Autumn 2008 will undoubtedly go down in history as a calamitous period for the finance industry, not to mention the global economy. The repercussions of events that unfolded may be felt far and wide, but at their centre were a handful of business brands that had previously occupied the top-tier of the global business hierarchy.

Organisations such as Lehman Brothers, Merrill Lynch, Morgan Stanley and Fortis were global brands with elite client-bases and cast-iron reputations, but all this seemed to change overnight as the credit crunch took hold. Although only Lehmans actually collapsed – at the time of writing at least – the others have had to take drastic action to survive, including changing status or (in the case of Fortis) being nationalised. As a result, although they did not actually go to the wall, their reputations have been dragged through the mud and their brands are consequently bruised and battered.

So could they have handled the situation better and mitigated the damage? Richard Houghton, CEO of Carrot Communications and vice chair of the PRCA, thinks not. “This has been one of the toughest corporate communications challenges you could face,” he says. “There is a perception that the banks should have responded quicker, but I don't think this was possible. The situation was uncontrollable and banks can't shoot from the hip with their communications. Also, the situation was happening in different timezones, starting in Asia and spreading to London and the US. This made it very hard to manage.”

He adds that the situation was complicated further by the involvement of various governments and politicians with their own agendas. From a PR perspective, these factors added up to an overwhelming, fast-moving crisis that would have been beyond the resources of any PR function in the world to deal with.

Damage limitation

The questions that these once mighty financial institutions must now be asking themselves is: how much damage has been done to their brands and what can they do to recover? Perhaps surprisingly, Simon Rowland, head of brand strategy at Uffindell West, suggests the repercussions of September's financial crisis may actually be quite limited. “I'm not sure how much damage [the credit crunch] will cause these banks. Their immediate customers are quite informed and will understand the market conditions.”

He points out that banks in this sector are by definition the only real option for companies seeking certain kinds of financing – for example, for large construction projects – suggesting that even if customers wanted to move, there isn't much of an option. But he does point out the current squeeze will have an impact on customer relationships through its repercussions on the complex derivatives products the banks were using. “The whole market is built on trust, and when the trust goes this type of financing is no longer available. Customers will either have to wait for trust to return or the development of new products.”

Change in tone

As a consequence, Rowland does not expect these banks to attempt to market their way out of the negative impacts. “There's always things they could do, but the question is, do they have the appetite to be proactive?” He suspects not, partly because proactive marketing activity might only serve to make their brands more visible, attracting unwanted attention. As Houghton points out, one of the few banks that has emerged well is HSBC, precisely because it kept its name well out of the headlines. “They were conspicuous by their absence,” he says.

However, Houghton and Rowland agree that the likes of Morgan Stanley and Merrill Lynch must subtly change the manner and tone with which they communicate and in which they are perceived. “If they know what's good for them, they will be more collaborative, more service orientated and more emphathetic,” says Rowland.

“Previously, the big banks could set their own agenda and it will be good for them to be seen as less arrogant and more sympathetic and supportive.” Houghton agrees, saying, “You could summarise this as a need for greater transparency.” He adds that a more subtle change in tack may be a playing down of the US-parentage of such institutions, due to negative associations with the US sub prime market, where the crunch originated.

So whilst we're unlikely to see radical change in how the big banks position themselves, the impact may be quietly fundamental, yet far-reaching. Meanwhile, other industries will be hoping the fallout from the credit crunch is as easy for them to deal with.

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