Hey banks – no reputation building campaigns, please
While the banks' reputations are undoubtedly in trouble, now is not the time to start pushing the redemption narrative, writes crisis comms expert Tony Jaques.
Financial institutions across Australia are enduring their worst reputational crisis for a generation, and there is every likelihood it will get a lot worse before it starts to improve. But now is absolutely not the time to launch some hopeful “reputation building initiative.”
Recent evidence at the Banking Royal Commission commenced to shred the reputation of banks, wealth management funds and other financial institutions.
Then, within the space of a few days, the Commonwealth Bank agreed to a $700 million fine for money laundering – the largest fine in Australian corporate history – and criminal charges were laid against three major banks and six of their highest executives over alleged cartel behaviour to artificially inflate the price of ANZ shares.
There is nothing like the threat of prison to focus the mind, and right now the unprecedented collapse of reputation in the finance sector is doubtless triggering some long-overdue soul-searching in boardrooms across the country.
And it’s not just a crisis confined to Australia. Two of the banks facing criminal charges over the ANZ cartel scandal are major global players – Citigroup and Deutsche Bank – while a third global organisation, J.P. Morgan, reportedly avoided prosecution by blowing the whistle on the deal.
At the same time, the reputational crisis engulfing Australia’s banks has had another immediate international impact. Westpac lost top spot as the “world’s most sustainable bank” (as measured by the Dow Jones Sustainability Index) and the other “big four” also dropping down the rankings.
It’s doom on all sides – and the Banking Royal Commission has many months of expected damaging evidence still to come. In the face of this onslaught it’s a sure bet that some worried executives are asking: “What can we do to restore our reputation?” But in the midst of a continually unfolding crisis it’s the wrong question. It should be: “What can we do to change our ways and perform better?”
The fundamental problem is not reputation as such. It’s years, maybe decades, of bad behaviour which is now coming to light and having a very predictable effect. The public are looking for tangible evidence of improvement, not platitudes and promises. And a feel-good reputation campaign just won’t cut it. Look no further than the recent Bankers Association advertising campaign on the theme “Australian banks belong to you” with the message “Profits don’t belong to the banks, they belong to everyday Australians like you.”
That all sounds rather hollow when financial institutions are admitting in evidence before the Royal Commission to long-standing policies and grave mistakes which sometimes drove those same “everyday Australians” needlessly into bankruptcy and ruin.
Crisis managers everywhere ought to know the difference between branding and reputation. Branding is what you say about yourself.
Reputation is what other people say about you. Reputation derives from how you behave and how it’s perceived, not from clever image-building and not from promises about what you plan to do. In other words, honestly address the bad stuff first and reputation repair should follow.
As the saying goes: You can’t communicate your way out of a problem you’ve behaved yourself into. Moreover, we know from research that the credibility of business is low, and falling, and self-serving messages from big businesses during a reputational crisis are not likely to succeed. They may even backfire.
Way back in 1845, Henry Mahew penned a famous quip for Punch: “Advice to young persons about to marry – Don’t.” To paraphrase this Victorian witticism: “Advice to bankers about to suggest an image-building reputation campaign – Don’t. Please.”
This piece first appeared in Tony Jaques’ Issue Outcomes newsletter. You can subscribe here.
Very good advice.
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Bit of a tangent but I’m interested in how general trust for business got low and stayed there. The GFC was probably the main modern reason, and the Banks recent behaviour leading to loss of trust isn’t really a mystery.
What I don’t get is business in general not wanting to do anything substantial to help its image. Take this own goal for example:
https://www.smh.com.au/opinion/antipenalty-rates-campaign-backfires-20150406-1mfblu.html
And it seems every time Business is in the news the BSA wheels out a spokesperson who for some reason thinks it makes sense to whine about having to pay tax and complain about the lack of infrastructure in Australia at the same time. Where is the logic behind expecting governments to pay your way for you while refusing them their source of revenue?
Or look at that recent pledge to pay their taxes in exchange for tax cuts. Basically saying if you bribe me I’ll comply with the law. Blatant admission of crime – not just admitted but “advertised”. Who in brand management is advising these people?
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Businesses will need tax cuts in order to be able to afford to improve their image – simple!
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In the old days a large marketing effort might have worked. Re they (corporations) pretty much owned the media, in terms of coverage. Now enter social media and reviews and it isn’t down to your marketing budget to build a brand, it is down to action, service, quality and so on.
I saw an ad for Westpac, which was pretty much saying how great is Westpac for saving people, (Helicopter). I am not sure if the majority of our population would have thought the same thoughts as me, which were: ‘It is the least you can do you tax dodging, money hoarding, dodgy bstards!’. Perhaps? Perhaps not?
In 2018, the customer is in charge. Will we see a move to embrace banks owned by Australia’s, vs the top 4, which are owned by overseas banks? We shall find out…
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