When the worst U.S. financial crisis since the Depression hit, financial communicators at the affected companies immediately went into crisis mode, forced to play reactive strategies as the industry suffered a meltdown.
Some three years later, financial services PR pros are adjusting to a lingering reality: Public trust in the sector is at an all-time low. The 2011 Edelman Trust Barometer index shows insurance, banking and other financial service companies at the bottom of the trust ladder.
In the case of finance, the saying “time heals all wounds” doesn’t seem to be ringing true. Witness last week’s protest at the Chase annual shareholders meeting in Columbus, Ohio, where officers were forced to use mace to control the crowd outside. To be sure, the climb back to respectability will be a slow one, says Dan Bartlett, president and CEO of Hill & Knowlton USA, and an expert on the American and global economies. “This isn’t going to let up,” says Bartlett, referring to the public distrust faced by the industry. “The game has fundamentally changed, and communicators are having to stretch muscles they’ve never used before.”
A COMMS SEA CHANGE
So just how are communicators in financial services adjusting to the “new normal”? Are they still in reactive mode as opposed to proactive? How have their strategies changed within the last few years, and what lessons can communicators across industries take away from the financial services experience? PR News spoke with experts in academia, agency and corporate settings to find out.
Bartlett, who is also the chairman and CEO of Public Strategies, a business advisory arm of H&K, has felt the heat of the public’s wrath, having been one of George W. Bush’s most trusted communications advisers during his presidency.
He has seen a major trend within financial communications in just the last year, as institutions have been making an “earnest attempt to do something they’ve never had to do,” says Bartlett. And that is, he continues, explain their business model to a broader audience outside of their customer base.
“The scrutiny of politicians, regulators and the public has forced them to do that,” says Bartlett (see sidebar for his lessons learned from the crisis).
According to Michael Robinson, senior VP at Levick Strategic Communications and strategist for financial market companies, says that financial communications has split into two levels. One is “elite” communications targeting opinion leaders, regulators and institutional investors, for example. “Communications that are important to a few people,” says Robinson. The other level is now far more prevalent and important, he says. And that is the public audience, where a residual anger against the industry resides.
Those who are angry have found a voice and a conduit in digital/social media that is free and limitless, continues Robinson. “The Web is limitless in terms of how you can voice your thoughts and interact with vast numbers of like-minded people,” he says. Some financial institutions are handling this better than others.
MESSAGE VS. MESSENGER
In terms of messaging trends, Robinson has seen progress. Financial communicators are shifting the value of their organizations from themselves to what they enable—a conduit for employment growth, starting businesses, helping people pay their taxes and owning a home, for example. “Before, the story was not about what the bank created, but about the bank,” says Robinson. The bottom line: “It’s hard to talk your way out of something you’ve acted your way into,” he says.
Even financial institutions that were not directly affected by the crisis have adjusted their communications. Dave Hogan, director of investor relations and corporate communications for First Financial Bankshares, a community bank based in Texas, says that as a community bank, First Financial has always differentiated itself from the mega-banks in terms of being closer to the community and its customers.
In 2009 and 2010 the bank held a series of local shareholder meetings, in which the CEO would answer questions from shareholders who, in the case of community banks, are customers. Many of the questions would involve what shareholders were reading in the media about the financial crisis, says Hogan. Yet most community banks have weathered the storm relatively unscathed, and the PR reflects that. Messaging around “we’re here and here to stay” abound.
LEARNING FROM PRESSURE
So communicators are adjusting. But in 2008 they faced a firestorm that they couldn’t have imagined. That year, Marcia DiStaso, assistant professor in the Department of Advertising and Public Relations at Penn State University, conducted a focus group of financial comms pros who were under the gun. “They were trying to be proactive, but the extent that they were being reactive was startling to me,” she says. DiStaso then wrote a report for the PRSA’s Financial Communications arm. Some of the observations from the comms pros include:
• Their existing communication plans were “not strong enough,” as in one case, frequency of communications had tripled.
• Digital tools such as Web sites were being put into play for better explaining of positions to customers.
• Media coordination with CEOs and CFOs was challenging, as executives had less time for responding to specific reporters.
So how is the industry doing today? Robinson, based in Washington, D.C., and an obvious Redskins fan, says financial communications today can be characterized by the team’s Hall of Fame running back John Riggins, known for his ability to make three or four yards every carry. It wasn’t about making the big gain—it was about consistently making progress. “That’s where financial institutions are right now.”
Except when they’re being thrown for a loss, like in Columbus. PRN