Reputational Risk: Banking's Tarnished Image

February 06, 2009 at 1:33 PM
There's a movie due out later this year in which the bad guy is - you guessed it - a bank. The International will feature an Interpol agent (Clive Owen) and the Manhattan District Attorney (Naomi Watts) working together to uncover all manner of illegal activities at a particular international bank - including money laundering, arms trading, and the destabilization of governments. Good grief. You can count on Hollywood to demonstrate a keen understanding of the average American consumer's mindset right now (http://www.imdb.com/title/tt0963178/plotsummary).
But what about the banking industry itself? Where is the voice of the industry in all this? While individual banks are working overtime to communicate with customers, employees, and shareholders, there seems to be no unified voice for an industry that is in crisis and risks permanent reputational damage.
Banks, and especially community banks, have long been perceived by customers as relatively trustworthy. With this reputation in jeopardy, what are the industry's biggest advocacy groups doing? Where's the ABA, ICBA, Financial Services Roundtable, etc.? I appreciate these organizations are spending countless hours fighting individual pieces of proposed legislation on Capitol Hill - and rightly so. But there is a bigger battle to be fought as well.
In New York, one is often asked "what do you do"? which, translated, means "where do you work"? Bankers who are still employed are resorting to lying so as not to be subjected to an onslaught of anguished criticism. I'm not making this up; people are mad, and they are taking it out on all banks and all bankers, even those who had nothing to do with the mess we're in now. It's time for the industry's leading advocacy groups to step up and address proactively (as best as possible) issues that are tarnishing the industry's good name. Remember, we're talking about an industry that leads all other industry sectors in the US in monetary donations to community and nonprofit organizations ($1 billion in 2007)!
I've been a banker or consultant to the industry for my entire career, and I have no intention of lying about that at a cocktail party. Unlike John Thain, I don't have a $35k commode in my office (http://www.thedailybeast.com/blogs-and-stories/2009-01-22/john-thains-top-16-outrages/). We need our industry advocacy groups to get in front of this reputational tsunami.
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