How Financial Services Companies Can Rebuild Their Reputations
May 28, 2010
| MoneyRates.com Senior Financial Analyst, CFA
Financial services firms took seven of the bottom ten slots in Harris Interactive's 2010 annual survey of the most and least respected companies in America. As an industry, financial services was ranked second from the bottom in reputation, beating only the tobacco industry.
The financial crisis may be over, but clearly financial services firms have some work to do to rebuild their reputations. MoneyRates.com offers three suggestions for how banks can build a more positive image:
- Lead, don't follow, the trend toward higher bank rates. In every category--CD rates, savings account rates, and money market rates--bank rates have spent a year now at extreme lows. Once bank rates begin to rise, banks will respond in different ways. As banks consider whether and how much to raise bank rates, they will face a choice between short-term profitability and long-term reputation. Those that cling to offering low rates for as long as they can will alienate customers, whereas those that lead the charge toward higher bank rates can garner both the positive attention and the increased deposits that the industry needs.
- Improve customer service. From time-wasting phone menus to hard-to-navigate websites, banks have far to go in improving the customer's experience. Most customers generally do not need personal service very often, but when they do, the experience can have a profound impact on their attitude toward the bank.
- Simplify disclosure documents. Bank disclosure documents are often so obtuse that customers get the impression the bank is putting something over on them--and indeed many customers are later surprised by a condition that was supposedly disclosed to them. If simplifying disclosures means simplifying the underlying terms and policies, that would also go a long way toward improving the image of banks.
In this age of Internet communication, reputations can change more quickly than ever. For banks and other financial institutions that make the right moves, this ability for rapid transformation can be used to their advantage.
