By DAVID A. CHAUVIN //
The swift downfalls of Silicon Valley Bank and Signature Bank is the single-biggest financial story of 2023 (so far) and one of the biggest since the financial crisis of 15 years ago.
The failure of SVB and Signature – which totaled assets, at their peaks, of $209 billion and $118 billion, respectively – represents the second- and third-largest bank closures in American history, trailing only Washington Mutual’s 2008 closing at the height of the Great Recession.
Plenty of pundits have explained why the banks failed, succinctly and clearly. As EVP of ZE Creative Communications – and as a representative of several community banks –my interest is in the wide-reaching public relations implications of these historic collapses.
The downfall of SVB, because of its size and stature, has fervently grabbed the public’s imagination. If you know anyone with financial concerns, chances are this story has already become a major talking point – and likely upended some planned professional-communications strategies – whether your associates have affiliations with these banks or not.
Finance can be confusing. Terms like “bank runs,” “fixed-income securities” and “liquidity risk” are perhaps not inherently known.
David Chauvin: Out in front.
What people do understand intuitively, however, are terms like “bankruptcy” and “closure.” So, it’s completely understandable when people hear terms like these and see what’s happened with these major banks and wonder if their money, stashed in their local community bank, is safe.
If you represent such banks in times like these, you must be ready to take a hold of your messaging. You must get ahead of potential constituent concerns. And you must communicate – clearly, concisely and consistently – a message of brand strength and reassurance.
Crisis communication isn’t needed only when a crisis directly involves you or your client. It’s paramount anytime a crisis occurs in your or your client’s industry. Sometimes, oftentimes, the public simply doesn’t recognize the distinction.
Public relations professionals must be prepared for this. In our firm, we represent dozens of public school districts and local utilities, and anytime a negative issue involving either of those sectors occurs, we insist our clients be prepared to respond or comment on it.
Right now, banks (and the PR people who represent them) should be counseling clients about the current rush of prominent bank closures and reassuring them that everything is OK.
For a public relations professional, being unprepared is a cardinal sin. If you think a prominent story doesn’t warrant your attention because you don’t have a direct connection to it, think again – the last thing you want is for people to assume your client is part of the problem.
David A. Chauvin is executive vice president of ZE Creative Communications.
