“Greedy” and “impersonal” are not flattering words for a person or a company and, according to a study of 650 U.S. consumers, this is how they view financial institutions—banks, insurers and financial advisers. The “Cohn & Wolfe Financial Confidence Survey,” conducted last week by online global research provider Lightspeed Research and commissioned by Cohn & Wolfe, shows the public has little trust in these areas.
When asked to list words to describe financial institutions, “greedy” and “impersonal” were each selected by 32% of respondents, “opportunistic” was selected by 26% and “distant from me” was chosen by 22%. Respondents could select more than one answer.
Matt Wolfrom, EVP of Cohn & Wolfe, was surprised by how low—compared to banks—insurers fell on the list of most-trusted financial institutions, given the constant headlines around bank failures.
“FDIC has a lot to do with this, but retail banks’ local community presence and high engagement rates with customers are key drivers,” he tells INN. “That said, our survey indicates that there is a desire among consumers for guidance. Insurers who connect with consumers in transparent ways will be rewarded with greater loyalty and business.”
Consumers are confused, distrustful and desperate for guidance due to the blizzard of buzzwords and the impacts following a massive loss of personal wealth, according to Wolfrom.
“Insurers can reconnect with them by increasing transparency, and explaining what they are doing,” he says. “This transparency can be digital through an online presence, or more tangible using local agents as grassroots communicators in the field. The more insurers engage with their customers, the better. This will help educate the market, build trust and grow brand loyalty and ultimately business.”
Insurers aren’t perceived much better oversees. Cohn & Wolfe also asked 852 U.K. consumers to identify the financial services they trusted most. Retail banks were the most trusted type of financial service receiving 59% of the responses. At the other end of the scale, investment brokers (2%), insurance providers (5%), online financial service providers and supermarket retailers (6%) came off worst.
The U.S. survey found that consumer trust in financial institutions has dropped significantly during the past 18 months. Sixty-seven percent of respondents said they had trust in the industry 18 months ago, but four in 10 of respondents said their trust had weakened. Cohn & Wolfe speculates the shift explains why 59% of respondents said they would welcome increased regulation of banks and other financial institutions. (18% said they would “greatly welcome” additional regulation.)
Consumers are the only parties worried about ethical behavior. For the second consecutive year, worries about bribery topped the list of crucial concerns addressed by global corporations, according to a 2008 study conducted by Integrity Interactive Corp., a firm to help global corporations manage and reduce risk of compliance failures.
The results of the 2009 version of its annual study on the Top 12 corporate compliance concerns expressed by global companies revealed an international shift from inward-facing compliance concerns such as financial integrity to outward-focused concerns such as anti-bribery requirements, the leading concern on this year’s list for the second year running.
There were some—not many—positive remarks about financial institutions in the Cohn & Wolfe study:
• “Sympathetic” was selected by 3% of respondents
• “Transparent” was selected by 3%
• “Ethi al” was selected by 5%
• “Honest” was selected by 10%
• “Trustworthy” was selected by 13%
Perhaps some of these responses were from Aflac or Allianz customers. Both insurers were named to Ethisphere’s 2008 World’s Most Ethical Companies ethisphere.com/wme2008 list back in June 2008.
Ethisphere said, “The World’s Most Ethical Companies are the ones that go above and beyond legal minimums, bring about innovative new ideas to expand the public well being, work on reducing their carbon footprint rather than contributing to green washing and won’t be found next to the words ‘Billion Dollar Fine’ in newspaper headlines any time in the near future. These are the companies that stand out among the competition in their industry.”
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