Feature: How financial firms can rebuild trust

PRWeek reveals new findings on public faith in financial product providers. Robert Gray investigates, and asks communicators in the sector about their strategies

You are more likely to trust this article than any you may have read in the past four years. According to research by BBC and Reuters, which polled more than 1,000 people in March, trust in the media has risen from 29 to 47 per cent since 2001. This improved level of public confidence should be good news for PR practitioners. But it may not have translated into heightened trust in the products and companies about which journalists write. This is of particular concern to embattled financial services institutions (FSIs). 

FSIs have suffered from two years of reports about everything from mis-selling to unfair bank charges - and the stories are not going away. The challenge for financial services PROs, then, is to restore trust in these institutions.

Independent research
According to new research, public trust in the financial services sector is, perhaps inevitably, mixed. The research was carried out by The Financial Services Research Forum, an independent body affiliated to the Nottingham University Business School. It interviewed more than 1,500 people, providing the first analysis of what makes us trust financial service providers. Instead of seeking simple yes/no answers, it identified two core measures of trustworthiness and their underlying drivers.

The first, Low Level Trust/Trust­worthiness, relates to the extent to which an organisation can be relied upon to act on its prom­ises. Higher Level Trust/Trustworthiness deals with the extent to which an organisation is concerned about the interests of its customers.

Perhaps the most surprising finding is that, of the five main factors affecting a company's trustworthiness, comms is one of the least effective. This may set alarm bells ringing. Is it truly the case that communication in the financial services sector has little impact on trustworthiness?

According to Nigel Waite, the for­um's executive director, the research has ‘tried to dig underneath the superficial views of trust', both for the financial services sector as a whole and for different categories of FSI. Waite stresses that the survey relates to FSIs' own channels of communication, defined as official statements, terms and conditions and product updates - although this communication reaches customers both via the press or through direct mail.

The good news is that consumers are ‘moderately trusting' of FSIs with the institutions scoring highly compared with non-financial institutions such as the NHS and the BBC. The bad news is that while FSIs receive high ratings in relation to their ability/expertise, they are weakest in relation to shared values (see panel, left, for definitions).

Respondents over 65 typically displayed higher levels of trust in FSIs than did younger participants. This suggests that a big challenge lies ahead in communicating with a younger demographic. Indeed, according to Waite, young consumers represent a trust ‘timebomb' - largely because they are more used to dealing with FSIs remotely, managing their bank accounts and buying insurance products, for instance, online.

One important finding though is that comms around an FSI's values and integrity can have a significantly positive impact. ‘If PR practitioners explain the way in which a company operates with integrity - such as how it follows CSR policies and deals fairly with customers - the better chance that FSI has of building trust,' says Waite. He adds that product launches - PROs' ‘bread and butter activity' - normally carry none of these ‘integrity foundations' and leave customers uninvolved.

Bridging the gap
It is a viewpoint that more in the financial services sector are beginning to understand. Laura O'Connell, director of The Wriglesworth Con­sultancy, says: ‘Part of the problem is the fact that financial services are intangible products. This makes them ‘boring' and ‘complicated' to many people. Even before crises such as mis-selling, there was a gulf between providers and their customers. Often, FSIs caught up in the biggest scandals deliver the worst communications.'

O'Connell points to Wriglesworth's work for client Safe Home Income Plans (SHIP) as an example of how
integrity-based comms can greatly improve trust. SHIP is the industry body for equity release firms (which let older people unlock the equity in their homes to provide additional finance for their retirement), one of the fastest growing areas of financial services.

Two years ago the sector was overwhelmingly mistrusted by national journalists, many of whom deemed it to be ‘the next mis-selling scandal waiting to happen'. SHIP was itself singled out for criticism by some journalists. O'Connell puts this down to a lack of proactive communication by SHIP.

‘A programme of providing media with regular clear and detailed information, taking the lead on all industry issues and projecting SHIP's genuinely customer-focused stance, has improved the reputation of both firm and industry,' claims O'Connell.

‘In recent Financial Services Authority research on the sector, SHIP was praised as a leading industry partner. Initiatives from SHIP designed to raise standards in the industry, such as an adviser checklist for use during the sales process, and compulsory examinations for advisers, have been warmly welcomed in the industry and praised by media.'

High expectations
However, it could be argued that the financial services industry for the most part has not engaged in ongoing dialogue with customers and consumer groups. In April, Weber Shandwick, through sister firm KRC Research, surveyed 2,015 UK adults. ‘Consumers are increasingly discerning and expect a certain level of service from all companies, including banks, insurers and pensions firms,' says Jeff Watt, Weber Shandwick Square Mile director of financial communications and markets. ‘We found that despite the fact that 78 per cent of people feel their bank provides clear information, only 33 per cent trust their service provider to sell them the right product.'

