This all went wrong in 2008, since when they have struggled to rebuild their reputations while managing legacy issues and modernising their business models.
Yet, in the face of today’s crisis, they have shown agility and sensitivity to public opinion.
They now have an opportunity to transform their standing with customers, driving commercial value over the next business cycle.
There were plenty of corporate villains during the first few weeks of lockdown, but absent from the list were banks.
In fact, we saw a series of actions prioritising the wellbeing of employees and customers.
Every listed UK bank avoided furloughing staff, and several postponed redundancy programmes.
Banks provided dedicated helplines for NHS workers and vulnerable people and they became more flexible to those in financial distress.
Over time, they turned their attention to challenges having an impact on wider society.
Lloyds Bank’s partnership with Mental Health UK is an example of how a company can provide practical assistance not only to its customers, but to society at large.
Barclays has launched partnerships with neighbourhood app Nextdoor and Judge Business School to support SMEs.
CEOs have also been visible.
In 2008/09, bosses relied on banking trade association the BBA to speak on their behalf, but the contrast could not be greater this time.
Alison Rose of RBS, for example, has spoken about the Government’s handling of the crisis, Coronavirus Business Interruption Loan Scheme, and workers returning to offices.
Fronting up has helped banks to position themselves as part of the solution rather than part of the problem.
Evidence suggests they are being recognised for their efforts.
At the start of the year, YouGov found that only 17 per cent of British people were favourable toward the banking sector, but by June that figure had risen to 27 per cent.
A 10 percentage point gain is hugely impressive, although coming off a low base, there is plenty of room for improvement.
And make no mistake, the incentive for banks to burnish their reputations has never been greater.
Interest rates have squeezed lending margins, and to improve shareholder returns, banks are shifting toward a 'single-platform' approach that cuts across business lines.
The model hinges on brand loyalty from customers who expect companies to make positive societal contributions.
Despite their early successes, it is likely to get harder for banks to demonstrate these credentials.
Redundancy programmes are resuming, and as bad debts kick in over the autumn, difficult decisions will have to be made, which may lead to more home repossessions and company liquidations.
Meanwhile, the Black Lives Matter movement is raising questions all organisations need to address.
The harsh lessons of 2008 have taught banks that society consents to their existence and that they have obligations towards it.
They have heeded this lesson during the pandemic and, as a result, they are being re-appraised by the public.
Those that can anticipate problems ahead and take actions to solve them will drive the brand loyalty they need to flourish in the recovery.
Del Jones is a director at Headland