The Bankwatch

Tracking the consumer evolution of financial services

Banks need to catch up with public opinion

When the American Banker “Banker of the Year” awards came out in October, I admit I was a bit leery about it, and after I realised there were several awards, I stopped watching.   In the meantime and with the passage of time, government bailouts have become the top story in banking, and we all moved on.

So I was a little caught of guard that the awards dinner and acceptance speeches were held just last night. So I took out my temperature gauge to see how hot or cold this story was – surprise surprise – huge PR blunder according to the twitterverse.


dmgerbino: @rshevlin I agree with you. AB Banker of the Year should have been cancelled.
FTAlphaville: Further reading: Elsewhere on Friday, – Banker of the year? This year? – Missed Manners: Black.. (expand)
talkingbiznews: Is American Banker safe with picking a banker of the year? (expand)

Relevance to Bankwatch:

These are fast moving times, and the speed will just get faster.  Everyone needs a personal  dashboard screenshot-51to continuously monitor their brand and be able to instantly respond, comment, and actively participate.  This conversation keeps your finger on the temperature and allows shifts in strategy to be considered equally quickly.  Obama managed this perfectly.

As a practical matter I understand the dinner was planned a long time ago, but there are ways to soften the impact – even rename the dinner just for this year.  It can hardly be expected that anyone in the general public will accept bankers celebrating, any more than they accepted the car chiefs showing up in Washington in $20 million dollar jets.

Certainly there is apparent contrition amongst some.  U.S. Bancorp chairman emeritus Jerry Grundhofermade used his acceptance speech to layout actions bankers must take.  This is the right message.

  1. That the banks that accepted money from the Troubled Assets Relief Program, or TARP, would pay the government back as soon as possible and fully to maturity.
  2. That the “politicization” of the financial industry won’t cause young men and women from going into, or staying in, banking.
  3. That banks will pay more attention to their costs. “Banking is a commodity business where cutting costs is critical,” Grundhofer urged.
  4. That bankers start to understand that banking is a very difficult business. “If you collect 99% of your loans, you are an average bank. If you collect 99.5% of your loans, you are a value-added bank. And if you collect 98.5% of your loans, you will find [FDIC chairman] Sheila Bair on your doorstep.”
  5. That the banking industry puts better credit systems in place. “Here, here!” yelled an excited attendee in agreement.

There is an opportunity for the industry to catch up with public opinion, because it will never slow down.

Written by Colin Henderson

December 5, 2008 at 16:05

Posted in Uncategorized

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