The ten-year anniversary of the financial crisis should be the perfect reminder to the financial services sector that it needs to focus on its authenticity. The sector is still dealing with negative perceptions from the crash, which illustrates perfectly how falling short of the public’s expectations – in this case through mass-wrongdoing and negligence – can lead to sustained bad will. To truly rebuild its reputation, the sector must close the authenticity gap between the way society expects it to behave, and the way that it does.
Simply paying lip service to authenticity through openness won’t rebuild the sector’s reputation, either. Growing public expectations for greater transparency can make companies in the financial services sector panic and think the answer to their reputation challenges is releasing data. Unfortunately this doesn’t make a company more authentic; a company becomes authentic by addressing its inauthenticity.
Our ‘Authenticity Gap’ is a tool that aims to unearth that. Most PR and communication industry surveys only look at consumers’ experience of a brand or a sector, typically trust. This report measures both expectation as well as experience. This is what makes it, and our findings, unique.
Underpinning and informing our research is the ‘Nine Drivers of Reputation’, divided into management behaviours, customer benefits and society outcomes, validated by the likes of Columbia University and McKinsey. These ‘drivers’ have been proven to be the factors that can build, grow, and damage reputations. An improved reputation leads to a number of tangible outcomes; including greater customer loyalty, increase of between 3% and 7.5% in annual revenues and a 12x faster increase in share price.
Why is it important?
By examining the difference between expectations of a company’s behaviour against the nine drivers of reputation, and the experience of that company, we see the difference between how they expect a company to behave, and how they actually feel a company has behaved based on what they have seen, heard or felt to be true.
This allows us to see where companies are exceeding or differentiating, meeting or failing expectations. The ‘Authenticity Gap’ is where they fail expectations, and closing that gap enables a business or organisation to improve their authenticity, and ultimately their reputation.
But it’s not just your company’s reputation you need to worry about though. Your industry and peer group’s expectations define opinion. By leading in one or two drivers you not only show leadership, but you help raise the bar.
What does it mean for financial services?
As a whole better value is considered the single most important expectation in the 2017, and this is especially true for financial services as a whole. For the banking and investing sectors, despite the growth of digital models, consumers still have enormously high expectations of ‘customer care’, far greater than expectations of innovation. But across the board, firms are falling far short; in fact banking has the largest gap of any industry studied.
This authenticity deficit is perfectly illustrated by the fact that while customer care often sits at the heart of consumer marketing campaigns, the Ombudsman continues to be inundated with complaints from dissatisfied customers.
Interestingly, when it comes to fintech, expectations of ‘Innovation’ are being met but both ‘Doing right’ and ‘Customer care’ have even wider authenticity gaps, showing fintech leaders need to place more attention on its users and have a clear articulation of its corporate purpose, beyond its disruptive new products or solutions. Improvements in these areas could well help new entrants grow to become market leaders, rather than just challengers.
We believe the findings in this report provides real insights into a company’s reputation, that can be used to help shape communication and marketing strategies, inform customer communications and guide areas of focus and investment.
I hope you enjoy reading
Please get in touch if you’d like to find out more.
Claudia Bate, Head of Financial Services and Fintech, FleishmanHillard Fishburn