The modern consumer has so much choice when it comes to fulfilling their banking needs. With this in mind, how can you as a financial institution stand out from the competition?
The thing is, credit unions, banks, and other financial firms shouldn't just "bank" on the fact that they are geographically convenient or offer the latest technology for their potential client base. While appealing, these factors may not be sufficient to attract and retain great customers.
In this article, we're highlighting why reputational risk management matters so much for banks, as well as some simple things you can do to reduce the risk of costly "dings" to your brand.
The Impact of Reputation Risk in Banking
Survey data indicates that reputation is a heavily weighted factor for individuals when determining who to trust with their financial services. Unfortunately, gaining consumer trust is more of an uphill battle for banks compared to years past.
Widespread economic challenges (e.g., the bailouts of 2008)
Not all of these factors are within your institution's direct influence—but all have potential impact. Low trust and reputational damage drives new clientele away and increases customer turnover. In severe cases, reputational damage caused by security breaches are often associated with direct costs like hefty fines.
Clearly, genuinely caring about your brand recognition and public-facing image matters—especially now at such an uncertain time in our country's economy.
3 Factors To Help Manage Reputational Risk in Banking
You have a great institution that deserves to work with great people. Here are three things to focus on that will help you do this, especially if your bank has acquired another recently:
1. Double Down on Your Company Mission and Values
Be clear about your institution's mission and values. Everyone in your company should be aware of and willing to uphold these ideals. Doing so can:
Improve cohesion and ensure everyone works together for a common goal
Improve workplace experience and morale, helping you attract and retain great talent
Enhance customer service (since customers get to work with staff members who are in alignment and offer a consistent experience)
Improve shareholder trust
You guessed it—boost brand reputation!
2. Focus on Big AND Small Business
Build trust by offering technologies that make it easy for clients to feel more control of their finances. These technologies should be easily streamlined and intuitively scalable in order to work for large businesses, small businesses, and individual consumers. Consulting with IT professionals can be hugely valuable here!
3. Use High-Quality Cybersecurity Services
Almost nothing is more impactful when it comes to reputation risk in banking than a cybersecurity breach. Besides tarnishing your institution's reputation, a breach can threaten the safety and solvency of your clients and shareholders.
That's why it's imperative to be able to identify and correct your vulnerabilities, prevent cyber attacks, create a workplace culture of digital safety, and quickly course-correct if and when the worst does happen. To this end, having a knowledgeable and passionate IT and cybersecurity team in your corner—even on a consulting basis—can be invaluable to your company's long-term success, as well to the privacy and dignity of your customers.
Is Your Financial Institution Vulnerable to Reputation Risk?
Contact Integrity Technology Solutions today to schedule a consultation with one of our experienced team members and find out how our services can help you build better relationships with your clients.