How regional banks edged out larger rivals in reputation rankings
Perceptions of how banks responded to the pandemic is a major factor in shaping public opinion of the industry this year.
The results of the annual American Banker/RepTrak Survey of Bank Reputationsunderscore how important communicating is in a crisis — and making sure customers and noncustomers notice.
It helped earn some banks double-digit reputation gains.
The reputation scores banks received from survey respondents who recalled some communication from the bank or knew about COVID-related actions it had taken were as much as 24.5 points higher on the scale of 1 to 100, compared with the scores received from those who lacked awareness.
That 24.5 point difference happened specifically with noncustomers who were scoring large banks. Those who were familiar with a bank’s communications or actions gave overall reputation scores for that bank averaging 82.6 — which is considered “excellent.” That high a rating is rare among noncustomers, and particularly so for large banks.
By comparison, the overall reputation scores for large banks were “weak” among noncustomers who were familiar with the bank itself, but did not report knowing about any COVID-related communications or actions by that bank. Those scores averaged 58.
The survey, conducted in May, also turned up some interesting differences based on the framing of the questions.
Opinions about how banks responded to the crisis overall were considerably less favorable than opinions about their particular actions — such as giving employees the flexibility to work from home, showing support for health care professionals or donating to organizations helping to deal with the crisis.
“That’s why we’re saying the rational assessment is far more positive than the overall emotional one,” said Sven Klingemann, the director of research for RepTrak, which conducts the annual reputation survey for American Banker. (RepTrak is the former Reputation Institute; the company rebranded itself earlier this year.)
Given how strong the payoff is, banks of all types could benefit from generating more awareness of the specific actions they are taking.
For large banks, only 22% of customers and 5% of noncustomers said they were aware of any COVID-related messages or actions, the survey found.
For nontraditional banks, a category that includes online-only players like Ally Financial and Discover Financial Services, it was 17% of customers and 9% of noncustomers.
Regional banks achieved the best communications breakthrough, with close to half of all customers (44%) saying they knew of some messages or actions. So did 16% of the noncustomers.
The boost to reputation scores that awareness created among customers ranged from an average of 16.4 points for the large banks to 20.9 points for the nontraditional banks.
“The key takeaway here is overall banks are actually getting pretty good grades on how they have responded specifically to things surrounding the COVID-19 crisis,” Klingemann said.
Wells Fargo is an example.
Though its overall reputation score is still recovering from the massive hit it took in the wake of the phony-accounts scandal, Wells edged out the other large banks specifically on how consumers scored its response to the pandemic.
To help make sure its messages got noticed, Mary Mack, Wells Fargo’s chief executive of consumer and small-business banking, said it communicated with customers across multiple channels — proactively and frequently.
A message about the availability of loan forbearance appeared prominently on the mobile banking app and website for all users. “We made it front and center on your mobile app to ask you if you needed help and then tried to make it as frictionless as possible to get help,” Mack said.
A new strategy the bank hadn’t used before involved reaching out to branch visitors and letting them know about digital alternatives for doing the transaction they had completed, if one was available. It was framed as an option to keep them safer.
“We looked at transactions on a daily basis to see the customers that came into our branch and then we communicated back to a number of those customers and said, ‘Look, it was great to see you in the branch yesterday, and we're always here to help, but did you know that you could have done that transaction online? If you would like for us to walk you through how to do that, we’re happy to,’ ” Mack said.
Though the bank was already educating customers about digital processes before the pandemic, this particular strategy was something it had not done previously.
“The opportunity to pull up information from yesterday's transactions in almost real time to help you see how you can do that at home was new for us, particularly at that kind of scale,” Mack said.
Starting in March, Wells Fargo fully closed 27% of its branches. The rest remained open in "one of four safe formats,” ranging from fully open with social distancing, mask guidelines and protective barriers in place to keeping drive-up windows open but allowing branch visits by appointment only. “A number of customers who are contacting us on our phone lines want to go into a branch to meet with somebody, so we help them with where they can go and how to set those appointments up online,” Mack said.
To help with financial relief, Wells increased mobile deposit and ATM limits and communicated broadly with customers about it.
It also cashed government stimulus checks for customers and noncustomers, with no fee and immediate availability for those deposits, Mack said.
On the community-development side, Wells announced a program, dubbed Open for Business, that will donate all of its proceeds from the Paycheck Protection Program — approximately $400 million in processing fees, according to the bank's website — to support small businesses impacted by the pandemic, with a specific focus on Black-owned businesses.
“External data would tell you that Black-owned businesses are failing at twice the rate of the overall small-business population,” Mack said. “So how can we help? What role can we play in recovery? That’s a very intentional part of the dialogue as we think about our customers, our employees, what they need from us, what that conversation looks like.”