Ongoing reputation and customer satisfaction issues caused nearly half (44 per cent) of financial services firms to lose 5 per cent or more business in the past year, according to the 2013 Makovsky Wall Street Reputation Study.

“Almost five years later, the financial crisis has transformed into a reputation crisis for financial services firms and there is still a long road back to recovery,” said Scott Tangney, executive vice president at Makovsky, the communications firm. 

But according to 60 per cent of marketing and communications executives, it could take as long as five years to restore damaged reputations back to 2007 levels, Tangney said. “Only about one quarter of financial services firms told us that their corporate reputation has already been completely restored to pre-financial crisis levels.”

Makovsky said that losses, based on total sales of these companies, are estimated at “hundreds of millions of dollars,” with an average business loss of 9 per cent among all firms surveyed.

“Financial services companies now see the number one reputation challenge for the next year to be differentiating themselves from competitors saddled with significant negative perception issues,” Tangney added. “Marketing and communications executives are struggling with internal issues too, as they told us the biggest obstacle to a stronger reputation is their company’s lack of commitment to devoting the time and resources necessary to rebuilding it.”

Among other significant findings, only 18 per of firms reported communications and marketing programs to be “very effective” in improving perception, while, according to 56 per cent, they have been “somewhat” effective.

Tangney highlighted that whereas today public perception and management actions are key, just a year ago operational issues and market challenges impacted the standing of these companies.

In terms of the main factors affecting reputation, customer satisfaction emerged as “very important,” as cited by 82 per cent of survey participants. This was followed by financial performance and/or shareholder value, at 71 per cent, and strong brand, at 69 per cent.

“This represents a shift from last year’s study, where the top factors were strong brand, corporate governance and innovation, respectively,” the firm said.

The survey was conducted online by Echo Research in May 2013; a total of 151 executives and managers responsible for the management and supervision of communications, investor relations/marketing at large- and mid-sized publicly-traded and private financial services firms.