OUR THINKING/ARTICLE

Can financial services win back the public?

Hasan Chowdhury

Our trust in the corporate world has been dropping for well over a decade. Here, we look at what finance leaders can do to get it back and how thought leadership can play a part.

2021 opened with a jolt for Wall Street. The GameStop saga, which saw users of the website Reddit squeeze these powerful investors of billions of dollars on a stock bet, had sent these masters of the corporate world a message: you can’t be trusted.

Since the financial crash of 2008, echoes of the Occupy Wall Street protests that emerged in its wake have amplified amid growing scepticism of financial services. So the GameStop episode was not a one-off event in which profiteering short sellers became the target of a mob of amateur investors – there has been growing distrust of the financial sector for years.

Finance leaders face an uphill struggle for trust

It is not just on Reddit forums that trust in financial institutions is low. According to Edelman’s latest Trust Barometer, which surveyed over 33,000 people in 28 countries between October and November 2020, trust has declined in the financial services industry for the second year running.

About six in 10 people believe that finance leaders are trying to mislead them with rhetoric that is either wildly exaggerated or flat out false, while the perceived credibility of information coming from CEOs is at an all-time low in France, Japan and Brazil.

In a world rattled by a pandemic that has brought about the greatest economic crisis in a generation, leaving millions of people out of jobs, this crisis of credibility could escalate. Marketing and communications experts at financial institutions have a complex and urgent task on their hands: how can they use thought leadership to improve trust?

The business case is clear cut

Fortunately, there is a silver lining. As Edelman’s Trust Barometer notes, businesses maintain a lead over governments and non-governmental organisations on competence and ethics, which gives them something to work with as they try to win over the public. Two-thirds of people in the research want CEOs to lead on change and not wait for governments to make the first move.

In January, the annual Davos summit in Geneva brought the idea of ‘fairer economies’ into sharper focus as part of its broader theme: ‘a crucial year to rebuild trust’. And it highlighted stakeholder capitalism, which is a growing force for rebuilding trust with the public. But the sector has not done enough to show that it really recognises the advantages of gearing investments towards social and environmental goals in building fairer economies. For instance, few commitments set out in a letter signed by 181 CEOs of the Business Roundtable in 2019 are yet to come to fruition.

There is a clear business case for them to get going. Research by PwC finds that ESG funds in Europe could see a threefold increase in assets by 2025 , overtaking the number of conventional funds. And there is another side to the business case: these new sector trends can help to show the public that the sector is listening carefully to its concerns and responding accordingly.

This is where thought leadership comes in.

Thought leadership in 2021 will start with trust

Thought leadership from businesses in the financial centres of the world needs to communicate a willingness to listen to the concerns of stakeholders as well as shareholders.

Insight-led content is a tool, driven by data, surveys and expert interviews that can help finance leaders address those concerns with a fresh perspective. Go one step further and lace that content with practical solutions on top of your insights and address the concerns in the real world. Only then will brands start to win back that lost trust.

In August, the World Economic Forum will reconvene in Singapore for its Special Annual Meeting to discuss recovery from the pandemic. The theme is “The Great Reset”. Marketers in the financial services industry would do well to begin their own reset with a conversation about trust.

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About the author: Hasan Chowdhury

Hasan joined Longitude as senior editor in 2020, bringing clients across the technology and financial services sectors engaging and in-depth thought leadership campaigns, with clear narratives built from diligent research skills and extensive editorial expertise. 

Hasan brings a wealth of storytelling experience from his background in journalism. Most recently, he was a technology reporter at the Telegraph for over two years, writing and reporting on businesses and technology from both a UK and global perspective, providing fresh insights with exclusive news stories and detailed analyses. Prior to this, Hasan was a Wellcome Trust Scholar at the New Statesman, where he wrote science and technology stories. He also worked as a freelance journalist for the Financial Times, writing feature articles for the newspaper’s Special Reports desk.

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