Listening to the politicians you would think Congress found a cure for cancer as they announced…what exactly? They agreed to borrow more money and kick the budget can down the road four months. Nothing has been solved or put on a corrective course, but it did have an impact on the financial industry.
Distrust and Loss of Confidence
Consumers registered their lack of respect and distrust of political leaders, unfortunately there is a slopover of this growing distrust. Consumers are looking at every news story, sale and other information they see with a skeptical eye. In fact, when banks and investment firms are registering above-expected profits, Wall Street applauds; however, consumers have been taught to revile this news because they believe it came off their backs. The media agenda is sticking.
Also, when the government plays politics and predicts impending gloom and doom, consumers tend to lose confidence in the economy and hold on tighter to their spending dollars. After the last five years of constant economic threats being reported, consumers are developing new financial behaviors. Some out of necessity (college graduates carrying significant student debt while being underemployed) and some who are just fearful of what the future holds. In four months, the media will be posting prognostications of doom and gloom as Congress battles once again on budget stop gap measures.
During these jaded consumer times, how do financial institutions get the message out that loans are available and we are eager to lend? The trickle of trust. Following the Great Depression financial institutions focused on building consumer confidence in security. That’s what consumers questioned the most, and were most fearful of. Rebuilding the brand following consumer rejection is paramount to rebuilding the functionality of the industry. Following the Great Recession consumers lost trust in the banking industry.
Defaults, scandals, foreclosures and the loss of many organizations within the industry have been painted as an industry you can’t trust. Terms like predatory lending were thrown around enough to stick in the minds of consumers.
Rebranding – The Trickle of Trust
As with any situation, trust can be quickly lost. And it takes time to rebuild that trust. Try to gain trust too fast, and it appears disingenuous. Trust is rebuilt by the trickle effect. A constant singular message of being partners with consumers will bring back the trust in the industry.
When the institution makes sincere efforts to communicate, we are being their friend in financially difficult times. For instance, we care enough to advise and protect the consumer from getting into a financial bind they can’t get out of, and we can create a physical change such as pod-like dialogue branches that demonstrate a different approach to the consumer.
With an unwavering message of we want to earn your trust back, financial organizations can rebuild that relationship with consumers that is so critical to future success.
Russell J. White is president of Banking Agility in Charlotte, N.C.