The crisis that engulfed the regional banking sector for weeks can be chalked up to two core failures – one operational, and one rooted in communication. Ultimately, it was operational mismanagement that caused SVB to fail, but their communication missteps shouldn’t get a pass either. “From all accounts, what doomed Silicon Valley Bank wasn’t just that it lost some money on securities,” according to Fast Company. “It was that it revealed these losses via a press release so poorly timed and triple-stuffed with confusing jargon that it led everyone to believe a viral rumor that the bank was doomed.”
What’s most unfortunate about the banking failures of 2023 is that community and regional banks – the vast majority of which have sound money management and solid business practices – got dragged down by a few bad actors. The reverberations caused an acute, albeit short-term, crisis of confidence across the entire banking sector, threatening the health of the economy at large. The core lesson for banking industry leaders from this crisis? Even when your financial institution has done nothing wrong, you must be ready to respond.
But fear not, crisis communication planning need not be arduous to be effective. To help ensure financial institutions are prepared to communicate before the next crisis comes, we’ve rounded up the following core considerations in crisis communications planning.
1) Silence is Not a Strategy
Immediately following the SVB failure and the subsequent days, some banks chose to stand back and wait to see what would happen, hoping the crisis would blow over, while others stepped forward to meet the moment. The bottom line is that customers want to hear from their banks during uncertain times. Even if an institution has nothing to do with the crisis at hand, they have an obligation to their customers, employees and community. How they speak up will vary by institution, but leaders should communicate with clarity, frequency and appropriate breadth and depth.
2) Designate a Core Communications Team
Who hasn’t seen an untrained representative on the hot seat for their company in the midst of a crisis? The internet is full of examples of executives thrown in front of the cameras intending to make a situation better, only to make it worse instead. That’s because they either weren’t the right level of spokesperson or they didn’t have the right training. The best companies use high-level, media trained executives to speak on behalf of their organizations or author corporate communications. These leaders are comfortable, confident, and flexible communicators, who thrive when the stakes are high.
3) Game Out Crisis Communications Scenarios
Knowing leaders that are trained and ready to respond is one thing. Knowing that an institution has planned out what it will do or say should certain scenarios happen is even better. While communications professionals alone can’t be expected to predict every situation that could impact them, bringing together stakeholders from across the institution will help surface industry and institutional risks. These organization-wide crisis communications planning sessions should happen at least yearly to ensure readiness for evolving situations and scenarios.
For more information on core communications programs for financial institutions or to speak with one of our experts, contact us at email@example.com. Stay tuned to Adrenaline’s Insights channel for more branding best practices. Be sure to also stay tuned in to Believe in Banking as it highlights industry news and views for banking leaders.
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