Crisis Management: Delivering Bad News At Banks And Keeping Customers: Crisis communications
(Thanks to Alison Tavik, formerly of the Maryland Bankers Association, for help with this.)
So what do you do with bad economic news – especially if you’re a bank?
Before I pass along advice to help banks, as I write this, banks that received taxpayer bailout money must start accounting for how it’s spent. THAT is a serious PR problem. Now to this…
The CEO of a subprime-ravaged bank recently called for help dealing with awful quarterly results while the CEO of an only slightly wounded bank wanted assistance communicating data with minimum alarm. Within those extremes bankers must reassure their many stakeholders and avoid a flight of depositors during this down economy. Their mandate is to maintain and convey safety and soundness. Here’s how.
Designate a crisis leadership team for the duration. These senior managers and/or board members (depending on the severity) will set financial goals, plans to achieve them, and ways to communicate results in synchronicity with FDIC filings. Team goals should include the following:
Show the money and act(especially battered institutions). Demonstrate sufficient capitalization and implement corrections to avoid future self-inflicted wounds. In serious cases banks have been replacing top officers. One eliminated its mortgage team to indicate a strong break with the past.
Reassure staff. Branch staff and particularly tellers have the greatest contact with the public. They must feel secure before they can calm customers. Keep them continually updated. Personally inform them of public announcements even it is only a matter of minutes. Provide copies of external communications and tell them how to handle and redirect media inquiries.
Empower staff. Customers want to know their money is safe and employees should have the tools to reassure them. Repeatedly circulate the latest FDIC protections and how to implement them. Give staff written talking points to explain to customers the safety of insured accounts and Q&A’s to answer questions. All bank messaging should be consistent. Provide the latest state or national bank association data on how depositors’ money has historically remained safe during economic crises.
Establish a feedback loop. Have tellers and branch employees convey customer comments to management. This could be an early warning sign for panic withdrawals. Conversely, it could signal that all is quiet.
Tell your story. In more serious cases, reach out to your biggest customers & stakeholders as early as possible while still in synch with filings. Members of the executive management team should personally contact them to share data, discuss actions taken, and answer questions. Send all other customers & stakeholders a letter signed by the CEO and Chairman of the Board. Strive to have this letter arrive the same day as public announcements.
Designate spokesperson(s). The CEO, CFO and Chairman are the likely designees and should be prepared to handle analyst and media inquiries. Empanel other executives as a “murder board” to cross-examine spokespersons’ ability to answer tough questions and focus their comments. A public relations or communications officer should provide guidance and build talking points.
Increase visibility. Bank executives should manage by walking around. Visit branches and backroom operations to listen and to talk informally about corrective actions. Attend community events. Instead of placing the ubiquitous and thus meaningless “we are fine” print ads, place the ads concentrated on products.
Finally, embrace federal reporting mandates. Consider these quarterly filings as catalysts for maintaining soundness and communicating it to all important audiences.