Financial Crisis Still Weighing Heavy On Wall Street

According to the 2016 Makovsky Wall Street Reputation Study, released today (Sept. 20), the majority of financial professionals surveyed said their companies are still impacted by the 2008 financial crisis.

While it’s been nearly a decade since the financial crisis took place, many financial services companies are still dealing with tarnished reputations as a result of the fallout.

The study revealed that roughly 86 percent of respondents admitted to the perception of their company still being impacted, despite the financial recovery the industry has seen over the last eight years.

“The data makes clear that the financial crisis remains the prism through which Wall Street is viewed and judged,” Doug Hesney, EVP at Makovsky, said in a statement announcing the study findings. “The collapse of Lehman, and all that came afterwards, casts a long shadow over the reputation of the entire financial industry. Despite some headway, it is clear that these institutions must continue to persistently address reputational issues.”

But financial services companies aren’t the only ones carrying the weight of the financial crisis and the resulting recession.

Consumers also continue to feel a loss of trust in the financial industry.

The study found that an increasing percentage of consumers said they have issues with saving and spending since the crisis happened. According to the study, they said they aren’t able to save as much money and now live paycheck-to-paycheck. A third (32 percent) responded that they have had to make spending cutbacks, as compared to 26 percent in 2015.

An overwhelming majority of consumers, 91 percent, said they are still concerned about the chances of a another financial crisis happening in the future.

“Considering the criticism that the financial industry has received, and continues to receive, throughout this election year, it should come as no surprise that many financial services professionals see a long road ahead for reputational improvement,” Hesney explained. “With all the uncertainty over future regulations and changes that may be coming to the industry, it’s likely that institutions will focus on differentiating themselves through improvements to customer service and protection issues.”

Fraud scandals, such as the one big bank Wells Fargo is dealing with, can also serve as barriers to the financial industry building back trust among consumers.

Wells Fargo has been accused of opening some 2 million bogus accounts without customers’ approval or knowledge, all to hit sales targets. The bank agreed to pay a $185 million settlement for the regulatory charges and is now at the center of a class-action lawsuit stemming from the sham accounts scandal. 

The class-action case is being brought by customers accusing the bank of fraud and recklessness. Filed on Friday (Sept. 16) in the U.S. District Court in Utah, the plaintiffs are seeking class-action status for a class of hundreds of thousands of customers across the country.