You might be tempted to think that the pressure to communicate your financial institution’s strength, stability, soundness and security has subsided. Think again.
Reality Check: The scars left by the financial meltdown will leave consumers wary of financial institutions for many months to come — maybe even years.
Conservative estimates place the number of banks that will fail this year at around 100. The Financial Brand’s forecast isn’t quite so optimistic. With three banks seized by the FDIC on Friday, the total is now 20 so far this year. That leaves at least another 80 to go. To put this in perspective, remember that there were only 24 failures in 2008, arguably the most dismal year for the financial industry since the Great Depression
Key Questions: What will consumers think about your financial institution each time they read the headlines about more failed banks? How are credit unions going to respond to the flood of bad press about the seizure of U.S. Central and WesCorp on Friday?
Reassuring people is going to take a lot more than simply uttering the words, “We are safe and sound.” Where’s the proof? How will your employees respond when consumers ask you, “But how do I knooooww you’re safe and sound?”
Reality Check: Not one financial institution in the country gets an ‘A’ grade from The Financial Brand when it comes to communicating their strength and safety. (Yes, that includes you, gentle reader.)
Below are 20 questions your entire staff had better have answers for if you’re going to be able to craft a credible “safe and sound” story. The answer to every one of these questions could help you and your staff assuage people’s fears. Think about each one from the consumer’s perspective.
If you’re ready to take your “safe and sound” strategy seriously, check out ICONiQ’s Economic Crisis Communications Checkup. It’s the most valuable $995 you’ll spend this year. (Note: These questions and the analysis of the answers only represent a small portion of the checkup. The project includes a thorough examination of all media, marketing and communications.)
Are you safe? Here’s 20 things your staff better know
- How many assets do you have?
- What is your capital ratio?
- What is your financial institution’s position on TARP? Has it been made public?
- How has your loan volume changed over the last 12 months?
- What is your loan portfolio comprised of? What is your subprime past?
- Do you service your own loans? Or do you sell them off?
- What is your default rate?
- What were your loan loss provisions for last year? This year?
- What was your net income for the last 24 months?
- Do you expect to show positive net income in any quarter in 2009?
- How have your rates shifted in the last 6-12 months (loans or deposits)?
- How have your fees changed in the last 6-12 months?
- Have you had any turnover in the top positions (CEO, EVP, VPs)? How about your board of directors?
- Have you recently merged or are you considering a merger? How about a name change?
- Have you closed or are you closing any branches? Have you built or are you building any new branches?
- In what ways do you support local communities, the arts or charitable/social organizations? What is the annual amount of these activities?
- What sponsorships do you pay for? Little league teams? Stadium names? Concerts? What is the annual amount of such sponsorships?
- What is your travel budget for executives, employees and board of directors? How much is spent on attending conferences and other events?
- What kind of perks are made available to executives, employees and the board — anything, like things like cars and trips?
- Have you been rated by any ratings agencies like S&P, Moody’s, Fitch, Bauer Financial or Bankrate.com?