It’s now seven years since the global financial meltdown that hit in 2008, a catastrophic crisis in the world economy that was, in part at least, a direct result of irresponsibility and a flagrant bending- if not breaking- of the rules in the hunt for greater profits on the part of the institutions at the centre of the monetary system.
So, what have we learnt?
Well, for one thing, PR success is impossible if the public no longer trust you. Almost a decade on and major high street banks like HBOS and RBS are still viewed with suspicion because taxpayers not only bailed them out, but then found themselves funding massive bonuses for the bosses at the top, despite the businesses being classed as failing. Meanwhile, the title ‘banker’ is now seen as negatively as ‘politician’, ‘estate agent’, and ‘journalist’.
In fact, according to this slideshow by the Telegraph, just 11 per cent of the UK population say they trust bankers, journalists fare even worse (7 per cent), and politicians match that figure. And they all share one thing in common; very public scandals that have served to discredit, either in part or almost entirely, what they do for a living.
We could go one step further still, and state that not only have their respective industries suffered embarrassment and humiliation at the hands of revelations- from phone hacking to broken policy promises- those revelations, once exposed, were initially met with lies, misdirection and misinformation in the hope of whitewashing and walking away without so much as a slap on the wrist for crimes and misdemeanours.
None of which is saying anything new, or telling anyone what they didn’t already know- including those who work in banks, write for newspapers, and debate issues in the Houses of Parliament. With that in mind, it defies belief that the largest of Britain’s banks could display such a lack of transparency when it comes to dealings that have gone on to make headlines and cause firestorms.
HSBC’s Swiss subsidiary appears to have helped thousands of private clients avoid paying their dues in tax to HMRC. That’s bad enough for the brand’s reputation, but to make matters worse, the response wasn’t particularly forthcoming until this weekend. It took almost a week for a formal apology to be issued on the part of the Chief Executive, which appeared in several papers on Sunday. Realistically this should have been one of the first reactions, issued as an attempt to show that the news was being taken seriously the moment it broke.
Of course, the accusations are based on historical dealings, but that’s not really the point. Even if the entire financial sector wasn’t already blighted by bad public feeling following that near-bankruptcy of the planet- a nightmare scenario we are still dealing with by way of widespread austerity measures- and even if those that need to be held accountable are no longer at the firm, an apology and promise to assist in any and all investigations should have been given when those first front pages hit newsstands.
It’s really just the tip of the iceberg, too. The scandal focuses on a complex way of ensuring wealthy clients don’t have to pay as much as they technically should to the government, and this is only possible with the presence of a shrubbery maze- a place where eyes are diverted rather than allowed to focus on what’s actually happening.
And this is before we even mention the money laundering nightmare the brand found itself in just a couple of years ago. HSBC, news agencies told us at the time, was every drug dealer’s bank of choice, but, even after admitting trading with South American cartels, breaking several key banking laws in the process, walked away with nothing more than a fine from Washington that amounted to around five weeks’ worth of profit.
It all points to a complete lack of transparency as to what is happening within the ivory tower- from tax avoidance here in the UK, to the U.S. government letting the company off a major crime (a decision best described as ‘shady’). And as we have said on these blog pages time and time again, the worst brand behaviour to exhibit is a lack of transparency. It gives the public very little faith in the company, especially when that lack of transparency continues after the accusations begin.
We can compare this firestorm to the innumerable occasions wherein the fit hits the shan on social media, and mistakes are made that land firms in hot water. The priority then needs to be an immediate retraction and a heartfelt message of ‘sorry’, rather than radio silence that’s only broken when the story escalates over the course of several days, and pressure to speak frankly becomes impossible to ignore.
You may not be one of the world’s biggest banks, but nevertheless this is a sharp lesson in responding to the public and press every company, in every sector, needs to acknowledge. Not least if we take into account HSBC’s falling share prices.