The KRC research also looked at where consumers get their financial information. The most popular source was family and friends (62 per cent). But news websites, lifestyle magazines, podcasts and blogs were also shown to be popular sources. 

A consumer audience increasingly using diverse media means that FSIs must adopt a multi-discipline comms strategy, underpinned by a clear understanding of how to reach specific audiences. ‘It is not enough to rely on the personal finance pages,' adds Watt. ‘We found that 53 per cent of people never pick up tips or advice from newspapers. Communicating in the right way and using the right outlets will help to improve trust.'

Some FSIs are beginning to better understand their customers.  Lansons Communications CEO Tony Langham says no one today would run a campaign straplined ‘We're here to make you richer', or style themselves as ‘The listening bank' or ‘The bank that likes to say "yes"' - because such claims are hardly credible.

‘There is a lot of extremely positive work being done to rebuild trust with the consumer,' agrees Prudential director of PR Jon Bunn. ‘For example, Prudential's CSR programme focuses on helping people become more informed about their financial wellbeing, building the long-term capacity of community organisations to provide financial education, and placing financial literacy firmly on the agenda.'

The FSA's Treating Customers Fairly initiative, meanwhile, is helping it to clamp down on confusing communication and shoddy practices. This drive will, no doubt, help improve perceptions of the sector, but there is still a way to go.

A recent FSA poll found that even at firms whose senior management is committed to adopting the initiative, implementation is rarely filtering through to frontline activities.

So, what are PR professionals doing to improve trust in financial institutions? See below for PRWeek's look at the Trust Index scores of financial service providers, in which heads of comms reveal how they think their work can affect trust. We also consider the role that journalists themselves have to play in improving public trust.


There are five drivers of trustworthiness in the forum's report: benevolence,  integrity, ability/expertise, shared values and communications. Regression analysis suggests comms is one of the weakest of the five in terms of influence.

01.  Benevolence - Extent to which a financial services firm is concerned about customers' interests.
02.  Integrity - Extent to which a firm is honest and consistent in what it does. 
03.  Ability/expertise - Extent to which a firm is seen as having the necessary ability to deliver its services.
04.  Shared values - Extent to which consumers believe a company has values similar to their own.
05.  Communications - Extent to which a firm communicates well/effectively.


Trust Index summary*: banks and building societies scored similarly on overall trust - 74.5 and 74.3 respectively - ranking second and fourth out of a list including insurers, brokers and credit card firms. On communication, however, building societies scored slightly better than banks - and outperformed their non-mutually owned rivals on shared values and integrity.

Martin Rutland, Head of corporate communications, ING Direct

The financial PRO's view
‘Traditionally, banks have a poor record when it comes to transparent comms with their customers. Quite rightly, many people feel let down because their accounts have catches that aren't clearly signposted. To cite just one example, more than a million savings customers who have been penalised for withdrawing money say they had no idea there were withdrawal penalties.

‘As the Trust Index clearly shows, this poor communication can engender cynicism - for instance, 34 per cent of our savings customers are more likely to recommend their shampoo brand than their financial provider. When we launched our savings account in May 2003, we were determined to offer a fresh alternative with a straightforward approach.

‘What the industry can learn is that by keeping things simple and transparent, you can win customers' trust.'

Martin Bamford, Author of ‘The Money Tree'

The journalist's view
‘Financial services have a poor, but often undeserved, reputation in some quarters. Banks and building societies are often accused of causing debt problems by virtue of their "pushy" lending policies. So-called advisers from such firms are often little more than glorified sales people selling overpriced and sometimes inappropriate products.

‘The better ones, of course, behave differently. Consumers' poor experience often comes down to being on the receiving end of a product sale rather than receiving true advice. Banks have to be good at PR to protect themselves from accusations of mis-selling and poor value. The biggest communication challenges they face are convincing customers they are trustworthy and represent best value when attractive alternatives, such as independent financial advisers, are readily available.'

Trust Index summary*: household insurers lagged behind financial advisers, banks, building societies and credit card companies on overall trust, but were several points ahead of life assurance providers - which came bottom. It was a similar picture when firms were judged on comms, shared values, integrity and ability/expertise - except that life assurance providers pushed investment firms into the bottom slot.

