Financial services companies' reputations have hit a new low. In its 10th annual Reputation Quotient (RQ) survey, Harris Interactive found that financial services now share the lowest industry ranking along with the tobacco industry. Just 11% of the public gave a positive rating to the industries.
That's a damning assessment. AIG, for example, made its first appearance on the list, and promptly achieved a near record for low scores, on par with Enron in 2005. Of course it isn't shocking that financial firms' reputations are in the gutter, given the near catastrophic collapse of Wall Street titans, one after another, this past year. What is disconcerting, though, is that these firms are still polling low despite some of them seeming to get back on track as far as their earnings and, subsequently, vitality.
Where the firms continue to fail is in two big categories that consumers consistently continue to demand action on: sincerity and transparency. Robert Fronk, an executive at Harris Interactive, noted in the assessment that these firms “are not seen as being sincere, transparent, accurate, or consistent in their communications, all of which have a very high correlation with positive reputation.”
The deep cuts to the financial services industry's reputation is not going to blow over. Smart companies will see this as an opportunity to get ahead of their competitors by aggressively managing their corporate reputation, and working to reengage the public.
The business community hopes to untangle itself from Washington's grip as it works to pay back its TARP debts, but populist pandering isn't likely to stop anytime soon in the Capitol. If Washington is to back off, the public will have to be convinced that these companies can be trusted again.