In a sector that has far more good actors than bad, Wall Street still suffers a deep chasm in trust almost universally in developed markets. This is reinforced every day with news of lawsuits and fines that attempt to right the course.
When it comes to trust, financial services continues to rank at the bottom of all industries (48 percent) and only slightly behind business in general (49 percent), according to our 2014 Trust Barometer, which measures public trust in business and government. The only thing that fared worse than financial services was government, which came in at 44 percent. (Technology and automotive were the most trusted.)
The good news for the financial-services industry is that trust is improving. From around the world, we see an outcry for greater regulation in financial services from 2009 to 2014, but that won't be enough. Companies need to take matters into their own hands.
Here are five tips for improving trust:
1. Radical transparency
Companies must take swift and transparent actions to explain the "what" behind their actions, but also the "how" and the "why" if they hope to bring their constituents along with them to the future of financial services. Customers are no longer satisfied with being told what's happening with their money and investments. Today's self-educating public wants to understand reasoning and operational aspects behind a company's activity so they can make smarter decisions with their money.
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2. Integrity and engagement
As we see near-stagnation in Trust Barometer scores from 2011 (when we began looking at the financial sector as a separate entity) and 2014, we are optimistic to see improvement as more engagement drives a deeper relationship between the institutions and the communities they serve. Where Operations and Corporate Social Responsibility (CSR) once led as trust builders, they are now considered table stakes. Engagement and integrity - in some ways harder to achieve - are the keys for repairing the customer relationship. Eighty-six percent of survey respondents believe a company can take specific actions that both increase profits and improve the economic and social conditions in the communities where it operates.
3, Credible chorus of voices
It's not enough to have the CEO as the singular voice of the company. Customers want to hear from multiple audiences that they find credible. The Trust Barometer findings show the most credible spokespeople to be academics (67 percent), technical experts (66 percent), a "person like me" (62 percent), financial or industry analyst (53 percent), a non-profit or non-government organization (52 percent), and CEO (43 percent). Interestingly, the CEO as a credible voice remains as strong as it did in last year's Trust data, indicating openness to audience listening and actively participating in the dialogue despite a negative news year for the industry. The key to making this an advantage is to ensure that all these voices understand and are reinforcing the true mission and purpose of the company. This occurs with robust planning, C-suite leadership and consistent communications.
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4. The surround-sound effect
The Trust Barometer data tell us that company messages need repeating. Sixty-four percent of respondents need to hear company information three to five times to find these messages credible and believable. This means that the positioning must be conveyed through multiple voices, be repeated several times and delivered in many content forms. Fortunately, we live in an era where we have more communications channels than ever. For the first time, the Trust Barometer data showed that online search is now considered as credible a source as traditional media, both at 65 percent. The key is finding the right channels appropriate to the specific audience desired and then give them to opportunity to get to know the company close up and frequently.
5. CEO as chief engagement officer
It all starts with listening. Following the conversation among key constituents will ensure that the company "gets it." Understanding the issues that matter greatest, means most will allow the CEO - as chief engagement officer - to engage on the issues that will engender trust most deeply and sincerely. Rather than pushing company messages out, strive to become part of the dialogue in unexpected ways and places. Companies should capture the attention of their audiences and inspire creativity in the industry.
Technology companies have proven to be most effective at this, and that's why they were rewarded with the highest Trust Barometer scores (79 percent). For financial services, tremendous opportunity still exists to gain traction on trust with consistent and meaningful engagement, starting from the top.
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- By Deidre H. Campbell
Deidre H. Campbell is executive vice president at public-relations firm Edelman, and the lead in the global financial-services sector. Follow her on Twitter @DeidreHCampbell.