Crisis communications:Banking and financial

institutions case studies

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Mini crisis: AP reports Wells Fargo execs plan junket to Las

Vegas

Media reports that Wells Fargo & Co which received US$25B in taxpayer bailout money had booked 12 nights at the Wynn Las Vegas and its sister hotel, the Encore Las Vegas.

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• The company initially defended the trip but within hours Capitol Hill investigators, lawmakers and blog commenters had scorned the bank, and the company canceled.

• Rooms at Wynn Las Vegas and Encore are consistently among the most expensive in Las Vegas.

• The trip was to follow an announcement that week that the bank lost more than US$2.3 billion in the last three months of 2008.

Lost Vegas?

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Mini crisis: HSBC breaks interest-free graduate

promise• HSBC offered students an overdraft of up to £1500 for the

first 12 months after leaving university without being charged an incentive to bank with them.

• Under the scheme, the interest-free overdraft would be reduced to £1000 in the second year after graduation, and £500 by the third.

• However, just weeks after students received their degrees, the bank informed them that the interest-free scheme no longer applied

• Graduates were hit with 9.9 per cent interest rate on their overdrafts, which can amount to £149 a year.

• Thousands of customers joined anti-HSBC groups on Facebook in protest and threaten to boycott the bank

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HSBC makes about-turn"Like any service orientated business we are not too big to listen to the needs of our customers. Following the feedback from our graduate account holders, both directly and via the National Union of Students (NUS), we have taken the decision to freeze interest charging on 2007 graduates’ overdrafts up to £1500 and refund any interest charged in August. We are also pleased that we will be working with the NUS to enhance our new account offer so that it fully reflects the needs of recent graduates". Andy Ripley, HSBC’s head of product development

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Do the right thing!

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Case study: DBSAsia’s Safest Bank?

Piyush Gupta, DBS CEO

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DBS ATM fraud timelineJan 4 Some customers informed the bank of unauthorised withdrawals made

in Malaysia through their DBS/POSB ATM/Debit cards.Jan 5 Launches investigation. Deactivates cards, issues replacements, sets

up hotline, offered 24-hr compensation,, pro-actively contacts customers with withdrawals in Malaysia. By 8pm, 200 customers reported losses of about S$1,000 per account.

Jan 6 Holds press conference. Issues statement that investigation points to card skimming operation at 2 ATMs in Bugis St in Nov, ‘11. 400 customers involving S$500,000 affected. Sends SMSes to users with any new ATM transactions in Malaysia. Deployed more staff to call centre, branch. Sends team to check all ATMs for skimming devices.

Jan 11 DBS CEO Piyush Gupta publicly apologizes and regrets anxiety and inconvenience to customers. But added, it could have happened to any bank.

Jan 13 Two suspects arrested with skimming machine in Geylang

Jan 14 New measures announced. Blocks overseas ATM transactions, sets up real-time SMS alerts for withdrawals above a certain threshold.

Jan 19 More cases reported. Fully compensated all 17 affected customers a total of S$23,000 within 24hrs.

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Jan 6 press conference: Tone matters

Lim Sim Seng, DBS Singapore country manager: “Half a million (dollars) against a company that makes about S$7 billion in revenue? I think we can survive.”“….alertness has definitely heightened, not just in DBS but probably in all the banks in Singapore. I think it would be foolish of them to come back to try this again."

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DBS learns to tweet• July 2010. Seven-hour service outage prevented

customers from using ATMs and accessing their accounts online. DBS worked with their back-end vendor IBM to resolve the matter and resume services.

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Good news, get it out fast

Bad news, get it out faster*

*Caveat: Confirm, verify, clarify

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Being pro-active

http://www.ideastorm.com

http://mystarbucksidea.force.com/

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Real-time support on Twitter

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Consider People, Environment, Assets, Reputation • Act quickly, search for details, verify allegations, launch

investigation• Assess allies, call in your experts; notify affected parties,

authorities and higher ups • Quickly share available facts with the public • Show you care, don’t over-react or take it personally• Accept responsibility when you are at fault• Prepare a statement and stand by it; when in doubt, leave

out• Tell the truth and be confident• Simulate crisis: role-play strategies for dealing with crisis

scenarios involving digital media – blogging, social networks, online video, viral emails, rogue websites

Crisis Communications Summary