay salaries and bonuses for its executives.
Says Neputne: “Despite the overwhelmingly negative media coverage of the industry in the past few weeks, it was surprising to see that consumers still express a fairly balanced view of the industry and even acknowledge some of its recent positive contributions to economic recovery. Clearly there lies a huge opportunity for financial services leaders to step forward in the midst of this storm—but they need to proactively communicate.”