Hit by Fraud? Crisis Communications Lessons from the Trenches

February 1, 2017 CO-OP Financial Services

Did you know that it was Ben Franklin who said “in this world, nothing can be said to be certain, except death and taxes”?

If the great, wise Mr. Franklin lived today, he might have added financial fraud to the short list of life’s certainties.

Unfortunately, in today’s digital economy, the brilliant technology advances that opened the doors to sophistication and convenience in the financial services industry, also unlocked the opportunity for criminals to lift billions of dollars annually from financial institutions and their customers.

With record numbers of data breaches occurring every year, it’s inevitable every organization in the financial services industry will be faced with the trying time when they must address their customers about the occurrence of fraud.

It is in this situation that another of Ben Franklin’s famous sayings lends wisdom and guidance: “By failing to prepare, you are preparing to fail.”

When fraud happens, financial organizations automatically and immediately undertake the critical operational steps to create stop-gaps and mitigate damage. But, we are all learning that we can’t overlook the importance of a well-planned and attentively prepared communications response in combatting the fallout of the attack. Communication is critical, because it greatly impacts one of a financial institution’s most valuable assets – its reputation.

When fraud happens, our industry is coming to understand a new golden rule:  What we say is as important as what we do.

As we tackle the myriad of challenges associated with fraud, a new paradigm for customer communications is emerging. Many financial services organizations are beginning to institutionalize three critical practices to preserve reputation in response to the rising incidence of fraud in our industry:

  1. Plan fraud response communications before the fraud occurs: We should not wait for a fraud incident to address how to communicate. Time will not be on anyone’s side. Beyond having a general crisis communication methodology in place, financial organizations can pre-plan a potential response specifically for a fraud situation. Doing so gives us the ability to gain alignment around how to address our customers. For example, we can create fraud scenario draft documents, and for credit unions those may include a statement to members, general messages about how the credit union is handling the fraud situation and a potential FAQ that answers the tough questions members will undoubtedly ask. These materials can then be updated quickly with specifics for the actual fraud incident.
  1. Act Fast and Be Responsive: Immediately upon learning of a fraud attack, we must assess the facts and strategize quick-response communications, even if it is only to let affected customers know we are aggressively working to address the situation and determine a course of action. Then, we must communicate that course of action to let customers know how we are helping them as quickly as possible. Demonstration of expedience and concern in resolving the issue is an investment in positive perception of the organization as a trusted partner.

In addition, we are all learning that we must address concerns and questions head-on, with appropriate and truthful transparency. The organization’s character and reputation are on the line. We must remember that not communicating the facts can cause hearsay and speculation to escalate into negative perception. Also, we must ensure we communicate to all audiences who can impact the organization’s reputation. While a need-to-know approach targeting affected customers may be the right plan initially, ongoing chatter and hearsay may change that dynamic. Some stakeholders may not be directly affected, but they can shape other’s perception. When in doubt, a crisis communications counselor can help navigate the myriad of audiences, messages and strategies to communicate effectively.

  1. Show empathy and take responsibility throughout the duration of the fraud crisis: Amid the deep angst of a fraud situation, customers want to know that financial services organization’s empathize with the impact fraud has had on their lives and that we are taking responsibility for helping them navigate solutions. We must all understand that taking responsibility for the situation is not the same as accepting blame for criminal activity. However, the tone of communications should always convey deep concern for our customers’ situations and shared responsibility for resolution.

When a crisis occurs, it’s often not resolved after a single outreach, and communication needs change throughout the duration of the event. We must ensure communications adapt to the evolving climate by continually monitoring what’s being said about the organization to determine immediate, short-term and long-term plans. After the issue has been resolved, the final action should be to understand how the organization’s performance resonated with customers. Surveys will reveal whether the organization needs to address any reputational damage that has occurred.

A Final Word from Ben Franklin

It takes many good deeds to build a good reputation, and only one bad one to lose it,” said Franklin.

How financial services organizations communicate after a fraud attack can be the good deeds that protect against the bad deed of criminal behavior. While the financial services industry will never be able to completely control fraud, every organization can control how they impact the outcome with good communication practices that build member trust and a strong reputation for customer care.

For more on fighting fraud, follow @COOPFraudBuzz on Twitter and join the next FraudBuzz Webinar on Thursday, February 16, at 11 a.m. PST/2 p.m. EST. To register: http://www.co-opfs.org/fraudbuzzwebinar/

The post Hit by Fraud? Crisis Communications Lessons from the Trenches appeared first on Insight Vault.

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