The value financial institutions bring to our society and the role they play has been lost in the maelstrom of the regulatory debate around financial reform, ongoing hearings and investigations on Capitol Hill, and lingering populist anger toward Wall Street. That anger is based on many factors. Many are mad over taxpayer assistance; many think financial services are just too complex; many say the financial services industry has cut off lending when people need it most; and many perceive abuses in executive compensation.
Some of it is true, some is myth, and a lot of it is misunderstanding about what the securities industry does to grease the wheels of the economy and its role in many communities around the nation.
Now more than ever - in the face of the scrutinizing public, policymakers, and media - financial services companies must be transparent and proactive in demonstrating how they have changed their practices and how they are doing their share to drive economic growth.
Many are doing just that. From customer-focused national ad campaigns by Bank of America to JPMorgan Chase's "The Way Forward" initiative, which highlights its commitment to increase lending to small businesses, companies have changed how they communicate. The securities industry trade group SIFMA has implemented a Web-based strategy, InvestedinAmerica.org, to demonstrate how the financial industry contributes to job creation and growth.
Still, the stigma remains and there is work to be done. To regain trust, financial institutions should take a regional approach and step outside the Washington-New York political and financial corridor to communicate. There is a huge opportunity to be part of a dialogue where the clients are - across the US. The base of spokespeople for the industry should include regional leaders and financial advisers who have their clients' trust. And the value of third-party allies cannot be underestimated.
The message must be simple and clear. The industry has always been viewed as complex and opaque. It's now more important than ever to explain what it does in an uncomplicated way.
Reputations don't change overnight. The financial industry must demonstrate its contribution to economic growth, admit mistakes, and show constituents that matter they're part of the solution.
Steve Lipin is a senior partner at Brunswick Group.