Something has continued to nag me heavily over the past few years. This feeling comes when I see an industry I grew up in and revered consistently failing to do one thing: Banks have yet to apologize for their part in the financial turmoil that continues to affect the nation. These banks were not alone. They were part of a chain that included politicians, regulators, consumers, speculators and market makers who participated in this fiasco. I participated as well.
However, none of these parties can be expected to take the position the largest banks and some of its smaller ones should take publicly. Instead of apologizing, these financial institutions are pouring millions of dollars of shareholder monies and bank revenue into advertising campaigns that were, in many cases, designed in the 1980s. Neither customers nor shareholders are being well served by this strategy.
I remember the 1980 campaigns well as a mergers and acquisitions veteran. They were designed to tell new markets that the acquiring banks were the good guys. We would invest in these advertising campaigns to ensure new markets knew we would have a positive impact on their communities. Despite some internal concerns about being too boastful, these ad campaigns worked well for almost two decades. Of course, the proverbial buggy whip was a viable option for its time.
Today, these types of marketing campaigns represent millions of dollars of wasted effort. Consumers don't buy their messages anymore because, frankly, too many have become distrustful of an industry where trust is the most important commodity. The banking industry needs to regain this lost trust but it won't happen through optimistic future-focused messaging that ignores the real pain in our country and the role banks played in it. It certainly will not build trust to keep messaging how great a corporate citizen you are when you have not yet said "I am sorry."
Stepping back we can examine a specific example where a bank regained trust by doing the right thing and utilizing smart public relations work. A few months after the data breach and disastrous response by ChoicePoint, a large data aggregator, I led a response to a potentially larger financial services data breach for the bank I worked for. This data involved personal information for over a million customers, including government officials, legislators and soldiers arriving on the ground in Iraq. We responded by providing rapid notification, prepared staff and free identity theft protection products. But, first and foremost, we apologized. The data was ultimately determined never to have been breached. Regardless, individual customers were protected and client satisfaction with the bank's response allowed it to retain a large government client.
In the old days, marketers and public relations executives could just repeat messages over and over until people believed them. Those days are gone. I don't have to go to a newspaper basement and search through archives to learn how a financial institution responded to a particular scandal or public relations nightmare. I can Google its words and actions. I am a more informed and knowledgeable consumer.
And what I want, first and foremost, when I learn of a scandal or misstep, is an apology. Without an apology, I cannot gain confidence that you will do what you are promising in the future. Of course, demonstration is always more powerful than words. So be sure to take clear and actionable steps in addition to the apology. Spell them out, then make good on your commitment.
Most executives have been loath to do this. We have not witnessed one executive apologizing for the Libor scandal and yet it appears that numerous governing bodies and banks clear knew something was askew.
No marketing executive that I am aware of has championed the path of apology. Following the current financial crisis, it took some institutions years to even consider changing their brand positioning. Talk about tone deaf. Even if we are shackled by litigation, we need to be creative enough to find other ways to say "I am sorry" versus the "We're smart, you're smart … Do business with us" taglines.
As a career banker, I helped build this current environment. As a public relations professional, I know there is only one way out of it. Fess up. Apologize. For my part, I am sorry for any contribution I made to these times. Now how do we move forward? That's the way any relationship begins to rebuild trust when it is lost. Stop wasting shareholder money and increasing fees to pay for advertising and public relations strategies that will not work. Is it too late? I don't think it is ever too late to find a way to sincerely say "I am sorry."
Mike Clement is managing director of Strait Insights, a public relations and communications company located in Charlotte, N.C.