While reputation management has been embraced by most business organisations, for many financial services institutions the need now is much deeper. They are faced with repairing, or rebuilding, reputations that have been completely shattered by disclosures at the Royal Commission.
As we’ve pointed out before, it’s not going to be easy to rebuild trust following revelations that institutions used improper methods to boost income at the expense of clients.
Rebuilding reputation and trust can be done but not overnight, and any institution hoping to take the fast lane is likely to extend the period of pain.
Nevertheless, organisations need to be proactive in their approach as soon as they can – especially in building trust. If trust is regained, improved reputation will follow.
However, if any other negative issues come to light during the period of rebuilding trust, the clock will start again.
The basics of issues and crisis management communications cannot be ignored – no coverup; no trying to understate problems; keeping control of communications (be the first to say); and apologise, apologise, apologise.
With financial institutions’ charging of inappropriate fees and failure to provide appropriate disclosure highlighted at the Royal Commission hearings, honesty in communication is going to be a key element in rebuilding reputation and trust.
One problem is going to be that the ongoing media spotlight is likely to take a cynical look at any unsubstantiated claims of new and better approaches.
Another is the role of social media, where any wrong step is likely to find many critics, a wide audience, and slow-down the process of rehabilitation.
While rebuilding a shattered reputation has always been a difficult proposition, social media now makes it even more difficult.
It won’t help financial institutions if dissatisfied customers, disappointed shareholders, those who just don’t like banks, and the generally disenchanted, air their views on social media, even if they have no facts to support their opinions.
With the trashing of the reputation of many once respected financial institutions, communications from them will be received with a high degree of distrust for some time.
As part of the cultural change and reform process needed, two practices they need to adopt enthusiastically, in addition to honesty, are transparency and openness – and not just some highly sanitised version of the truth.
Self-protection, self-interest, and “what can we get away with” seems to have dominated client relations, and such perceptions need to be changed by better practices and service standards, proof of the value being added, and transparency about the relationship.
Product Disclosure Statements are a good case in point. Everyone, including the financial institutions themselves, agree that they are not very helpful and clearly not transparent, even though somewhere in their contents they disclose everything they should.
How many PDFs have been written by professional communicators rather than lawyers? Not many, I’m sure.
How many have been written to bury negative information about a product and to confuse clients intentionally or unintentionally? Far too many I suspect.
Yet did they have to be this way? Couldn’t they have developed as a useful, clearly explained, helpful, guide to clients?
In the future, financial services organisations will need to rethink many of their practices, and the way they communicate will be high on the list.