How The Financial Services Digital Marketer Can Help Overcome The 'Trust Deficit'
Wednesday, March 16, 2011
Pat Allen in For The Digital Marketer, Research
Have you heard about the results of the2011 Edelman Trust in U.S. Financial Services Survey in which Edelman found that investor trust in the U.S. financial services industry fell sharply last year? According to those surveyed, trust has fallen because “financial services companies have acted in a greedy manner" (57%) and “the industry itself has made the problems worse” (18%). Not good.
Multiple entities are included in the “financial services industry” umbrella: mutual fund companies, brokerage firms, investment banks, two types of commercial banks (large, national and community or regional), two types of insurance companies (life and property/casualty) and private equity firms. The survey also asked about “financial institutions in general.” The Long Road Back: 2011 Edelman Trust in U.S. Financial Services Survey
An 18-slide presentation on the survey results is embedded above (and the infographic at the end of this post provides another way of looking at the data). As you’ll see on Slide #4, mutual fund companies ranked second only to community or regional banks in consumers’ trust and above “financial institutions in general.” Then again, we’re all aiming to be trusted by more than 55% of investors. So, still not good.
What's Important And How's The Industry Doing?
I've spent the most time on Slide #9. It compares what investors consider important to a company’s reputation and how well the industry is performing on that factor.
A few datapoints:
Most important to a company's reputation, say 91% of those surveyed, is “honest communication.” This ranks an 8 or 9 on a 9-point scale (9 being “extremely important”). And how well does the industry do at communicating honestly? Just two-thirds of those surveyed said the industry deserves an 8 or 9 on a 9-point scale (9 being “extremely well).
84% rank “open and transparent business practices” as an 8 or a 9 in importance to a company's reputation. Only 63% said the industry earns an 8 or 9 on this measure.
The financial services Website? It’s explicitly mentioned twice on the list of what’s important (with “top leadership” in between the two mentions). A “Website with easy financial transactions” is an 8 or a 9 on the importance scale to 63% of investors. But, only 53% say the industry’s Websites make an 8 or 9 grade. While slightly more than half (51%) of investors say an “informative Website” is important to reputation, there’s a gap there, too. Only 43% give the industry’s performance an 8 or 9.
Is social networking important to a company's reputation? Only 5% say that it is and only 5% think the industry is performing at an 8 or 9 level.
All in all, the survey demonstrates that there’s a lot of trust-building and re-building to be done here.
It Takes A Digital Village To Break Bad Habits
What can digital marketers do about these findings? We encourage you to think beyond your own work domain. The contribution you can make goes beyond maintaining an informative Website that does its job in supporting transactions.
The leadership role for you to play starts at the top of the list—in the perceived honesty of your firm's communications and its openness and transparency.
In her excellent post on how financial services can “recover from the trust deficit,” Edelman’s Rebecca Neufeld identifies and elaborates on three basic tenets of social media that she says could be applied here:
Speak your audience’s language
Walk the walk
Be a face, not just a name
We agree. If a firm is truly committed to breaking bad habits and improving its openness, transparency and speed to communicating, it will require an enterprise-wide effort.
We believe that it’s incumbent on you, the digital marketer, to step up and help.
Your work requires you to see virtually all mass communications produced by your firm. Find the confidence to appeal the communications and communication practices that you know—probably better than the leaders or other marketers at your firm—that are out of step with the openness and transparency that you see every day online. One reason for the "trust deficit," we suspect, is that other industries are becoming open and financial services is suffering in comparison.
Obviously, you can't stop something that’s been planned, scoped, written, routed and approved to be published. It’s too late to intervene then, not to mention counterproductive.
Rather, it’s in the early, constructive participation in communications planning, the sharing of best practices, comparing/contrasting examples or even just formalized communications reviews where we believe that digital marketing leadership and teams can play an essential role in helping asset management firms tune the trustworthiness of who they are and what they say online.