2015 for financial communicators: goodwill returns but challenges remain

09/01/2015

Charlie Ansdell

Seven years after the financial crisis shocked markets, economic recovery still dominates media debate.

March 2015 marks six years since interest rates reached their historic 0.5%; UK debt remains at historic highs.

While opprobrium against banks and the financial service sector remains, some companies are winning back trust.

So what does 2015’s crystal ball hold for financial services communicators?

Political uncertainty presents new threats

The rise of UKIP/ SNP makes the 2015 UK general election the hardest to call in a generation.  Most parties are, however, unified on the need for financial services reform. 

Populist measures – executive pay, the financial transaction tax, FCA fines and competition investigations – risk turning financial institutions into political footballs.

Companies need to carefully develop their policy responses - and should be acutely aware to appear apolitical.

Greek elections will likely further strain the Eurozone.  Volatile markets and jittery consumers will challenge crisis communicators should problems resurface.

Regulation, regulation, regulation

2014’s dominant theme for financial institutions will continue in 2015.

Global regulators are still working out how to manage systemic risk and "too big to fail" institutions.  A raft of proposed reforms could impact businesses – increased capital and liquidity requirements, special resolution mechanisms, concentration caps and breaking up banks.

Scrutiny will fall on bankers’ pay in the first quarter bonus season, driving debate on bonus structures/ limits and clawbacks.

Sanctions may be an issue, as governments seek to recoup financial crisis costs; expect further regulatory and competition investigations.  Companies must ensure their views are represented in consultations for proposed UK and European legislation.

With elections imminent, pensions or tax reforms could further transform the landscape for financial institutions.

Economy class

Significant economic changes will shift the news agenda in 2015.

Plummeting oil prices, following OPEC’s focus on market share, mean shocks for oil exporters.  On the flip side, consumers/ savers will enjoy falling inflation, as petrol and food prices fall.

Currency volatility will remain as central banks reflate economies with QE;  the Eurozone may join the QE club as deflation looms, with US QE exit strengthening the greenback.

QE exit could dampen potential asset bubbles.  A flat FTSE and flattening London house prices look probable; stable asset prices may widen DB pension deficits.

As banks repair balance sheets in election year, they will face pressure to increase lending to SMEs and first time buyers.

Brave new digital world

Technology will continue to change the way we communicate, enabling direct and social communication with clients.

New FCA rules on social media make financial promotions challenging, but Twitter will be an important tool for general and service communications.

Facebook use is declining rapidly in under 25s; instant media like Snapchat present new opportunities but challenges for communicators. 

Internal communicators face dispersed sales forces and employees bringing their own devices to work, requiring new technology to communicate and effectively with employees.

While new media gives communicators new ways to communicate, content and message will remain critical.

Content reigns

Changes in Google’s SEO algorithm in late 2014 continued to link search effectiveness to content.  Companies increasingly curate their own content, mixing their content with media and stakeholder relations programmes. 

High quality content is an important differentiator in a crowded market, driving companies to build thought leadership and content delivery capabilities.  Fund manager or economist insight, along with the big data of banks and insurers, can provide rich sources of content.

Diverse content makes it hard to provide unity of messaging and purpose.  Expect more corporate storytelling as financial institutions seek to weave together content to create strong, compelling narratives.

Demonstrating leadership

Cynical audiences, coupled with the ubiquitous, intrusive nature of modern media, mean it’s not enough to just talk the talk.  The world of smartphones, CCTV and social media merges private lives and public personas.

Modern audiences demand sincerity from companies and their directors.  They demand fairness in good times, and transparency in bad.  They demand that companies act in customers’ interests above their own.  Moreover, they demand that companies show leadership. 

The companies that demonstrate their leadership – in their ethics, in their products and services and in their communications – can prosper in an exciting and challenging 2015.