On the 20th anniversary of the “Big Bang” in the City of London—the 1986 reform of the London Stock Exchange and deregulation of financial services markets—a new survey of leading City opinion formers by financial services public relations specialist Penrose Financial says that the event changed the way financial institutions marketed themselves and was instrumental in the development of the now booming financial PR industry.
The vast majority (89 percent) of respondents said they believe a strong and positive media image is more important to the growth and success of their company than it was 20 years ago, which is reflected in significantly higher PR budgets. The same number also said that chief executives are now involved in their firms’ PR activity, highlighting the importance attached to reputation management at the highest level.
The most important reasons for the increased focus on reputation management are that financial markets are now less opaque and more open to scrutiny and that there is increased competition in the marketplace for new business: a direct consequence of the deregulation of financial services.
Other highlights of the survey include:
• 93 percent of respondents believe they communicate better than 20 years ago
• 81 percent of respondents said that the percentage of their marketing budget allocated is significantly more or a bit more than 20 years
• Blogging and the EU’s proposed MiFID (Markets in Financial Instruments Directive) are not seen as major threats to brand reputation
• Shareholder and investor pressure to improve brand strength, the brand strength of competitors and increased globalisation are the three factors most likely impact use of PR in the next five years.
According to Gay Collins, managing director of Penrose Financial: “Big Bang broke down the barriers to competition in the City and left many firms fighting to survive. In this more dynamic marketplace companies began to realize that their brand was the key to success and that this had to be proactively built and protected. Those firms who believed they could rely on their established place in the City’s pecking order were the ones who inevitably disappeared or were taken over.
“The survey shows that firms have come to realise the value of reputation management and are prepared to invest in protecting and strengthening their public image. The fact that 89 percent of chief executives are involved in PR activity at some level, demonstrates that PR has become a topic for the boardroom.”