The response to a crisis can be more hotly discussed than the reason it came about
Emma Woollcott, Legal Director of Mishcon de Reya Solicitors, says banks must plan early and practice how they will respond to reputational disasters to sucessfully rebuild their public image.
Many banks went recently through a series of scandals. What should they have done to prepare their clients for the bad news?
It is all about preparation. In a climate where the media and the public are quick to criticise ‘non-vanilla’ banking arrangements – even where there is no question that they are lawful – banks must consider and advise early on how their clients might justify their financial affairs.
Banking scandals regularly arise from data thefts and cyber-attacks, the risk of which may be reduced greatly by strategic planning and specialist security advice. Where leaks occur, the bank’s response must be quick, but also intelligent and well-considered. The public’s demands for information, and customers’ demands for reassurance, must be balanced by the need to thoroughly investigate and understand how the situation arose, and whether there are further risks to the security of customer data.
What do they do now to rebuild their reputation?
Often the response to a crisis situation is more hotly discussed that the reason it came about. Banks must plan early and practice how they will respond to reputational disasters. Crisis simulations are now a routine part of corporate reputation and brand protection in many industries, but banks are often slow to embrace exercises which necessarily involve sharp focus on areas of potential vulnerability. However, by shining a spotlight on such issues, and practicing responses in a safe environment, banks can be more confident that if (or when) they are faced with a real-life reputational crisis they would be able to deal with it effectively.