The long but necessary slog back to banking trust

Forget about a slump in profits and falling share prices – the biggest challenge Australia’s major banks and financial services companies will face soon is the one to win back the public’s trust.

Banking Royal Commission head Kenneth Hayne’s interim report made crystal clear the damage to reputation wrought on Australia’s financial services sector when he bluntly talked of “dishonesty” and “greed” as the overarching themes to emerge from his commission’s hearings:

“The banks have gone to the edge of what is permitted, and too often beyond that limit, in pursuit of profit. And they have gone beyond the limit because they can; and because they profit from the misconduct that is described in this report.

“Risk to reputation was ignored. Discovery of misconduct was ‘managed’ by words of apology and promises to do better. But little more was done than utter the apology and make the promise.”

So how does the financial services sector bounce back from this verbal shellacking?

How do you, as an executive in the sector, approach the task of rebuilding your organisation’s trust with the community?

The simple answer is that there no simple answer. There is no “bouncing” back, just a long and arduous slog to drag your way up from the bottom.

But it’s a journey our banks and financial services companies must embark on if they hope to regain even a semblance of the public regard and trust they once enjoyed. Remember, these are places most of us became customers of because we were looking for somewhere safe to keep our money and protect our investments.

The road back towards trust starts with identifying your stakeholders and communicating directly with them – and in this case those key stakeholders are everyday customers, not shareholders (even if those two groups aren’t necessarily mutually exclusive).

The communication must be something more meaningful than “we’re putting your rates up” (although customers clearly need to know that) and, after everything identified in the Hayne report, “here’s a credit card offer just for you” isn’t going to cut the mustard either.

What we all want is banks that don’t just talk the talk but also walk it. Cutting ties with staff involved in past breaches is one step but there needs to be much more.

A really easy starting point is to offer a helpline that actually helps people; that doesn’t operate 9-5 on eastern time (a challenge at the best of times, totally useless on this side of the country during daylight saving) and on which you won’t waste hours on hold.

That might cost a little bit more to operate. But if there’s one thing Hayne’s interim report made abundantly clear it is that profit can no longer be the only motivating factor. If someone calls for help and the line is closed, you’ve already failed the first test.

It was interesting to note that when in early September Westpac, ANZ and Commonwealth Bank increased their interest rates – citing higher funding costs – NAB took a different tack. The reason for that was, chief executive Andrew Thorburn told the Australian Financial Review, to try to restore trust for existing customers who were not enjoying the discounts on offer to newcomers:

“It’s probably not a long-term economic model to have aggressive ‘front book’ discounting when your existing clients are not getting the same sort of deal.”

In some ways, NAB seized on an easy way to stand out positively among its peers and it’s yet to be seen whether the bank can hold the line in the longer term. But in an environment where only 34 per cent of customers believe the financial services industry can be trusted (according to Deloitte research released in July), it reads as a small step towards an authentic wish to change.

Re-establishing a genuine dialogue with bank customers cannot be a one-size-fits-all approach.

My parents’ generation probably favours snail mail. I might like to get an email. My kids might eventually end up talking to their bank through social media.

It also needs to happen at every level of the community.

It’s not (only) about sponsoring the West Coast Eagles, it is about sponsoring the Redcliffe Junior Football Club Eagles … and the Hawks of Halls Creek and Augusta-Margaret River, the Harvey Bulls, the Warwick Greenwood Knights, the ECU Jets and the Secret Harbour Dockers.

Even then it’s not just about handing them a cheque. If a bank is going to spend money sponsoring a club, then it should also take the time to send a representative along to the fairest-and-best dinner/jumper presentation/pie night. Someone who can connect at the grassroots level and explain why (and how) the bank cares for the community and wants to be involved with the community.

Just like the mining industry needs workers to fly the flag at community level for their companies, banks can get a kick-along to restore trust through everyday employee advocacy.

As a long-time journalist, I know what it’s like to work in a field that people do not always hold in high regard. It wasn’t always easy, especially in small communities, to go to a barbecue and announce that I worked as a journalist. But I did it – because deep down I was proud of what I did and what it stood for. It meant something to me.

I can only imagine how a financial planner at a bank might feel right now, when they get the “so, what do you do for a crust?” question around the backyard BBQ or at school pick-up.

The sooner you can get them back to proclaim with pride “I work for [insert back name]”, the sooner the real process of rebuilding trust begins.

With more than 20 years’ experience in finance journalism and strategic communications, Peter Klinger is an expert on media strategy, crisis communications, and media training and engagement. If you need help getting your message across to stakeholders, contact Peter.