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Written by Cyndie Martini
on November 30, 2018

It has not been a good year for the banking industry. Bank reputations have fallen for the first time in the past five years, and it is widespread. Not only is this poor opinion of banks reaching across the globe, but it has also moved into a widespread distrust of corporations in general.

Why Now?

There are several multi-faceted reasons for this surge in distrust for the banking industry. Some of these, at least on a national level, are part of larger generational trends. With older, more financially conservative members passing away, the market is being replaced by younger members with debts from student loans and credit card spending, children to care for, and most of their interactions with the banks being fees and repayments, interest-paying rather than interest building. Couple that with a growing distrust for institutions, and you have a recipe for bad feelings for big banking businesses.

Internal Factors

What are the major factors that determine bank reputations? Traditionally, banks have operated under the promise that their status is based upon their ability to protect the funds and investments of their customers. What they are learning is that the vast majority of the top factors of their reputation has to do with the treatment of their own employees rather than their customers. For instance, banks who failed to pay female employees the same rate as males received a 20-point decline in reputation scores. The other significant factors involve similar issues of fairness towards employees, including a negative reputation when punishing whistleblowers for inappropriate conduct perpetrated by management.

What is Helping Their Reputation?

Currently, there is a significant rise in the opinions among customers who know the CEO of the company. That can be helpful for CEOs who maintain public appearances. Unfortunately, that has not traditionally been a primary concern for banks when choosing CEOs. This seems to appear across the finance industry, including credit unions, and across corporations in general.

Obviously, the CEO needs to have a positive reputation among people for the bank to enjoy those reputation points. What the public seems to be looking for is similar to the traits that coincide with the fair treatment of employees that so dominates the reputation factor of these institutions. These CEOs with a visible public appearance around social concerns score better than those who hide behind good interest percentages for investors. Unfortunately, the statistics show that only 17% of bank customers know their bank’s CEO, and only 7% of non-customers know any bank CEOs. If banks want to leverage the public reputation of their CEOs, they have a lot of work to do.



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