Lack of differentiation from the competition and often a lack of relevance, too: These are the biggest problems for many financial companies when it comes to communication and public brand - and their communication departments are only too aware of this. These are the results of an international study conducted by global PR agency Edelman. 2021 offers ideal opportunities to stand out from the competition.
Germans discover the stock market
What investor initiatives have failed to achieve for decades, the lockdown has inadvertently accomplished: Germans are slowly but surely turning away from savings books and start investing in stocks, funds and ETFs instead. As a result, the number of equity investors in Germany has soared. As early as March and April of last year, when the Corona crisis and fears of a global recession led to a sharp drop in share prices, many investors ventured into the stock markets for the first time. Over the course of 2020, the number of equity savers rose by 2.7 million to a total of 12.4 million - an increase of almost 27 percent. This is confirmed by current figures from the Deutsches Aktieninstitut. Young people under 30 in particular have found their way to the stock market. Here, the number of investors increased by 600,000 compared to the previous year, which corresponds to a plus of almost 70 percent. So instead of spending on vacations, leisure activities or shopping, many Germans were putting their money into stocks, funds or ETFs - and this trend is likely to continue.
Financial service providers should be in high spirits. New customer groups are seeking out opportunities to invest their savings far away from the savings account. But in the communications departments of financial companies, disillusionment dominates: Instead of winning over those willing to invest with clear messages and exciting insights, almost interchangeable content continues to be communicated for the most part - much of which the communicators themselves find hardly interesting. These are the findings of an Edelman survey amongst forty of our international financial clients, including some of the world's largest asset managers, wealth managers, banks, insurance companies and consumer finance firms. Two-thirds of respondents are aware of the disconnect between what their company wants to communicate and what interests the media and customers. Whether CCO, Head of Communications or senior communications manager, they all agree that more differentiation and relevance are needed. 78 percent even see it as their greatest challenge to make their company stand out from the competition with a view to communications, especially when it comes to products and services.
All eyes on sustainability and ESG
However, 2021 offers the ideal opportunity to overcome this challenge, because one topic will dominate the industry more than ever - sustainability and ESG. For companies, this means they have to position themselves successfully here, with their products as well as with their communications, in order to stand out from the crowd of providers at all. After all, the topic of sustainability is close to the nation’s hearts: According to the Allensbach Institute for Public Opinion Research, 53 percent of 30-59 year-olds are currently very concerned about global warming. And this is reflected in recent investment behaviour. According to the BVI, sustainable products already accounted for almost half of all new business in retail funds last year - and rising. In addition to investor interest, the EU Sustainable Finance Disclosure Regulation is also keeping communications departments busy with the topic of ESG. The importance is clear to communicators: according to the Edelman survey, 98 percent consider the topic of ESG to be very important, and 83 percent consequently also plan to communicate more in this area.
Nevertheless, for only 15 percent of companies is demonstrating their commitment to climate change a top priority in their communications. The Corona virus and the economic consequences of the pandemic outrank the environment for most PR departments. Presenting how one's own company is positioned in the context of the economic recovery, or how it is contributing to this recovery, is the main concern for 45 percent of respondents this year. 15 percent would rather push product innovations and other innovations in 2021, and the same percentage of companies is giving priority to appealing to young people. They want to focus their communications on remaining relevant to younger customer groups and securing their attention despite disruptive developments and competitors in their industry. 10 percent said they want to focus their communications on justifying high fees in difficult market conditions.
Promote importance of communications internally
But for PR departments to successfully communicate their focus topics in 2021, they need to move away from uniform content that doesn't resonate with journalists or clients. However, nearly two-thirds of respondents to the Edelman survey struggle to generate newsworthy content internally. And that's not surprising - in only about half of companies does top management see the importance of putting themselves out there and is willing to set aside time to do so. Yet the role of the CEO in creating trust, in positioning and in building a brand should not be underestimated, as the Edelman Trust Barometer finds every year. One thing is clear: communication is often given too little importance internally.
Focusing on true thought leadership, CEO positioning and social media - these are the ways out of the gray communications wastelands, and that's how 95 percent of PR managers see it, too. In order to be able to implement these measures successfully, one thing above all is necessary: a change in thinking in the companies - not only commitment and involvement from the top management are essential, but also understanding on the part of the internal content suppliers from the specialist departments. Public relations is not a chore, but the topping on the cake. The most important question to ask is "What are clients interested in?" and not "What do we want to talk about?".
Finance companies need to commit to social media
In addition, financial companies should finally truly embrace the topic of social media. An alibi LinkedIn account on which press releases are published is not a social media strategy. It may seem that companies from the consumer-goods sector have it easier, but even with complex topics is it possible to reach your target groups on Instagram, Twitter and Co., if you choose the right approach. Even if 100% of communicators still consider traditional media to be highly relevant, they are aware that it is by no means only the young new investors who are out and about in the digital sphere, investing their money via mobile phone and app.
And lastly, it is important to act quickly and decisively. After all, when the lockdown ends and open borders, shops and restaurants encourage people to spend money again, it is important to already be firmly established in investors' minds. Sufficient funds should be available to drive the necessary changes and new ESG communications. After all, 33 percent of the communications departments surveyed were pleased to see their budgets increase this year.