As the new Administration takes office next week, financial services companies are preparing for aggressive deregulation that could have lasting effects on their operations. Compliance divestment may offer significant cost savings, but at what impact to your sales revenue?
Communications is an oft-overlooked component of legal and operational transformation, but in this highly polarized sociopolitical environment, silence is a statement.
Over the past 15 years, consumer expectations of all companies have become increasingly stringent. According to the 2024 Edelman Trust Barometer, 60% of people say they buy, choose or avoid brands based on their politics, and 71% say when under pressure to take a side on a controversial or political issue, brands “must take a position.”
In fact, 51% of people report that if a brand doesn’t communicate its actions to address societal issues, they assume it is doing nothing or, worse, hiding something. These sentiments are more pronounced among Democrats and Independents who, historically, also support greater government oversight on issues like consumer financial protection.
But financial institutions, plagued by the not-too-distant scars of the subprime lending and savings and loan crises should be careful to prioritize reputation as deregulation takes hold. A reputational risk assessment and communications strategy can help. Here’s what you need to do:
Review your risk. Take time now to evaluate your clients’ banking choices and motivations. How is your customer base divided on issues related to financial oversight and consumer protection? Is your risk today likely to persist or might it shift as public perception evolves?
Make a plan. As you consider major changes to your business operations, how and when (if at all) will you communicate them to the public? What words choices can you use to maintain consumer confidence in your organization without the built-in bumpers provided by government oversight? Are there any scenarios that warrant more significant planning?
Stay grounded. In our digitized world, everything you say in a public forum lives on well past the moment in which you say it. Consider how your messages may age over time, especially if the political environment, which tends to swing like a pendulum, shifts. Review and test messages carefully before sharing them publicly.
Prioritize integration. Establish active, open lines of communication between legal/compliance and marketing/PR teams. Consider the larger impacts of your compliance program on reputation and marketing and ensure that marketing and PR have early and complete access to information about changes that might require a public response.
Knowing what and how much to share about your organizational decisions can be challenging, but avoiding the issue altogether is never the best approach. Use today’s uncertainty as motivation to invest in a disciplined communications strategy that will protect and improve your public reputation now and for many years to come.
Email us to learn more about how you can communicate through deregulation or book a free consultation.