WASHINGTON — The banking industry's image is about as awful as it's ever been. Polls prove it and popular culture reflects it. If you need convincing, just read the "comments" section below any mainstream newspaper story related to banking.

Barbara A. Rehm

"Reputation is one of the things that, unless we fix it, we will fail as an industry," says Steve Bartlett, who will retire in December after 13 years atop the Financial Services Roundtable. "Reputation, as the old Ford ad said, is Job 1."

But what needs to be done by whom, and at what cost?

Those questions are so daunting that many bank executives don't even bother to consider them. These folks figure the economy will eventually recover, Dodd-Frank's most onerous provisions will be tamed and the public will once again trust banks.

Don't kid yourself. Time alone will not heal this wound. And until the industry gets its act together, the government will keep drilling further into banking's operations.

"The industry will continue to be vulnerable — extremely vulnerable — to legislative and regulatory challenges until they deal with this issue," says Stan Collender, a partner and the national director of financial communications at Qorvis Communications in Washington. "There is still very little downside to attacking the financial services industry."

Rebuilding the industry's reputation is going to take a lot of work from a lot of people, but it is doable. The sooner bankers realize that, the better.

The plastics industry turned its image around by embracing recycling. Pharmaceuticals fought the idea that their products were too expensive by giving drugs away for free to people who couldn't afford them. The oil industry is inundating the country with ads to bolster its image and launched its "Vote 4 Energy" campaign to persuade Americans to back policies like expanded drilling. That the banking industry can change its image should be a given. What other industry provides valuable products and services that make people's lives better and more convenient. What other industry is more tied to its communities and customers?

But too many bankers are either in denial or on the defensive. They claim the crisis was someone else's fault and they shouldn't be blamed. And executives just sound arrogant when they repeat for the 20th time — my bank didn't need the government's Tarp money! The industry benefited from Tarp. Stop complaining.

A better approach would be to show gratitude, explain how Tarp has largely been repaid and pledge to use the industry's stronger capital base to expand lending.

Collender turned the idea into a great slogan: "You were there for us when we needed you, now we are here for you."

Restoring the industry's reputation will take years and it will require effort from both individual institutions and their national trade associations. Institutions must commit to convincing their customers that the bank is doing the right thing and the federal associations must back that up with national advertising and advocacy.

"As with any industry, wholesale reputation change requires both a buzz at the grassroots level, as well as a national campaign with a consistent message — so you're hearing it on TV at home, and from your neighbor sitting next to you in church," says Trish Wexler, a partner at VOX Global, a strategic communications firm in D.C.

The industry has more federal trade groups than it can use and few have given much effort to the industry's image. The closest thing to Wexler's idea is the Partnership for a Secure Financial Future, spearheaded by the Financial Services Roundtable with support by the Consumer Bankers Association, the Mortgage Bankers Association and the Financial Services Institute. (I'd never heard of institute either; it represents independent financial advisors.)

The Partnership is aimed mainly at influencing policymakers inside the Beltway, and it's a decent start. But it needs a broader focus, and the American Bankers Association and the Independent Community Bankers of America must join in if it has any hope of making a dent in the problem.

Stephanie O'Keefe, the ABA's executive vice president of communications, delicately explained why the group didn't join the partnership, saying its "resources and attention are focused slightly differently for our membership right now."

ICBA President and Chief Executive Cam Fine minced fewer words.

His members "don't say 'I am a banker,' " Fine explains. "They say 'I am a community banker,' and people's faces light up. They love us."

Maybe. But if you are a banker and "banking" has a bad reputation, that's still a problem.

Fine disagrees and has a point when he explains why the ICBA decided not to sign on to the Partnership. "Every time they try to mount on one of these rehabilitation campaigns … invariably they are in the middle of the campaign when" some big bank stumbles "and it's all shot out the window."

OK, so maybe the first track of this two-track strategy has to start with the banks themselves. Individual institutions, lots of them, must promise to do right by their customers and then deliver.

"We have to improve our image through good old-fashioned, traditional ways," Bartlett says. "We have to speak clearly, treat our customers fairly, communicate to regulators, tell our own story and do things right.

"Let's erase the word 'compliance' from our vocabulary and replace it with 'do it right.' " Every PR pro I interviewed stressed that actions trump words.

"It isn't about the words. It's about the actions," says Lida Citroen, who runs a boutique reputation management and branding company in Denver called LIDA360. "If you say you are about customer service and I have to push 500 buttons to get to a human being, I don't feel served."

Howard Headlee, president of the Utah Bankers Association, has a pretty brilliant observation: the issues most troubling to Americans play right into bankers' expertise.

"We should focus on what is on their minds and fortunately right now, those issues are right in our wheelhouse," Headlee wrote in a memo outlining his ideas for restoring the industry's image. "The people we are trying to influence right now are worried. They are worried about the value of their homes, making their house payment, losing their jobs, their kids and their kids' education and their kids' jobs. … They worry about losing their savings to complex financial frauds or identity thieves. Their worries are mainly financial, and that is a huge opportunity for us."

Headlee argues the industry ought to leverage its branch network to reach out and help people solve their financial problems.

"Over time, I am confident that we can convince the general public that we are part of the solution. That we are 'neighbors they trust.' That we understand what is troubling them and we are trying to be helpful," his memo states. "As soon as this happens they will become a political ally and we will stop this cycle of political abuse our industry is taking."

Collender agrees, and estimates a successful grassroots campaign will take two to five years.

"Banks have to get closer to their customers. They have to re-establish their local credentials. They have to decentralize and take the message about what they do and why they do it to local people," he says. "Banks don't need their CEO to be on 'Meet the Press.' They need the branch manager at the Rotary Club."

As for cost, no one wanted to take a stab at it, but Collender made a good point.

"It would be nowhere near what the decrease in reputation is costing the industry."

Citroen adds: "I think there are some really big, bold steps that need to happen. They are terrifying, but they are also exhilarating because employee morale, public perception, shareholder value, everything gets influenced when companies get really clear about what they can promise their customers."

So who wants to take the first step?

Barb Rehm is American Banker's editor at large. She welcomes feedback to her column at Barbara.Rehm@SourceMedia.com. Follow her on Twitter at @barbrehm.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.