Several recent studies and research papers have highlighted problems for communications professionals, including fake news, opinion vs truth, how to best use the internet and social media, and loss of trust.
These are issues that are particularly pertinent for financial services communicators.
For instance, a recent study from the RAND Corp in the USA looked at the erosion of truth in the public sphere. It defines “Truth Decay” as the diminishing role of facts and data in American public life, suggesting that there is a blurring of truth and fiction.
We believe it equally applies to Australian public life – for example, the debate about fossil fuels and climate change is a good case in point.
What is the truth and how are the “facts” quoted supported? Or are they only opinions? Or even worse, deceptions?
Points made about Truth Decay include the blurring of the line between opinion and fact and the declining trust in formerly respected sources of facts.
One reason put forward for the rise in accepting information without questioning its source or accuracy, is the influence of social media
Social media has certainly been a huge contributor to the rise of opinion over fact, and many people accept what they read online as absolute truth without any attempting to verify the facts or the source.
The blurring of the line between opinion and fact and a declining trust in what was considered reputable sources of information are particularly relevant in financial services where trust and reputation has taken a heavy battering.
For example, eighty-seven per cent of respondents to a Financial Standard poll either agreed or strongly agreed that the levels of consumer trust and satisfaction have worsened since the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services industry began.
This is hardly surprising, with the continuing disclosures of malpractice that are being aired at the Royal Commission, but evidently the problems of trust and reputation started way before this.
For the third consecutive year, banks and financial institutions have rated at the bottom of the Australian Ethics Index, and overall the Index has fallen six points since 2017 – from 41 to 35 – evidently dragged down by the poor perception of ethics in the banking sector.
The Index is derived from Governance Institute research across a range of sectors and industries. Banking, finance and insurance was reported to be the lowest category in the Index. Its net score has dropped from last year to record -15 and about 55% of respondents consider the sector unethical while only 28% view it as ethical.
While there is no easy or quick fix in repairing reputation and building trust once an organisation has been shown to be extremely untrustworthy, no matter how reputable it may have been before, it can be done.
It will take the individual organisations in financial services some time to restore confidence.
It is a case of the truism “time is a great healer”. We will discuss some of the issues and actions involved in influencing others and rebuilding reputation and trust in future weeks.