U.S Banking Industry Facing Reputational Crisis - New Study from American Banker and Reputation Institute
June 26, 2019 - NEW YORK & BOSTON - A lack of consumer confidence in the U.S. banking industry is approaching near-crisis proportions while other industries are enjoying the business benefits of a reputational recovery which eludes many large, regional and non-traditional banks across the country, according to the 9th annual U.S. Banking RepTrak® study from American Banker and Reputation Institute.
The large study, conducted in March and April, considered nearly 13,000 individual ratings from customers and non-customers who were asked for their perspectives on 40 nominated banks drawn from the Federal Reserve’s list of commercial banks. Regional and non-traditional banks included in the study were identified by Reputation Institute, a technology-driven provider of reputation measurement and management services.
While the reputation of large banks among customers went down slightly, large banks have narrowed their reputational gap with regional banks, which in turn continue to lose ground to non-traditional competitors. Exceptions include Citizens Bank, a RI-based regional bank whose efforts to deepen its emotional connection with customers is paying off as the bank jumped 12 spots to become the third most reputable U.S. bank among customers.
Wells Fargo places last among customers and non-customers due to a list of troubles that include a fake-account scandal and a federal inquiry into its purchase of low-income housing credits.
“While other industries have enjoyed a reputation recovery in 2019, the banking industry is struggling to regain reputation equity across all measures,” said Brad Hecht, EVP, Americas, Reputation Institute. “The reputational challenges in U.S. banking is diminishing the level of support banks are able to engender among the general public, irrespective of whether they are a regional, national, or non-traditional bank. In particular, a consumer’s willingness to do business with banks and to give them the benefit of the doubt is most impacted by a decline in reputation.”
The top 10 banks with the best reputation as ranked by bank customers in the 2019 survey are:
- USAA Bank
- Huntington Bancshares (Nasdaq: HBAN)
- Citizens Bank (CFG: NYSE)
- First Citizens Bank (OTCMKTS: FIZN)
- PNC (PNC: NYSE)
- Discover Bank
- Webster Bank (WBS: NYSE)
- Northern Trust (NASDAQ: NTRS)
- Cullen/Frost Bankers, Inc. (NYSE: CFR)
The study from Reputation Institute and American Banker also identifies five keys to reputational recovery for U.S. banks in 2019:
- Corporate responsibility - ethical behavior and societal contributions are the areas that have the biggest room for performance improvements.
- Navigate the political minefield - with 2020 national elections in full swing, banks must walk a tightrope with respect to public policy positions and contentious socio-economic issues in a politically divided country.
- Being prepared in an era of elevated risk - companies that understand the power of reputation perform better in a period defined by increased reputational risks.
- Unlock the influencer potential - seek out the voices of ordinary people with authentic credibility, a community which has an extraordinary influence on reputation.
- Leverage the bank CEO - doing what’s right drives CEO reputation in banking.
About Reputation Institute
Reputation Institute helps leaders at the world’s largest companies build credibility with the people that matter most -- by delivering data-driven insights about how they are truly perceived. We do this with RepTrak®, an unrivaled technology that provides actionable insights encompassing industry, competitors, and company-level analysis. Past and present clients have included Whirlpool, Barnes & Noble, The Estée Lauder Companies, JP Morgan Chase & Co., LEGO, P&G, Cisco, AB inBev and Telefonica, among many others. For more information, please visit www.reputationinstitute.com.
About American Banker
American Banker, a SourceMedia brand, is the essential resource for senior executives in banking and financial services, keeping its users updated on vital developments and focusing sharply on their most important concerns. Financial industry professionals turn to American Banker to stay maximally informed and engage with an authoritative community of analysts, practitioners and innovators through opinion content, research reports, social media, and live events. American Banker Magazine is a monthly print publication of American Banker, focusing on the ideas, the people, and the companies that are changing the way bankers do business.