The 2008 financial crisis continues to be felt by financial services firms and consumers, according to a new survey by Makovsky, a communications firm.
Ebiquity conducted an online poll of two groups for Makovsky in the spring: 228 executives responsible for the management and supervision of communications, marketing and investors relations for their financial services company of 500 or more employees, and a random sample of 1,079 adults representing the general U.S. population.
Eighty-six percent of financial services communications professionals in Makovsky’s “2016 Wall Street Reputation Study,” released Tuesday, said the perception of their firm was still being affected by the financial crisis.
“The data makes clear that the financial crisis remains the prism through which Wall Street is viewed and judged,” Makovsky Executive Vice President Doug Hesney said in a statement.
He added, “The collapse of Lehman, and all that came afterwards, casts a long shadow over the reputation of the entire financial industry. Despite some headway, it is clear that these institutions must continue to persistently address reputational issues.”
The annual Makovsky study found U.S. consumers were also still feeling the effects of the 2008 crisis and resulting recession. Thirty-three percent of consumers in the survey said they were unable to save as a result of the crisis, and instead were living paycheck to paycheck, up from 29% in the 2015 poll. A third said they’ve had to significantly cut back spending, up from 26% in 2015. And 91% remained concerned about the possibility of a future crisis.
Risks to Reputation
The financial services sector cannot help but be concerned that more U.S. consumers are finding it hard to trust financial institutions again. Twenty-seven percent of consumers surveyed said they had lost trust in the financial services industry, particularly with regard to personal data, a five percentage point increase from 2015.
Eighty-six percent of respondents said the unauthorized access of their personal and financial information would likely cause them to switch to an alternative financial service provider, well up from 73% who said this in 2015. And while more than a third of consumers identified a failure to protect personal and financial information as the biggest threat to a financial services firm’s reputation, data security was not the only cause of continued tension in the relationships between financial institutions and customers.
Seventy-eight percent of consumers reported that even negative news about their current financial institution—such as regulatory issues, illegal activity or fines—would likely prompt them switch providers. A similar percentage said they would go to another provider that offered lower costs or fees, and more than half would go to a firm with advanced mobile technology.
When addressing consumers’ concerns, financial services professionals in the study focused more on their individual firms than on trust in the industry as a whole. Twenty-one percent said differentiating their firm from bad players in the industry was the greatest reputational challenge they must address this year. Just 13% identified rebuilding trust in the overall financial system as the greatest reputational challenge to address.