Financial Services Communications Post-Crisis

Even with markets now reaching all-time highs, uncertainty regarding how long the prosperity will last continues to loom. Knowing the customer, the audience and how the media landscape has changed is a key to rebuilding the areas of the financial services industry’s reputation that haven’t come all the way back.

Landscape changed

In the aftermath of the Great Recession, regulators imposed rules on banks and other financial services firms designed to prevent the risky practices that many believe led to the crisis. Stripped of their ability to trade on their own behalf, dole out high-risk loans, or hold hard-to-value securities, most firms have had to cut costs while also fighting a credibility gap with a public that is sometimes still bitter about the past. Exacerbating that trust problem right now is a major demographic shift, in which Millennials are stepping into the shoes of retiring boomers as the target customer for financial services firms.

Trust and credibility

The challenge for financial services firms in communicating with Millennials is partly about trust and credibility. While most banks and financial services firms have recovered financially and then some, they’ve been slower to rebuild their reputations with Millennials. In fact, 71 percent of Millennials would rather go to the dentist than listen to their banks, according to the Millennial Disruption Index. In turn, many Millennials do as much of their banking as possible with start-up fintech firms, not only because of their lack of trust of the traditional players but also their propensity to do everything online.

Financial services firms have thus turned their attention to using social media to engage with their customers more and more, according to several recent surveys.

Talent, talent, talent

The trust and credibility gap isn’t just about customers, it’s also about talent. Smart financial services firms also understand the lingering effects of the Great Recession on recruiting, retention and employee satisfaction. A Quantum Workplace study shows disengaged employees make 100 times more mistakes than other employees in financial services.

To that end, many firms have beefed up their employee communications, with social media being a major tool in that increase.

Telling the broader story

FS firms clearly realize that their bottom lines came back much quicker than their reputations, especially in the financial press. However, most studies and surveys show that among Millennial customers and employees, loyalty is harder to build and easier to lose. The ones that understand the proliferation of digital channels, and how to get their message out to potential customers, employees and the media, are the ones that will be most successful in fully rebuilding their reputations, which have never fully recovered from the crisis.

It’s not enough for financial services firms to have good earnings reports anymore. With so much increased competition from both fintechs and each other, they need to go a step further and show they’re willing to engage with and empower the Millennial audience that is starting to rule the world.

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Jackie Kolek is Partner and Managing Director at Peppercomm.