Jeff Judy

Jeff's Thoughts - July 17, 2013

Reputation Risk Lessons from the Tour de France

As I write this, one of the most prestigious sporting events in the world is wrapping up. In a few days, the professional bicycle racers participating in the Tour de France will enter Paris and ride down the Champs-Élysées.

This should be a special year for the Tour, as it is the 100th running of the race. Yet among the people I know who have been enthusiastic fans in the past, faithfully watching daily Tour coverage on television for years, many have completely given up on it.

Even if bicycling interests you very little, you have heard of this event. And what you have heard probably hasn't been good. Past Tours have been notable as much for the riders that were kicked out for doping as for the eventual winners. Again, even if you don't follow bicycling, you know who Lance Armstrong is. He went from the owner of a record seven Tour wins to a disgraced doper, stripped of his victories. Many fans who spent years defending Armstrong against drug charges felt personally betrayed when he confessed to masterminding an elaborate scheme to avoid being caught cheating.

What does this have to do with banking? There are several lessons from the Tour that have fairly direct parallels in our industry:

The big lesson is that reputation goes downhill very quickly, as Armstrong has demonstrated. It goes uphill very slowly, as both the Tour and the banking industry are experiencing today.

It is easy to feel optimistic about banking's future. We aren't exactly back in clover, but the signs of economic recovery are clear. Business is getting better, and will probably get a lot better before it gets worse. Unfortunately, some institutions make the mistake of thinking that since our bad economic past is behind us, our bad reputation must also be behind us.

Just because the economy and the industry are getting healthier doesn't mean that the public, our source of new customers, is any more trusting of industry pronouncements of virtue. We have years of careful work to do, as individual institutions and as an industry.