I just completed a brief online survey about the financial crisis.
The question was: "What do you believe to be the most challenging factor facing (the financial) industry over the next five years?"
Here's the current result:
30% … winning back the public trust, after losing billions in people's savings
27% … staying ahead in the technology curve to innovate and improve efficiency and customer experience
20% … changing the personal image of the 'financial services executive' to that of a server of the greater good rather than only self-fulfillment
14% … working closely with the government to ensure regulations are stringent, fair and obeyed
9% … advocating investment and financial attention to world issues (global warming, third-world country development, infrastructure, etc.)
I've no idea how many people voted, but I do know that it's more than a few hundred and many of them are senior guys in banking.
What amazed me about this result is that "winning back the public trust" will take years, probably decades. For example, a recent paper by the economist James K. Galbraith includes this key paragraph about the recovery after the Great Depression of the 1930's:
"What did not recover, under Roosevelt, was the private banking system. Borrowing and
lending—mortgages and home construction—contributed far less to the
growth of output in the 1930s and ’40s than they had in the 1920s or
would come to do after the war. If they had savings at all, people
stayed in Treasuries, and despite huge deficits interest rates for
federal debt remained near zero. The liquidity trap wasn’t overcome
until the war ended.
was the war, and only the war, that restored (or, more accurately,
created for the first time) the financial wealth of the American middle
If this is the case, then investing in gaining trust will fall on stony ground for quite a while to come.
Then the second key vote: "staying ahead in the technology curve", is also interesting.
Now I advocate that banks must be on the leading-edge of technology as it is a bits and bytes business, but I don't see many banks investing in staying ahead of the technology curve right now … and even less investing in staying ahead of the curve by using technology to gain back customer trust.
If they were, I would be pointing out lots of examples of banks using scoial media to gain trust … and yet, in the UK in particular, I find it hard to spot even one. A point emphasised recently.
Now there is some good news in that First Direct launched their new media newscentre service last week, a first for British banks.
But there are not that many banks using technology to move ahead of the curve whilst gaining trust.
The only banks doing this appear to be the one's launching customer engagement platforms using social media, such as HSBC's small business community service, First Direct's social media newsroom, Caja Navarro's social lending platform, BBVA's tu cuentas, Wells Fargo, Bank of America and all those other case studies and stories I've blogged about recently.
For the banks not doing this stuff, well, they are stuffed aren't they?