After weathering tough times, Bank of America's public policy and comms chief looks to position the bank as a more transparent and streamlined company.
Jim Mahoney expected praise for Bank of America when it stepped up with encouragement from the federal government to purchase Countrywide Bank in 2008, preventing the company from collapsing and subsequenly eliminated all future subprime lending by Countrywide.
Similarly, the head of global public policy and corporate communications felt that Bank of America's subsequent acquisition of Merrill Lynch on the weekend that Lehman Brothers went bankrupt would be commended as something in the national interest and viewed as preventing a domino effect and further collapse of the investment banking world.
He was wrong.
"I naively believed at the time because we had stepped up [with Countrywide and Merrill Lynch] we would be praised and if we continued to tell that story people would give us credit for it, but that never happened.
"Eventually we just accepted that the public's sentiment for financial institutions in that period was so overwhelmingly negative we were not going to be viewed as heroes," says Mahoney.
Various posts at Bank of America. Corporate comms and public policy executive (2008); public policy executive (2004)
Director of corporate communications and government relations, FleetBoston (which was acquired by Bank of America in 2004)
Secretary of the Federal Reserve
Bank of Boston
District director for Congressman Joseph P. Kennedy II (D-MA)
Program director, Citizens Energy Corp.
He contends that Bank of America's higher-profile nationwide presence from a retail banking standpoint and its place as the second-largest US bank by assets further intensified the spotlight and placed it firmly in the crosshairs of a public justifiably angry and distrustful of the entire investment banking marketplace.
Mahoney, who is responsible for external and internal communications, federal and state government relations, and issues management, jokes that he technically has had the same job for 15 years, but feels like he has had at least five different jobs because the company has gone through tremendous change over his tenure.
Mahoney became part of the Bank of America team after the company acquired Fleet Boston in 2004. Prior to that, he was secretary of the Federal Reserve Bank of Boston.
"Jim has an innate ability to understand complex issues and communicate them in a straightforward, comprehensible manner. That served him well when he worked at the Federal Reserve and it continues to serve him well," says Richard Syron, former president of the Federal Reserve Bank of Boston.
Mahoney says his biggest communications lessons during the recent tumultuous time in the financial world involved the Troubled Asset Relief Program (TARP).
At the time TARP capital was allocated to the original group of banks some, including Bank of America, said they would prefer not to have the funds. Pressured by then-Treasury Secretary Henry Paulson, all the banks ultimately agreed to accept the money because it was important there was no perceived division between strong banks and weak banks by the public, businesses, or investors.
Mahoney contends that TARP was probably one of the most successful government initiatives in a long time because it did, in his opinion, prevent a collapse of the economy and the money that went to the banks was all paid back with interest.
"The banks are almost double the level of capital they were before the financial crisis. We're in much better shape, particularly compared to Europe where those steps were not taken," says Mahoney.
He adds, however, that to this day "people have a misconception of what was at the heart of TARP. It was created by the Bush administration and Congress to prevent a collapse of the Main Street economy. They didn't do it to bail out the banks. There was a lot of high emotional voltage going through the wires at that time that made it difficult to explain anything clearly. To this day we have been unable to communicate that point effectively," says Mahoney.
Having weathered the choppy waters surrounding instability in the banking sector and TARP, the communications team at Bank of America noticed in September 2011 some discontent bubbling up on social media after an internal communication went public regarding a potential $5 debit-card fee the bank was thinking of instituting in three to six months - something other banks had already done without drawing a lot of criticism from the public or the media.
Negative updraft grew and Bank of America's attempts to educate the public about the small percent of customers who would be affected by the fee fell on deaf ears. "The $5 debit fee was something that was completely misinterpreted. Some people thought that whenever you used your debit card you were going to be charged $5," adds Mahoney.
With no internal plans or processes in place to institute the fee and so much social media unrest, negative mainstream media coverage, and political outcry it was an easy decision to scrap the fee. "The issue is a great example of how something can be happening in the banking industry and it becomes just about Bank of America. Other banks had already implemented debit-card fees, but no one had really paid a lot of attention to it.
"That showed how our level of exposure was different than other banks and led to more challenging communication issues like that one," says Mahoney.
Bank of America has made great strides in its effective use of social media. Though not under Mahoney's purview, the consumer banking department that monitors social media and addresses customer complaints has been effective at helping change the tone of the online conversation about the bank. Strong monitoring capabilities on social media also informs the communications response with real-time data.
Corporate social responsibility at Bank of America is going to be more about incorporating CSR into its business. In June 2012, Bank of America launched a 10-year, $50 billion environmental business goal targeting climate change, reducing demands on natural resources, and creating lower-carbon economic solutions.
"We are investing in customer efforts to move the country onto a more sustainable path whether that is alternative energy investment or improving efficiency in buildings.
"This is something we are trying to infuse into the way we think about our business and part of the way we are looking at oppor-tunities to grow the economy," says Mahoney.
Social media relationship
What Mahoney finds most compelling about social media is its effect on the relationship between marketing and communications.
"Social media is generating a lot more integration. The siloed nature of communications versus marketing is almost disappearing now. "The marketing people have so much more money than we do, we get to be more part of that, which is good," jokes Mahoney. "The nature of how we think things through and approach influencing the marketplace is becoming much more of a continuum."
He believes advances on the digital side are also redefining the relationship between corporations such as Bank of America and the media to an extent, but while the bank can create and distribute its own content, media companies still have "one of the most important institutions of our society; the journalist. No matter how high quality our content is we don't have the ethical framework that you can wrap around the story," he says. "Media companies have that."
With lessons learned during what has been one of the toughest times in the history of the investment banking sector, the bank is looking to reposition itself from a brand standpoint. The goal is to effectively communicate that Bank of America is a less risky, more transparent company to regulators, customers, and employees. Messaging will focus on the bank as a downsized and simplified company.
The bank has divested companies accumulated over the years that were one-off freestanding profit centers. It has shed investments in China Construction Bank, Canadian and Spanish credit-card businesses, Mexican and Brazilian banks, and gotten rid of a lot of its private equity investments.
"The work Jim does every day connecting with elected officials, media, employees, and others is central to our efforts to rebuild our brand and position our business for future growth," says Anne Finucane, global strategy and marketing executive, Bank of America.
"The major criticism of the financial industry was that it got too complex and too risky. We want to go 180 degrees from that and show we have done a lot to fix that problem. Communicating that in the coming months is my number one priority," says Mahoney.