NEW YORK, NY (June 28, 2018) – A broad wave of consumer distrust buffeted the banking industry's reputation over the past year, bringing an end to a run of positive change in public perception, according to the annual American Banker / Reputation Institute Survey of Bank Reputations.
The study found that it is more important than ever for banks to demonstrate good citizenship and raise the visibility of their CEOs. The research shows that both tactics can have a measurable positive impact on overall reputation. These results come in an era of increasing consumer distrust of all corporations, worsened in the banking industry by scandals at large players like Wells Fargo.
“A majority of banks saw their reputations decline, but new research for the first time shows perceptions can be improved,” said Bonnie McGeer, executive editor of American Banker. “If customers are familiar with the bank’s CEO, their perception of that bank’s reputation rises by six points on a scale of 100 – enough to boost its reputation from ‘strong’ to ‘excellent.’ Among noncustomers, familiarity with the CEO provides a 7.7-point boost.“
"There has been a global erosion of trust around corporations, not even specific to banking, but corporations in general," said Bradley Hecht, a senior managing director with the Reputation Institute. "The trust level of banks has continued to drop relative to what it was before, to the point that less than half of customers and just a quarter of noncustomers give banks the benefit of the doubt in a crisis situation."
The annual Survey of Bank Reputations measures U.S. consumers’ perceptions of 40 of the largest banks in the country. The scores, which are reported on a scale of 1 to 100, are derived from an online survey fielded by the Reputation Institute in the spring of 2018. Survey participants, who must be familiar with a particular bank to offer opinions on it, are asked how well that bank delivers in seven key categories including: products and services, performance, leadership, innovation, workplace, citizenship and governance.
This year, for the first time ever, perceptions of a bank's good citizenship became one of the top three drivers of overall reputation among both customers and noncustomers. The other two most influential categories for both groups were products and services, and governance, which is a measure of a bank’s culture. The governance score is based on perceptions of transparency and fairness.
For the first time, the Reputation Institute asked survey participants about a variety of risk factors to see how these would impact their perception of banks. Data breaches and system failures that temporarily restrict access to funds did not cause as much damage as issues where the bank is perceived to violate trust in a relationship, Hecht said. Mistreating employees, whether by not paying women as much as men or firing whistle-blowers, had the largest negative impact on consumers’ perceptions of reputation. According to Hecht "They care more about how you treat people than whether there is a data breach, because frankly, there's a breach every day and people tune it out for the most part."
USAA Bank earned the top marks in reputation among both customers (87.0) and noncustomers (73.8). The San Antonio-based bank has typically been at or near the top of both rankings in recent years.
The five other banks that got an “excellent” score (above 80) among their respective customers were:
- BMO Harris
- BOK Financial
That number is well below the 22 “excellent” banks reported last year.
Among noncustomers, Cullen/Frost was the only bank besides USAA to achieve a “strong” score (above 70). In contrast, 12 banks had “strong” scores last year. Frost managed to stay high in the ranking by achieving the industry-leading score from noncustomers in the citizenship category, as well as in the workplace category.
Frost’s approach was profiled in an American Banker feature story, “Frost’s formula for sustained success: People before profits.” The bank’s philosophy is guided by a manual it calls the “blue book,” said Phil Green, the chairman and CEO of the $31.5 billion-asset, San Antonio-based bank. The blue book details how employees are expected to treat each other and customers, and outlines the bank’s commitment to the communities it serves. "Our culture is our value proposition," Green said. "We have to make sure, as best we can, that we are doing the things that are documented in that book."
Full results of the survey and an overview of the trends are available at American Banker and in the July issue of American Banker Magazine.
Additional information is available at https://www.reputationinstitute.com.
About American Banker
American Banker, a SourceMedia brand, is the essential resource for senior executives in banking and financial services, keeping its users updated on vital developments and focusing sharply on their most important concerns. Financial industry professionals turn to American Banker to stay maximally informed and engage with an authoritative community of analysts, practitioners and innovators through opinion content, research reports, social media, and live events. American Banker Magazine is a monthly print publication of American Banker, focusing on the ideas, the people, and the companies that are changing the way bankers do business.
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About Reputation Institute
Reputation Institute (RI) is the world’s leading consulting and advisory firm for reputation. RI enables many of the world’s leading companies to make more confident business decisions that build and protect reputation capital, analyze risk and sustainability topics, and drive competitive advantage. RI’s most prominent management tool is the RepTrak® model for analyzing the reputations of companies and institutions — best known via the Global RepTrak® 100, the world’s largest and most comprehensive study of corporate reputations, as well as Country RepTrak® and City RepTrak® studies that look at reputation across organizations within a given geography.