As the results of our recently released Trust in U.S. Financial Services survey showed, individual investor* trust in the U.S. financial services industry fell sharply in 2011. Oh and don’t forget to check out our awesome infographic below (for the normal size version, click here)
For 46% of individual investors surveyed, trust in the financial industry decreased from last year, primarily due to the perception that “financial services companies have acted in a greedy manner (57%) and that “the industry itself has made the problems worse” (18%).
While the results can seem daunting, the fact is, earning back trust isn’t a new concept. People and companies do it all the time. More and more, people and companies are looking to social media among the tools to help earn back trust and restore their brands. For regulated industries such as financial services, jumping into social media may not be a strategy the compliance office will approve. But companies don’t necessarily need to participate in social media to utilize the basic tenets that can make it such an effective trust-instilling tool. There are three doctrines in particular that I’ve learned as I’ve ventured into the social media realm, which I think are lessons financial services companies should consider as they embark on the challenge of restoring trust on- or off-line:
- Speak your audience’s language: The first rule of the blogosphere is: speak to your audience. To those surveyed, the most important factor to the overall reputation of a financial company, with 91 percent ranking it an eight or nine on a nine point scale (nine being “extremely important”), is “honest communication”. Financial jargon can be confusing for individual investors or other consumers, and if audiences are confused by the content being distributed by financial institutions, how can they know whether or not it’s genuinely honest We know financial concepts and fee structures can be complicated, but taking the time to develop content digestible for the audience to whom it’s intended can go a long way in rebuilding trust.
- Walk the walk: The second most important factor to the overall reputation of a financial company’s reputation is whether or not it “has open and transparent business practices” (84 percent of individual investors ranked this factor an eight or nine on a nine point scale of importance). Social media is the latest way that companies are being held accountable. One of the most important tenets of social media is “do what you say,” (i.e. don’t lie) because ultimately, social media audiences can hold companies accountable in a way that’s louder, more shareable or searchable, and more permanent than ever. Financial services companies don’t necessarily need to communicate their business practice online) but being open and transparent – two characteristics highly coveted by the social/digital world – is an important consideration in taking steps to restore trust with customers.
- Be a face, not just a name: While many people connect with brands online across industries, in the social media realm people would rather connect with other people. In our Trust in U.S. Financial Services survey we asked individual investors who they think are the most credible source of information about financial companies? Thirty-seven percent said their broker, agent, advisor, or banker. In fact, the top three responses were actual people like a portfolio manager and friends and family vs. corporate communications and news media. So, take the time to humanize the brand beyond the logo.
These are just three lessons that financial services companies can learn from the social media world to help rebuild trust with their most important audiences, but there are plenty more. What’d I miss? Looking forward to hearing your thoughts in the comments!
*Individual Investors surveyed in the Trust in U.S. Financial Services study are those with household incomes of $50,000 or more and $10,000 or more invested in liquid assets and/or mutual funds, stocks and bonds, and more than just a 401(k) or Roth/Traditional IRA
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