GETTING IN GEAR 2014 SURVEY OF BANK REPUTATIONS >>>>> ENCOURAGING SIGNS ON THE LONG ROAD BACK TO REPUTATIONAL REDEMPTION

Transcription

1 July 2014

2 AMERICAN BANKER/REPUTATION INSTITUTE 2014 SURVEY OF BANK REPUTATIONS GETTING IN GEAR >>>>> ENCOURAGING SIGNS ON THE LONG ROAD BACK TO REPUTATIONAL REDEMPTION >>> BY HEATHER LANDY WHEN WE BEGAN our annual survey of bank reputations five years ago, we knew we d see signs of a sector in crisis, and not just a financial one. Banks of all sizes and in all geographies were reeling from a widespread breakdown in customer trust. What was interesting to watch in subsequent years was the way nuance returned to the marketplace, as indiscriminate resentment toward banks gave way to more considered views. Each year, one or two institutions would pull away from the pack, proving it was possible to make reputation a positive point of differentiation even as the industry as a whole continued to be viewed more skeptically than just about any other sector of the economy. So it s notable this year that bank reputations once again seem to be moving in lockstep. Only this time, they re marching in a far more favorable direction. There are still winners and losers that stand out, particularly when you ask people about the institutions they directly do business with. But it s telling that with noncustomers, a tougher crowd by far, every one of the 25 large retail bank brands in this year s American Banker/Reputation Institute study fared better than last year. And a dozen brands improved their standing enough to move out of the zone where their scores indicate a weak or vulnerable reputation. When evaluated by their own customers, 18 of the 25 bank brands on this year s survey garner scores of 70 or higher on our 100-point scale, indicating strong or robust reputations. And one institution, BBVA Compass, came within two points of achieving a toptier score of 80 or higher, territory no bank has seen since our survey started in 2010.

3 RANKINGS BASED ON CUSTOMER SCORES Change 1 BBVA Compass Union Bank PNC Ally Bank Comerica Regions Financial Huntington Bank KeyBank TD Bank Bank of the West First Niagara SunTrust Banks BB&T Citizens Bank US Bank Capital One Wells Fargo M&T Bank Citibank Santander BMO Harris Bank Chase Fifth Third Bank Bank of America HSBC RANKINGS BASED ON NONCUSTOMER SCORES Change 1 Huntington Bank TD Bank Bank of the West Comerica PNC Regions Financial BMO Harris Bank BB&T Fifth Third Bank Ally Bank SunTrust Banks BBVA Compass First Niagara Santander US Bank Union Bank Citizens Bank M&T Bank KeyBank Capital One Chase Citibank HSBC Wells Fargo Bank of America Excellent/Top Tier Above 80 Strong/Robust Average/Moderate Weak/Vulnerable Poor/Bottom Tier Below 40 Excellent/Top Tier Above 80 Strong/Robust Average/Moderate Weak/Vulnerable Poor/Bottom Tier Below 40

4 How BAnkS FARE AGAInST other InDUSTRIES Average reputation scores for 2014 vs Average reputation scores for 2014( ) vs. 2013( ) Consumer Products STRonG Transport & Logistics Industrial Products Food - Manufacturing Computer Automotive Retail - General Pharmaceuticals Retail - Food AvERAGE Utilities Financial - Insurance Airlines & Aerospace Financial - Bank Banks move up from weak territory to average strength Telecommunications Energy weak <59 Information & Media Financial - Diversified Source: Reputation Institute SCORE BREAKDOWN Bigger Still Isn t Better Scores from customers Scores from noncustomers Increase from 2013 Excellent/Top Tier Above 80 Strong/Robust Average/Moderate Weak/Vulnerable Poor/Bottom Tier Below 40 LARGE BANKS REGIONAL BANKS NONTRADITIONAL BANKS

5 Another milepost this year: Wells Fargo now finds itself in the company of brands with strong or robust reputational strength, based on the perceptions of the firm s own customers, and another of the big four banks, Citibank, was on the cusp of achieving a similar feat. Both brands, however, are still in a reputationally weak or vulnerable position with noncustomers, as are Bank of America and Chase. On the whole, this year s snapshot shows strong signs that consumer perceptions of the bank sector are on the mend. Credit the passage of time, the careful rebuilding of trust by a chastened industry or maybe just the sheer industriousness of the legal department at JPMorgan Chase the bank entered into a series of multibillion-dollar, headline-grabbing settlements that perhaps contributed to a feeling among consumers still simmering over the financial crisis that justice at long last had been served. In any case, the public s animus toward banks appears to be receding. Compared with other sectors tracked by Reputation Institute, a reputation management consultancy, banks are no longer at the bottom of the barrel, as they have been for the past several years. This year, banks climbed past the media, energy and telecommunications sectors, based on industrywide reputation score averages. Anthony Johndrow, a managing partner at Reputation Institute, says that 2014 might be the turning point for perceptions of the banking industry, with consumers finally giving banks permission to recalibrate the conversation around brand promise and trust. To be sure, most banks have a long way to go; many are still in the weak range among noncustomers, Johndrow says. But we think that people are willing to be receptive to the good things that banks do. Top Banks Perform Well in Key Reputation Dimensions Leadership Citizenship 13.9% Performance 13.2% 14.1% 16.5% Products/Services 16.3% Among Customers Governance 2. Union Bank 3. Comerica Bank 4. Key Bank 5. Ally Bank 12.8% 13.2% Workplace Innovation Leadership Performance 13.6% Citizenship 14.0% 14.7% Products/Services 14.0% 16.6% Governance 12.8% 14.4% Innovation Non-Customer Workplace Top Banks Perform Well in Key Reputation Dimensions Customer 2. PNC 3. Ally Bank 4. Union Bank 5. Regions 2. Union Bank 3. PNC 4. Comerica Bank 5. Ally Bank 2. PNC 3. Comerica Bank 4. Ally Bank 5. Key Bank 1. Union Bank 2. BBVA Compass 3. Key Bank 4. Regions 5. PNC 1. Union Bank 2. BBVA Compass 3. Comerica Bank 5. PNC 5. BB&T 1. Union Bank 2. BBVA Compass 5. PNV 5. US Bank Governance Products Performance Innovation Workplace Citizenship Leadership Among Noncustomers 1. Bank of the West 3. TD Bank 4. Regions 5. First Niagara 1. Huntington 2. Bank of the West 4. Comerica Bank 5. TD Bank 1. Huntington 2. Bank of the West 3. First Niagara 4. TD Bank 5. Regions 1. Ally Bank 4. PNC 5. TD Bank 1. Regions 2. BB&T 3. Santander 4. Comerica Bank 5. TD Bank 1. Santander 4. First Niagara 5. Comerica Bank 1. TD Bank 3. Santander 4. Regions 5. PNC >>> SURVEY METHODOLOGY COMPANY SELECTION: Companies were drawn from the Federal Reserve s list of large commercial banks as of December 2013, with final selections determined by American Banker based on the amount of assets, the amount of deposits and the core business focus of each firm Only companies with significant retail businesses and significant retail brands were considered RATINGS: Ratings were collected via online questionnaire in January and February 2014 Each respondent was familiar or somewhat familiar with the company they rated All companies were rated by at least 100 noncustomers and 100 customers

