How Can Megabanks Revamp Their Image? Go Back to Basics

The megabanks' mega-image crisis might have been averted had financial firms paid closer attention to a key fundamental of banking: spurring the development and growth of enterprise, the goods and services produced by people in business and all walks of life. Or, the Gross People Product (GPP), to coin a new economic term.

Human enterprise is powered by financial resources and expertise, the high-octane fuel that helps people achieve their goals. Financing combined with the expertise of skillful, knowledgeable bankers has often been a key factor in the growth of business, industries and individuals. As maudlin as this may sound, banks truly can help people in all walks of life accomplish what they set out to do. Such amazing power in the domain of bankers and their balance sheets!

When the business of banking helps create, generate and sustain enterprise, how good is that? It's good business and good PR. As I said in American Banker several years ago, before the financial services business became more complicated than it should be, banks were doing quite well by focusing on the fundamentals of their business. Various banks that are among the largest financial institutions, today, achieved success by supporting enterprise. These banks grew their business the old-fashioned way, before the age of mortgage-backed securities, collateralized debt obligations and other fancy investment vehicles.

While fancy banking generates substantial revenue for financial firms, the level of risk involved is often substantial as well, when, for example, a firm reports billions in trading losses. Without question, risk is unavoidable in banking. But it isn't nearly as extreme and devastating when banking is done the traditional, old-fashioned way, as current events and flagging opinion of banks would suggest.

Let's say you're a megabank CEO going over your daily news briefing. You're likely to stumble across some variation of the following:

This lead paragraph in The Nation: "In the olden days, it used to be that the bad guys robbed the banks. Now it seems the bad guys are running the banks, at least the big ones, and robbing the rest of us."

Or, this in the Huffington Post: "What on earth is a synthetic CDO, you likely ask? It is a side bet on a bunch of side bets on somebody else's debt ... These have absolutely no economic value, aside from enriching the bankers..."

Or this column in American Banker: "Simply put, bankers' reputations ranks just above the tobacco industry's these days..."

This Washington Post headline: "Big banks engaging in payday lending, report says"…Or "Why People Hate the Banks," the headline for a column in the New York Times?

As a megabank CEO, would you prefer to be reading this news, or stories about banks building enterprise and strengthening the economy?

Getting back to fundamentals – the real business of banking – can change our industry's PR paradigm.

Harvey Radin, an independent public relations consultant, was a senior vice president at Bank of America. He also served as head of western region corporate communications and media relations at Bank of America and was a PR consultant for Greater Bay Bancorp and Wachovia Corp.