Yet again the public finds another opportunity to lose faith in our banking system. The years have not been kind to bankers with the pain of recession continuing to cause fallout both institutionally and across the retail sector. But whatever we might think privately about the system, it is impossible to deny that the banks remain the backbone of our financial system and, like it or not, the government desperately needs to provide robust support.
Rather than taking cheap shots for political gain, politicians need to question why, after so long since the near-collapse of Northern Rock, some banks are listening whilst others gaily proceed as though nothing has changed. Is it that those banks benefitting from a level of state-ownership have had to become more mindful of their reputation? There’s nothing like an interested stakeholder to sharpen the focus – and Lloyds, RBS and Northern Rock have every taxpayer as an interested stakeholder – and remember the 24-hour media pressure on their brands.
The handling of the recent technology hiccup at RBS would suggest that this is very much the case. Clearly a lot of time and effort has gone in to ensuring that the bank is seen to be thinking about RBS and NatWest customers first and foremost; the most appropriate people are speaking; they are saying the right thing and are in the right place at the right time. At least the communications crisis programme has kicked in irrespective of the infrastructure and operational issues they face. If you are not able to win both battles immediately, you need to make sure that you focus on the one that will offer the best protection for your brand and reputation.
Walk on Barclays, which has clearly been asleep these last few years and appears to be blindly stumbling in to every possible road crash out there. So the questions: how can such a great British institution have got it so wrong? At what stage did it think that having a strong crisis response programme for the company would not be needed? With the FSA investigation on-going, how has its management failed to recognise and pre-empt the carnage and fall out it would create? Why was there no softly-softly step-by-step communications strategy in place, explaining the bank’s position on price fixing and making sure this was positioned as an industry-wide issue and one that Barclays’ would stamp out? Why has there not been a suitable response across social media to this? Why do they think it is appropriate to be operating in a vacuum and thereby avoid being able to press the panic button?
At best it is either a serious lack of professional judgement or at worst there remains arrogance and the belief that ‘the general public are not intelligent enough to understand how the markets, let alone Libor rates, work’.??Let this be a lesson to all those firms out there - you can run but you certainly can no longer hide. Engage constructively, with humility, and offer solutions. And finally, ask whether your actions and responses pass the ‘kitchen table test’. Are they fair and reasonable to the person reading, watching or listening to the news at home? ??A sobering thought. Perhaps Barclays should have taken up the offer of Government funding. It would have at least put communications at the heart of the business, on the boardroom table and at the front of every manager’s mind.
I would not, for a second, recommend that every commercial decision should be based on how it will play out in the media – we have seen the damage that can cause to political parties. But if the banks can occasionally put themselves in their shareholders’ and customers’ shoes, they might see that some of their recent decisions on when to communicate and what to communicate do them no service whatsoever.
By Sophia Harrison - Director Financial and Professional Services, Grayling