6 our business, like the community and the shareholders and the employees, around that. EVERYBODY NEEDS TO OWN IT BBVA Compass CEO Manolo Sánchez on reputation management The No. 1 bank on our ranking this year is also one of the most improved. BBVA Compass, which didn t even make the top half in the 2013 ranking, boosted its reputation score more than 12 points with customers. With a score of 78.9 on our 100-point scale, the Spanish-owned southern regional edged out last year s No. 1, Union Bank. The increase is no aberration. Within the past year and a half, BBVA Compass has moved checking and savings accounts to a new technology platform that provides realtime processing and the full scope of each customer s relationship with the bank. It has garnered attention for the sleek, new headquarters tower it opened last June in Houston, been active in social media and raised its profile with NBA basketball, MLS soccer and college football bowl game sponsorships. The tone is set from the top, but CEO Manolo Sánchez says reputation management is everybody s business at the bank whether they engage with customers directly, are charged with monitoring the landscape for risks or are responsible for crafting the brand s message to the broader public. How would you describe BBVA Compass general approach to brand reputation? Reputation is placed at the core of our business. That s why we re focused so much on it. We like to think of ourselves as a customer-centric company, with the other stakeholders in How is reputation management structured at BBVA Compass, and who s accountable for it? In theory you want everybody to own it, but we have strong leadership that steers our reputation management in the right direction. The doer part of it is the corporate responsibility and reputation [group] that Rey Ocañas heads. Then we have the enterprise risk management group, which looks at reputation risks. Both have important, senior roles within the organization. Then everybody else needs to own it, too, and one way we ve been able to do that is by tying reputation to compensation. In our incentive plan, we have a way of attaching [those things]. It s nonnegotiable to really get reputational aspects into the compensation [formulas]. And what is the CEO s role in all this? I need to make sure I m setting the tone for the organization, leading by example. Ultimately when we look to the top of the organization, we want to see that the organization is walking the talk. We have a number of internal mottoes or mantras that we use One of them is, We work for a better future for people. It s very inspiring but also somewhat limitless, and there s nothing about financial services in it. And we set it that way about a decade ago because we really wanted to see no limits. And the word people, it s inclusive of everyone our clients, our employees, our communities. So we re setting this aspiration in very broad terms and we have a culture that is articulated in ways that folks can get engaged around and comprehend the aspirations of the organization. Notably, BBVA Compass is the only bank in our survey to place in the top five for each of the seven reputation drivers we study. Did you have specific aspects of reputation in mind when you were formulating your reputation strategy? Or did you purposefully aim to create a wellrounded profile? There s been plenty of deliberate effort around our position. We have a five-year strategic plan, and when we set it out we made our best effort at hitting all of the vectors that will create, at the end of the day, the next great bank in the U.S. It s a multifaceted goal because banking is a complex business that touches a lot of folks.

7 Our LEED-certified building in Houston, it s open space, which is really a bold step in terms of promoting collaboration and more transparency. There s [our sponsorship of] the NBA. There are the actions that we ve taken, but also the telling of the action, and that s very much connected to today s world. In the age of social media, you really need to tell your story, and that ability to create more touch points to tell our story really helps to reinforce our brand and tell our clients what we re doing. When it comes to noncustomers, who as a group have much less esteem for banks, BBVA Compass gets middleof-the-pack scores, ranking 12 out of 25 on our survey. Do you worry as much about what your noncustomers think? Definitely we worry about that, because those are our prospects, those are our future employees. And those are folks in our community we re not touching. In our case, I think that s what the underlying gap is. We re delivering new solutions, we have actions in the community, but folks who are not our customers have limited exposure to that. We ve tried on Facebook, for example, a campaign where noncustomers could come and submit ideas. [But] we have to find a way to be more persuasive. H.L SourceMedia Inc. and American Banker Magazine. All rights reserved. SourceMedia, One State Street Plaza, New York, N.Y (800)