Main Image Detail77073115 / Radius Images / Radius Images
Save & Download
Headlines around failing banks, the necessity for public money to support financial institutions, and stories around bonuses have shaped a general perception of financial services. This public perception of financial services is captured in some remarkable data from global public relations firm Edelman in their 2010 United Financial Services Trust Barometer.
Edelman track an evolution in the social dynamics of ‘Trust’ over the decade, highlighting that in 2007, business was seen as being more trustworthy than government, to 2010 where business needs to partner with government to regain trust. A quick turnaround in perception.
“Issues of trust, security and integrity will be foremost in people’s minds,” says Dr Harrison because they need to be sure, “that the institutions that they have their money with are still going to be safe.” The Edelman survey shows that there is a fine line between a lack of trust and a more generalized culture of suspicion.
Mintel also confirm this in a recent survey where 7 out of 10 adults spoke of a lack of trust in the financial service industry as a whole. In the report, Susan Menke, a behavioral economist at Mintel Comperemedia argued that earning back people’s trust needs to be done on peoples’ terms, “companies need to look at trust from the individual’s perspective, focusing on values like honesty, fairness and consistency. They need to make the customer feel safe and secure.”
But what is driving this is not just a lack of trust but a wider re-evaluation by citizens and consumers about how they are living their life.
At Getty Images we have been tracking the emerging Simplicity trend since 2007 and Mintel’s research suggest this has become the dominant psychology of the post-crunch consumer, ‘nearly 8 in 10 people (78%) told Mintel they’ve been simplifying their lives lately,’ says the report, while more than three-quarters of Mintel survey respondents said they intend to permanently increase their savings rate, and 84% said they plan to be more conservative with money in the future.” And this is also why, as Bill Wreaks, Editor of the Journal of Financial Services Advertising told us, we may see greater use of platforms such as mobile banking, which are marketed on the basis of making things like banking easier and simpler.
Bill Wreaks also runs the Gramercy Institute, a network of 1100 senior marketing executives of major financial firms. Their Journal of Financial Advertising and Marketing publishes intelligence for senior marketers from major financial institutions.
The Gramercy Institute hosts around 20 events a year focussing on what senior marketers from major financial firms are thinking about.
At your recent event, what was uppermost in the minds of the marketing executives?
The resounding chorus and refrain is that ‘trust has been betrayed’ and the only road home for so many of these brands is to rebuild trust.
It’s an overarching strategy for so many financial services institutions at the micro-level, at the company level, but also at the macro-level. If no one trusts financial institutions in general, individual companies suffer as well.
The movie Wall Street 2 is some reflection of how the atmosphere around ‘money’ and finance has changed. How much of a change has there been in peoples’ relationship to money and financial institutions?
There’s much more of a respect for money. There’s an old adage, “fool me once shame on you, fool me twice, shame on me”. People are really aware of what could happen with the wrong investment, in the wrong place, with the wrong company, and that nothing can be counted. That’s the biggest thing that’s changed.
What is the road back to rebuilding trust?
I haven’t gone back just yet to look closely at the transcripts from our recent Gramercy Institute event but my impression is that there were two significant takeaways.
Firstly, whether it’s business-to-business or business-to-consumer, users of financial services are making sure they know the full story. They have been demanding transparency.
What seemed to come out of our summit was the overarching understanding that financial firms no longer can simply hold out a plaque and say, “trust me.” Or, “let me tell you how old my institution is because that should speak volumes about how you should trust me.”
It is now all about opening up the kimono and showing the world what you are all about. And even beyond that, also open up and show us your processes, how you do business. I noted a second over-arching sentiment, an internal acknowledgement among financial services companies that there seems to be a real need to connect marketing to customer services. It’s the nitty-gritty customer service that has got to embody those things that are being demanded, the transparency, they want to know they are dealing with a professional organisation that can help them get things done.
What about new channels for financial services, such as mobile banking?
From a strategic vantage point, a lot of marketers are hanging their hats on mobile banking, from a long-term view. They should promote it because it is value. Not promoting how old or how trustworthy we are, but as a point of differentiation, showing ‘this is where we provide value’. Mobile banking would be a smart advertising move for institutions who can back it up.
The shock of the financial crisis has brought about a fundamental shift in consumer thinking. Consumers currently have a radically different set of criteria to evaluate banks and financial services organizations. They are concerned more about honesty and transparency as than they are about financial returns. Financial services communications need to shift away from complexity, from ideas around leadership and focus on simple communications that address deep consumer anxieties around trust and fairness.
The general public and businesses have a different relationship to money, and to the institutions that provide financial services.
“For all industries, corporate reputation is now based on trust and transparency as much as leadership and share-price performance.” Edelman. There is a wider re-evaluation by citizens and consumers about how they are living their life.
“Companies need to look at trust from the individual’s perspective, focusing on values like honesty, fairness and consistency.” Susan Menke, Mintel Comperemedia.