Want to End Banking's Bad Rep? Charge a Fair Price for Better Products

Is the financial industry's reputation going from bad to worse or only from worse to bad? According to the recently released American Banker’s 2013 Survey of Bank Reputations, the industry "has a poorer reputation than any other major sector of the U.S. economy." But behind this dark cloud, there's a ray of better, bad news. The industry "still seems to be held in higher esteem than Congress."

If these survey results aren't enough to make bankers reach for antacid tablets, they'll most definitely need some palliative care after reading this article in The (satirical) Onion: "Claiming that enough time had surely passed since they last caused a global economic meltdown, top executives from the U.S. financial sector told reporters ... that they are just about ready to completely destroy the world again."

Fortunately, not everyone is affected by the sour opinion of banking. Various banks, in both large and community-size categories, are favorably perceived in the American Banker survey. But despite this hint of good news, overall perception of the industry remains at rock bottom. It’s never good when an industry is the subject of media satire, any way you slice it.

Let's face it, achieving positive perception of banking has always been challenging because of the nature of our business. We're one of the few industries that regularly deny consumers access to our products and services. Fee issues haven't helped industry image, which remains underwater years after the global economic crisis and Great Recession.

Can our industry somehow battle its way back to the surface, fill its lungs with crisp, fresh air and move forward? We can, actually, by building enterprise and delivering value. I know ... I know. This suggestion sounds like motherhood and apple pie, but bear with me.

Recently in American Banker, I suggested that "the megabanks' mega-image crisis might have been averted had financial firms paid closer attention to a key fundamental of banking: spurring the development and growth of enterprise, the goods and services produced by people in business and all walks of life."

Perhaps more than any major sector of the U.S. economy, the financial industry has what it takes to build enterprise and deliver value. We’re the industry that can allocate to businesses and individuals the resources needed to produce goods and services. Our industry's financial resources and expertise can be deployed to build commerce and infrastructure. Other major sectors of the economy do not serve the broad range of needs that we serve.

But, in order to develop such a positive narrative, it may be necessary to rethink and rebalance our industry's business model. One suggestion is to bring revenue streams into better harmony with support for commerce and enterprise. It may be the time to rethink fees, for example. Without question, banks, like all businesses, need to price products and services. We can't give everything away for free, but, unfortunately, there's a tendency to go overboard, not just in our business, but across industry lines. Right now, airlines seem to be the poster industry that is overzealously imposing irritating fees on customers. Mobile phone and cable service providers are in the queue, too. Have you checked your bills lately? These businesses need to develop revenue streams, but there must be better options.

For example, gearing pricing and fees to tangible improvements in goods and services or to new services might be a viable option, since consumers tend to perceive added value in positive terms. Companies that create goods or enhance existing services are seen to be innovative and responsive to consumer needs. Conversely, businesses and industries that impose fees without adding value often wind up paying a reputational price.

Various industries, including the financial industry, might consider refocusing on fundamentals to reverse sagging opinion of business and institutions.

Harvey Radin, an independent public relations consultant, was a senior vice president at Bank of America. He also served as head of western region corporate communications and media relations at Bank of America and was a PR consultant for Greater Bay Bancorp and Wachovia Corp.