Edelman’s brandshare findings shine a positive light on a financial services industry that has been reinventing itself after an unprecedented crisis rocked world markets. In the aftermath, consumer financial institutions had to rethink how they conducted business, and consumers are saying that they notice and appreciate the effort.
Edelman’s brandshare research examined consumer needs and perceptions through the following lens:
- Emotional – how brands make people feel
- Rational – the transactional reason to believe
- Societal – contributions to communities and the world at large
In the study, which encompassed 15,000 people across 12 countries, the financial industry outpaced others in two areas: responsiveness (e.g., “responds quickly to concerns/complaints”), and conviction (e.g., has a clear mission/purpose). However, there were gaps in what consumers deem important when compared to their perception of financial brands’ performance.
68% of consumers say it’s important for financial institutions to communicate openly and transparently about their products, but only 17% feel that happens. Similarly, 52% of consumers would like to have a voice and participate in the development of new products, but only 18% say the financial industry does this adequately today.
While the financial sector has taken steps to repair its reputation and rebuild relationships with consumers, this research suggests there is still room for improvement. The question is, how do we use these insights to close the gaps and keep the positive momentum going forward for financial services companies?
87% of people say they want meaningful interactions with brands. This is where social media comes in. Consumers don’t connect with businesses through social media to just buy their products; they connect to share their vision and passions. Social media, therefore, is a medium for businesses to personally connect with consumers on an emotional level. This is more difficult than is sounds for financial services companies that are inherently risk averse, functioning within the most conservative frameworks to communicate.
You can’t use compliance and regulations as an excuse to avoid social media anymore. Both FINRA and the OCC have provided clear and concise guidance on the use of social media, as has the FFIEC. The guidance mirrors that of the offline world: maintain records, and follow the applicable company’s social media policy.
68% of people think brands should communicate openly and transparently about products, up from 54% the year before. So what should financial institutions do? For starters, they should communicate proactively on security protections. For consumers, the key concern is “how secure is my financial information?” Fears range from point-of-sale theft to hacking. Financial services companies need to continue working with with government agencies, third parties — even competitors — to combat threats. Getting hacked is no longer a matter of “if,” but “when.”
Consumers want and deserve to know about how their financial information is being protected and what their rights are. This is an opportunity to advance the conversation with open communications that clarify policies set up to protect consumers, and to explain the steps/outcomes that should be expected if personal financial data has been compromised. This communication can be easily placed websites and in branch locations.
80% of consumers say they believe brands should have a clear purpose. In other words, meeting societal needs drive business value. Societal expectations now extend beyond traditional definitions of “corporate responsibility” and sustainability. Using resources to drive change in the world and taking a stance on issues people care about will contribute to meeting consumers’ societal needs.
Why not invite people to be part of the development and refinement process for products and services? This will help eliminate the mystery of the industry’s “fine print” all together, tapping into what consumers really care about and providing the opportunity to engage on their media of choice.
Meeting consumers’ emotional, rational and societal needs has a compound impact on a consumer’s buying decision. If you act with a mission and purpose at your core, provide multiple ways for people to ask questions and give opinions and respond quickly to concerns and complaints, your financial institutions will differentiate itself from the pack.