Financial public relations (PR) is an integral part of the strategy for any organization operating within the financial sector. Whether it’s a bank, investment firm, insurance company, or fintech startup, the way financial institutions communicate with the public, investors, and media can directly impact their credibility, reputation, and bottom line. However, PR in the financial world is fraught with complexity, and sometimes campaigns go disastrously wrong. These failures can lead to loss of consumer trust, stock price plummets, regulatory scrutiny, and even long-term damage to a company’s brand.
In this op-ed, we will examine several high-profile examples of failed financial PR campaigns and explore why they failed. By analyzing these failures, we can glean critical lessons about what not to do when managing public relations for a financial institution, and how to avoid common pitfalls that have led to disastrous consequences.
1) Barings Bank – A Cautionary Tale of Overconfidence and Crisis Management Failure
In 1995, Barings Bank, one of the oldest financial institutions in the UK, was brought to its knees by a rogue trader. Nick Leeson, working for the bank in Singapore, was able to accumulate massive losses that ultimately led to the bank’s collapse. The story of Barings Bank is not only a tale of financial disaster but also a PR catastrophe that could have been avoided with better crisis management and communication strategies.
The PR Mistakes: Overconfidence and Misleading Communication
Barings Bank’s PR campaign surrounding the Leeson scandal failed for several key reasons:
- Underestimating the Severity of the Situation: Initially, the bank’s management tried to downplay the seriousness of the situation. Rather than acknowledging the scale of the losses and the breach of security, they portrayed it as a simple mistake that would be swiftly corrected. This strategy only compounded the damage, as the media and public perception began to view the bank’s leadership as out of touch and lacking in transparency.
- Lack of Transparency: One of the primary PR mistakes made by Barings Bank was its reluctance to be fully transparent with investors, regulators, and the public. Instead of openly communicating about the scope of the losses and how they planned to mitigate them, the bank tried to suppress the information. When the full extent of the disaster became public knowledge, the bank’s credibility was shattered.
- Failure to Act Quickly: In times of crisis, it is critical for financial institutions to act swiftly to manage media narratives and reassure stakeholders. Barings Bank failed to engage the media early enough, which allowed rumors and negative coverage to gain traction. Once the story went public, the bank was left scrambling to control the narrative, but by then, it was too late.
Lessons Learned:
- Honesty and transparency are paramount. When financial crises arise, companies must be upfront about the situation, providing accurate and clear information.
- Financial PR needs to be proactive, not reactive. By engaging with the media and stakeholders early on, companies can manage narratives before they spiral out of control.
- Crisis communications should focus on remediation. It’s not enough to simply apologize or offer vague assurances; companies need to communicate a clear action plan for recovery.
2) Volkswagen Emissions Scandal – A Financial PR Disaster Beyond the Automotive Sector
While the Volkswagen emissions scandal (commonly known as “Dieselgate”) was primarily an issue of automotive engineering and ethics, the financial PR implications were enormous. The German carmaker was found to have installed software in its diesel vehicles designed to cheat emissions tests. This was not only a violation of environmental laws but also led to massive financial penalties, a significant drop in stock value, and irreparable damage to the company’s reputation.
The PR Mistakes: Inadequate Crisis Communication and Brand Erosion
Volkswagen’s financial PR campaign failed because of the following critical errors:
- Delay in Acknowledging the Problem: After the scandal broke, Volkswagen initially tried to dismiss the allegations. It was only after significant evidence emerged that the company admitted wrongdoing. This delay in taking responsibility gave the impression that Volkswagen was trying to cover up its actions, further inflaming the crisis.
- Inconsistent Messaging: Once the company admitted to the fraud, its PR efforts were inconsistent. There was no clear, unified message regarding how Volkswagen would remedy the situation, which led to confusion and a lack of confidence in the brand. Instead of offering a comprehensive strategy for how the company would regain trust, the messaging appeared piecemeal and reactive.
- Failure to Address Financial Consequences Immediately: The long-term financial impact of the scandal was massive, with billions of dollars in fines, lawsuits, and recall costs. However, Volkswagen did not immediately address these financial implications in its PR campaigns. For investors and the public, this lack of communication about the scale of financial penalties deepened the perception that the company was out of touch with the seriousness of the situation.
Lessons Learned:
- Timeliness in crisis communication is essential. Delaying the acknowledgment of a scandal can exacerbate damage to a company’s reputation.
- Financial PR must address both public perception and the financial ramifications. Investors and customers need to understand not only how the company will recover but also the financial steps it will take to stabilize.
- A consistent, clear, and action-oriented message is key to rebuilding trust. Financial PR campaigns should not just be about managing a short-term crisis but about creating a long-term recovery strategy.
