Financial services and FinTech companies invest considerable effort in defining how they want to be perceived. Yet the reality outside the boardroom can be rather different. Paul Lyon examines the growing gap between corporate identity and external reputation and why understanding that disconnect should be a priority for business leaders.
Sometimes the outside world understands your company perfectly well. It has simply reached a different conclusion.
It is a possibility many corporate leaders would prefer not to contemplate, particularly in financial services and FinTech, where reputation, trust and credibility are fundamental to commercial success. Executives know their businesses intimately, understand the strategy and have invested considerable effort in establishing a distinctive corporate identity. It is therefore understandable that they assume the outside world sees much the same organisation they do.
Yet the company that exists in the minds of its leadership is not necessarily the company recognised by clients, employees, investors, journalists or the wider industry. Having spent more than 25 years working in financial journalism and corporate communications, I have come to believe that one of the most persistent weaknesses in reputation management is the assumption that these perspectives are broadly aligned. Often, they are not.
I call this "The Reputation Gap". Simply put it's the distance between how an organisation understands and presents itself and how it is actually perceived by those whose opinions influence its standing. Some divergence is inevitable. However, when that distance becomes substantial, it can undermine even the most carefully constructed corporate narrative, particularly when management has little understanding of why the discrepancy exists.
The dangers of believing your own story
Corporate identity develops through years of strategic decisions, leadership priorities, commercial achievements and institutional experience. Over time, a particular understanding of the organisation takes hold. It appears in board presentations, investor materials, executive speeches and internal communications. Certain descriptions become so familiar that they are repeated almost without question.
The more frequently an organisation describes itself in a particular way, the easier it becomes to mistake repetition for validation. A FinTech company that consistently refers to itself as a market leader may eventually assume that leadership is universally recognised. A financial institution that places customer-centricity at the heart of its identity may struggle to understand why clients describe their experiences rather differently. Neither necessarily intends to mislead. Rather, the internal narrative has gradually become detached from the external evidence against which it ought to be tested.
I have encountered variations of this throughout my career, first as a financial journalist assessing the claims made by companies seeking coverage, and subsequently as a communications executive advising senior leadership teams. From a journalist's perspective, corporate assertions are propositions requiring scrutiny rather than facts demanding publication. A company's conviction that it is important, distinctive or leading its market is of limited interest without independent evidence. The same principle should apply within corporate communications, although maintaining that independence can be considerably harder when the people making the assertions are also those responsible for your budget.
Notably, the reputation gap is not confined to organisations experiencing difficulties. It can be equally pronounced in successful financial technology businesses, particularly those that have grown rapidly, entered new markets, secured significant investment or undergone organisational change. Internal perceptions may remain anchored in an earlier version of the company, while external stakeholders have developed a different understanding of its strengths and weaknesses. Conversely, an organisation may have made genuine progress in addressing historical problems without recognising that its reputation continues to be shaped by experiences from years earlier.
When corporate ambition becomes corporate assumption
Financial services and FinTech provide particularly interesting examples of this phenomenon. These are sectors in which trust, expertise and credibility are fundamental to commercial success, yet corporate positioning frequently relies on remarkably similar assertions. Companies describe themselves as innovative, transformative, client-focused and committed to delivering market-leading solutions. Read enough corporate websites or executive announcements and the distinctions between organisations that are, commercially and operationally, quite different can become surprisingly difficult to identify.
There is nothing inherently wrong with ambition or with communicating a company's strengths. The difficulty arises when corporate positioning becomes an exercise in describing the organisation as management would like it to be perceived, rather than establishing why external audiences should reasonably reach the same conclusion.
Consider the difference between a financial technology provider claiming to be a market leader and being recognised as one. The former requires little more than a confident statement. The latter depends on demonstrable performance, independent recognition and the judgement of clients and industry participants. Yet organisations can become so accustomed to their preferred descriptions that they stop asking whether those descriptions have any meaning beyond their own walls.
The consequences extend beyond communications. In financial services, where relationships can be longstanding and purchasing decisions involve significant operational and reputational considerations, corporate standing influences commercial opportunities, recruitment, investor confidence and the credibility of senior leadership. If management misunderstands how the organisation is perceived, it risks making strategic decisions based on assumptions that have never been adequately challenged.
A more demanding role for communications
Communications functions are frequently judged by what they produce: media coverage, executive visibility, share of voice, engagement figures and the volume of material distributed through corporate channels. These measures have their uses, and I have spent much of my career working with them. But they tell us relatively little about whether an organisation is understood in the way its leadership intends, still less whether its claims are considered credible.
A FinTech business can enjoy extensive media coverage while remaining poorly understood by the institutions it hopes to serve. Equally, a technology provider with a relatively modest public profile may command considerable respect among the banks, analysts and industry specialists whose opinions matter most to its success. The temptation is to regard greater visibility as evidence of a stronger reputation, when the relationship is considerably more complicated.
The responsibility of a senior communications adviser should therefore extend beyond promoting an agreed corporate narrative. It should include questioning whether that narrative is accurate, distinctive and supported by evidence, while ensuring that external perspectives are properly represented in executive discussions. This can be uncomfortable, particularly when the conclusions challenge assumptions held by senior management. Nevertheless, a communications function that simply reinforces what an organisation already believes about itself risks becoming part of the problem it is supposed to address.
For boards and chief executives, there is a corresponding responsibility to create an environment in which those questions can be asked. If the only information reaching the leadership team confirms its existing assumptions, the organisation is unlikely to recognise a widening reputation gap until the consequences become commercially or reputationally significant.
Ultimately, reputation is not determined by the elegance of a corporate narrative or the confidence with which executives deliver it. It emerges from the accumulated experiences and judgements of people who encounter the organisation, whether as clients, employees, investors or industry peers.
Perhaps the most useful question a leadership team can ask is therefore not whether its corporate story is being communicated effectively, but whether that story bears sufficient resemblance to the organisation that others actually recognise.
The answer may be less reassuring than expected. It may also be considerably more valuable.