Alasdair Buchanan, Group head of communications, Royal London

The financial PRO's view
‘The research findings are not entirely unexpected. The life and pensions industry has had more than its fair share of "scandals" in recent years - personal pensions mis-selling; mortgage endowments; "precipice" bonds. So trust has often been in short supply.

‘The industry has, to a considerable degree, taken the implicit challenge on board. Various schemes and initiatives have been launched, and are running. But in many respects the major challenge is communicating the improvements that have been made. How can you do this effectively if your customers have a low level of trust?

‘Building understanding in partnership with trusted third parties and independent commentators looks to give us the best chance of success.'

Nic Cicutti, Former personal finance editor at The Independent and editor of Ftyourmoney.co.uk

The journalist's view
‘Journalists, insurers and their PR people - and consumers more generally - operate in an interdependent world. Sure, we rub shoulders. Some insurance company PROs are straight, decent people. They try to answer questions honestly, even if they are often hamstrung by their companies' unwillingness to open up fully.

‘Yet the fact remains that for many personal finance journalists, their experience of how insurers really work is through the eyes of readers, listeners and viewers. Many people's lives have been ruined by the mis-selling of pensions, endowment policies and other inappropriate savings schemes. After years of such exposure, it is not surprising that the majority of the public don't trust insurers. Nor do most journalists - and there is no PR "magic pill" to make that go away.'

Trust Index summary*: brokers gained the highest overall trust score of any financial institution. Independent brokers rated significantly higher than those that were, in some way, tied to a particular provider. They outscored all other kinds of financial institution on communication and posted very strong scores for integrity and ability/expertise. They fared less well on shared values, though.

Drew Wotherspoon, Head of communications, John Charcol

The financial PRO's view
‘I am not surprised by these findings. Home ownership, and the subsequent ownership of a mortgage, is a very popular topic of conversation these days. With this greater awareness and progressive education, consumers are naturally gravitating towards independent brokers to get the best product for them.

‘When they get sound advice, the level of trust naturally grows and is shared among peer groups. The challenge is to build on this, particularly with the younger generation. As well as our traditional method of targeted press coverage, we look at the internet as both a driver of traffic and an educator for the homeowners of the future. We firmly believe it is about communicating to the audience via the means with which they are most comfortable.'

Victoria Hartley, Editor, What Mortgage

The journalist's view
‘Internet research is one thing, but consumers still trust financial advisers to help with a final decision. So it's no wonder consumers value independent advice so much. But as an industry observer, it's clear the standard of service still varies hugely from broadly based excellence to opportunistic, pushy sales tactics that insult customer intelligence and disadvantage customers.

‘Few consumers have a benchmark for comparison so accept shoddy service standards or opaque fee structures in direct conflict with the FSA's Treating Customers Fairly initiative. On the PR side, the majority of advice firms are SMEs with plenty of sole practitioners, so the industry has a low PR profile relative to volume of business. Gaining trust and managing client expectations is probably the biggest challenge for PR professionals in the financial advice industry.'

Trust Index summary*: credit card firms ranked third on overall trust, splitting banks and building societies and coming in ahead of household insurers, investment companies and life assurance providers. They rated second best on communications, a position also achieved when judged on benevolence and ability/expertise. They came third behind brokers and building societies on integrity and shared values.

Ian Barber, Head of PR, Barclaycard

The financial PRO's view
‘These are large and rather ephemeral themes but the research does partly reflect what we see. Stakeholders are beginning to recognise improvements in a number of areas: clearer communications, investment in responsible lending and fraud prevention, and providing support to customers in difficulties.

‘On a practical level, consumers know that credit cards offer convenience and protection - whether they're buying a beer in Bermuda or a balti in Birmingham, our products rarely let them down.

‘Finding the right balance between clear comms and information overload is an ongoing challenge in financial services, but it's encouraging to see cards ranked relatively highly.'

Clinton Manning, Business editor, Daily Mirror (pictured)

The journalist's view
‘Whether they trust them or not, many consumers have come to heavily rely on their credit cards. For those who use them sensibly and carefully they are flexible friends - a safe, simple, cheap and convenient method of payment. But for those less adept at handling their finances, they can be a road to ruin.

‘To be fair it is tough for the companies to get good PR. When things run smoothly it is hardly big news. By contrast, horror stories - true ones - about people running up colossal debts prompt damaging headlines. The card sharps do themselves little favours though by imposing sneaky charges and sky-high interest. And waiting for the OFT to force them to cut punitive penalty fees was a huge own goal.'

 *Base-level trust measures ‘cognitive' trust - the extent to which an organisation can be relied on to do what it says. Trustworthiness relates to the extent to which an organisation is believed to be concerned about the interests of customers.

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