3) Lehman Brothers – The Collapse of an Icon and a Failed Attempt at PR Recovery
The collapse of Lehman Brothers in 2008 remains one of the most infamous examples of financial failure in modern history. The investment bank’s bankruptcy marked the beginning of the global financial crisis, sending shockwaves through the financial world. Yet, beyond the collapse itself, Lehman Brothers’ attempts at PR recovery after the crisis exposed fundamental flaws in their communication strategy.
The PR Mistakes: Lack of Proactive Communication and Contempt for Public Sentiment
Lehman Brothers’ financial PR failures were particularly notable in the following areas:
- Ignoring Public Sentiment: Lehman Brothers, like many other financial institutions during the 2008 crisis, failed to understand the anger and distrust that the public had towards financial institutions. The bank’s executives did not make sufficient efforts to engage with the public, explain their actions, or offer a transparent view of their finances. Instead, they focused on internal discussions and did not address the growing public concern until it was too late.
- Failure to Build Trust with Stakeholders: In the wake of the crisis, Lehman Brothers’ PR efforts were primarily focused on salvaging the reputation of its executives and senior leadership rather than restoring stakeholder confidence. The lack of a clear, empathetic message that addressed the pain felt by employees, investors, and the general public compounded the damage to the brand.
- Reactive and Uncoordinated Messaging: As the company neared bankruptcy, its PR responses were too little, too late. Lehman Brothers issued statements and press releases that were often contradictory and failed to offer any solutions or confidence-building measures. They did not effectively manage the narrative, and by the time the public understood the depth of the crisis, the damage to the company’s reputation was irreparable.
Lessons Learned:
- Engagement with all stakeholders is crucial. Financial PR must involve not just investors but employees, customers, and the general public. Ignoring one group can lead to long-term harm.
- Proactive PR strategies are necessary to manage crises. Waiting until the situation deteriorates will only make recovery harder.
- Financial PR campaigns must have an empathetic tone. In times of crisis, addressing the emotional and social impact of financial failure is just as important as addressing the technical or financial aspects.
4) Wells Fargo – The Fake Account Scandal and the Erosion of Trust
In 2016, Wells Fargo, one of the largest financial institutions in the United States, was caught up in a scandal involving the creation of millions of fake bank accounts without customers’ knowledge or consent. This scandal not only resulted in massive fines but also significantly tarnished the bank’s reputation. The company’s PR response was widely criticized for failing to restore customer trust and manage the crisis effectively.
The PR Mistakes: Inconsistent Leadership and Lack of Accountability
Wells Fargo’s PR efforts failed for several key reasons:
- Inconsistent Leadership Communication: After the scandal broke, Wells Fargo’s CEO, John Stumpf, was initially slow to take responsibility, and his public statements were viewed as evasive. He ultimately resigned, but the damage to the bank’s image had already been done. The inconsistency in leadership communication led to a lack of confidence in both the company’s ability to resolve the crisis and the authenticity of its leadership.
- Failure to Address the Root Cause: The financial PR campaign failed to communicate how the company was addressing the cultural problems that led to the scandal. Instead of focusing on the root causes—such as pressure to meet sales targets and a toxic corporate culture—the company’s PR efforts focused largely on the technical aspects of the fraud and the financial consequences.
- Lack of a Long-Term Strategy for Rebuilding Trust: Wells Fargo’s PR team did not effectively communicate a long-term strategy for restoring customer trust. The apology and efforts to correct the issue were seen as insufficient, and the company failed to present a clear roadmap for change. As a result, customers remained skeptical of the company’s true commitment to change.
Lessons Learned:
- Leadership communication is essential during a crisis. Leaders should be transparent, accountable, and empathetic to the public’s concerns.
- Addressing the root causes of a crisis is vital. Financial PR should not just focus on the symptoms but on the deeper organizational issues that contributed to the problem.
- A long-term strategy is needed to rebuild trust. Financial institutions must demonstrate through actions that they are committed to change.
Conclusion: The Importance of Transparency, Proactivity, and Accountability
In 2025, the financial sector remains deeply reliant on effective public relations to maintain credibility, manage crises, and sustain long-term success. However, as demonstrated by the examples above, PR campaigns in the financial sector often fail when institutions neglect the core principles of transparency, accountability, and proactivity.
The key lessons from these failed PR campaigns are clear:
- Financial PR must be honest, transparent, and timely.
- In times of crisis, the ability to communicate quickly and clearly is critical.
- Leadership communication should be at the forefront of any PR response, especially in a crisis.
- Financial PR must address both the emotional and technical aspects of a crisis to rebuild trust effectively.
- A long-term strategy is required for recovery, not just short-term damage control.
In the increasingly interconnected and fast-paced world of 2025, financial institutions can no longer afford to rely on outdated PR strategies. The modern PR landscape requires agility, transparency, and a genuine commitment to rebuilding and maintaining trust with all stakeholders. Through these principles, financial institutions can not only weather crises but also emerge stronger in the eyes of the public.
