10 Years After…How the Financial Crisis Changed Financial Communications

The global economic meltdown in 2008 did more than eliminate five million jobs, force nine million homes into foreclosure and precipitate deep reflection in many board rooms and executive suites. It also spurred dramatic changes in the role financial communications has played in the decade since—and will play in the next inevitable downturn.

The crisis forced brands and organizations to reevaluate the value they were placing on financial communications, and in turn boosted the demand for critical thinking about challenges and opportunities. It also expanded the aperture for getting their message out and cultivating new audiences and constituencies.

Here are four significant ways the crisis has impacted financial communications:

  1. RISE OF CREDIBLE THIRD_PARTY PUNDITS/INFLUENCERS AND INVESTIGATIVE JOURNALISTS. The financial crisis spawned a new cohort of third-party pundits and influencers who have a lot of clout when it comes to interpreting economic news and handicapping the players. The financial crisis also led to a surge in the resources devoted to investigative financial journalism, whose impact is fueled by social media proliferation and by the rise of global collectives of investigative reporters. These dynamics place a premium on communicators who know how to manage relationships with reporters and editors in investigative units as well as the commentators and influencers who can determine how news get interpreted.
  2. COMPLIANCE TAKES A SEAT AT THE COMMUNICATIONS TABLE. With a much sharper emphasis on risk assessment and management among boards and senior executives, compliance is now working hand-in-glove with financial communications to develop messaging strategies for shareholders, regulators and other key constituencies. Communicating with these groups effectively and on a regular basis is vital for organizations that want to improve their reputations and establish a track record of accountability. Getting communicators to working collaboratively with compliance has been a process, and not one without hiccups and tensions. But it has yielded the opportunity for organizations to tell more compelling stories to the marketplace that don’t create issues with regulators and other watchdog stakeholders. It has also helped ensure that nothing gets lost in the translation.
  3. BROKEN SOCIAL CONTRACT BETWEEN EMPLOYERS AND EMPLOYEES. The financial crisis had a profound and lasting impact on workplaces and the way companies communicate with employees. A generation of professionals experienced being laid off or saw friends and family members lose their jobs and/or experience wage and bonus stagnation. The social contract that said if you do a good job and are loyal to the organization you will rewarded with upward career and economic mobility was broken. This undermined the credibility of employers, and taught employees that no one else would look out for their best interests. A key part of communications strategies following the financial crisis was helping organizations calm employees unnerved by the meltdown and concerned about waves of layoffs. Employee communications has since been upgraded as a priority and given the resources to be a real asset in attracting and retaining the best talent. At the same time, there is a recognition that whether in good times or bad, corporate loyalty is no longer a given, and employees are commonly a source of media leaks and social channel comments that are harmful to their employers.
  4. STORYTELLING ROARS BACK. One need only look as far as the rise of The Moth, StoryCorps, Ted Talks and nearly endless podcast channels to see that our passion for a story well told has returned and emerged as a powerful tool in the communications wheelhouse. The financial crisis was the source of many stories of pain and suffering, as well as tales of triumph over difficult circumstances. These stories were often most impactful when they humanized the teller, making him or her relatable to the audience, and when they impart a lesson you could apply to business or life. Financial communications now employs this appetite for storytelling to achieve goals ranging from encouraging planning for retirement to making sense of arcane technology advancements for shareholders.

The financial crisis sparked a realization that organizations needed to strengthen existing relationships, cultivate new ones and raise positive brand awareness. The toolkit of financial communications strategies that was created to address this need will also help companies navigate through the next recession and make sure their reputation is preserved.

– Alex Stanton

This article originally published on LinkedIn’s as part of their series on the 10-year anniversary of the financial crisis. 

2019-02-21T12:35:03+00:00 September 13th, 2018|Categories: Newsroom|Tags: , , |