Unanswered Criticism Could be Costly Strategy for U.S. Banking Industry

CINCINNATI, Nov. 18, 2011 /PRNewswire/ -- For all the talk about greed, opportunity inequality, and accusations about undue influence that financial institutions exert over government, the Occupy movement is at its core an anti-banking organization. And for many Americans, interactions with their local bank branches are the basis for most of their knowledge of financial services.

As a result, Occupy activists declared "bank transfer day," urging people who are frustrated (as research indicates a majority of Americans are) to close their accounts with mega-banks and deposit their money somewhere else.  According to the Credit Union National Association (CUNA), the calls appear to have had an impact. In a four-week period, CUNA reported 650,000 Americans joined credit unions, which added $4.5 billion in new savings accounts.

With Occupy demonstrations spreading from New York to Chicago, Washington, Los Angeles, Boston, and even to Puerto Rico (900 cities overall, by some tallies) there is little guarantee that the carnage will be restricted only to mega-banks. It is a movement powered by social media giants Facebook, Twitter and YouTube. Yet surprisingly amid this turmoil, banks have done little to join the conversation and defend their brand, their services and their reputations.

"Granted, being under fire is no picnic," said crisis communications expert Mike Maul, president of Wordsworth Communications headquartered in Ohio. "Even for companies that ought to know better, Plan A often devolves to burying your head in the sand and ignoring the threat until it goes away. By the time they get around to Plan B, the damage can be astronomical."

Like those who hate humanity but love people, much of the American public may dislike the financial services industry while feeling a little protective toward the folks at their local bank branch.  It is to this population that the banking industry needs to wave a banner around which more moderate opinion-holders may rally.

There is a lot not being said about banks in what has so far been a very one-sided argument. For instance, banks make a profit and, yes, they charge for conveniences customers choose to purchase. But they also provide employment at a time when jobs are sorely needed, many to those who are underrepresented in the workforce, such as recent college graduates. And they also plow millions into the lives of local communities where the need is great, sponsoring everything from marathons and food banks, to charity walks, amateur athletics and the performing arts.  Unlike the financial services markets in which they earn their income, these are donations to the communities in which they work; by no means are they moneymakers.  

"What the banking industry needs to focus on now is deconstructing the caricature of it that the Occupy movement has drawn," said Maul, who has counseled numerous Fortune 100 companies on reputation management.  As demonstrators trade the confines of tents in municipal parks for more accommodating social media space, banks should not mistake the change of venues as the end of anything.  "There's still time for banks to un-demonize themselves," he said. "But not an infinite amount."

About Wordsworth Communications

Wordsworth Communications is a full-service marketing communications and public relations agency based in downtown Cincinnati, Ohio and is Cincinnati PRSA's 2011 small/midsize Agency of the Year. Founded in 1989, the company helps manage the B2B and consumer brands of multi-national, national, regional and local companies.

SOURCE Wordsworth Communications