Metro Bank has had a few issues this year. According to This is Money, it “underestimated the riskiness of property loans”, and so its financial reserves weren’t as “robust” as it expected them to be. The result has been a drop in share prices by 87% over the past 14 months.
When the media started to report on these issues, the news stories were used to share a much more troubling message.
What happened with Metro Bank?
On Saturday 11th May, Sky News reported “the embattled high street lender” was about to seek £350m in new capital from “existing and new investors”. Sky News reported the bank had been “beset by rumours that it is struggling to raise capital”.
One financial analyst, writing in The Motley Fool, described Metro Bank as “stock to avoid”.
Spurred on by the media coverage, people began to WhatsApp each other, sharing worries and spreading rumours that Metro Bank was in trouble. The Daily Mail shared the below WhatsApp message:
As the WhatsApp messages circulated, people started sharing rumours on social media.
Soon, mainstream media started reporting on the rumours and filming branches full of customers.
The bank’s social media team had a busy few days trying to reassure customers there was no need to panic:
And the media started reporting the rumours were fake news. Leading to headlines like this from The Guardian:
Metro Bank released a statement on the situation:
“We’re aware there were increased queries in some stores about safe deposit boxes following false rumours about Metro Bank on social media and messaging apps. There is no truth to these rumours and we want to reassure our customers that there is no reason to be concerned. We’re a profitable bank, rated No 1 for personal current account service by the CMA and committed to serving our 1.7 million customer accounts.”
The power of fake news
The Metro Bank rumour is an excellent example of what it takes for a fake news story to go viral; it’s based on fact.
It’s true that Metro Bank has had certain issues over the past year, and that it is seeking an extra £350m in funding to make up for a shortfall. What isn’t true, is that this means the bank is in trouble.
Stories like this can start from a simple misunderstanding after reading a factual article, or genuine concern after reading a hyperbolic news story on the issue. Well-meaning people then share the news with friends and family who use the bank. (Of course, there will also be a few people in the mix who want to cause panic deliberately, but in my experience, most sharing tends to be done because of genuine concern.)
Memories of the bank runs in 2010 are still fresh in people’s minds, and no one wants their friends, family or themselves to suffer loss because of a bank’s financial issues.
Despite Metro’s excellent reputation for customer care, there’s also clearly a continuing lack of trust in the banking sector as a whole. “What aren’t they telling us?”, some people may wonder.
As we’ve seen with the India lynchings and the violence in Myanmar, the private nature of WhatsApp messages make it easy for rumours to spread like wildfire. By the time brands, organisations and governments become aware of what rumours are being exchanged – they’ve often spread far and wide. People then face the choice of listening to the advice of those whom they know and trust, or of faceless organisations who come in days, weeks or months later to reassure people and provide the facts.
How can brands fight fake news?
Help to create a relationship with consumers that is founded on trust.
Metro Bank’s main advantage here is its customer-centric focus. Yes, people have issues with the bank from time-to-time – it’s impossible to find a bank that doesn’t have a fractious relationship with some of its customers. Overall, Metro Bank has a good reputation for working in people’s best interests. This meant that once the bank spoke, speculation died down. People trusted their voice immediately.
Be honest about any truth behind the rumours.
The most plausible fake news often has a kernel of truth behind it. Has the brand been honest and transparent about any issues that the business is having? If people find out that the brand has hidden something important from them, they may be more likely to believe that “there’s no smoke without fire” and listen to the fake news over statements made by the brand.
Understand that most people are motivated by anxiety, not the desire to attack the brand.
When fake news is circulating about a brand, it can feel like people are out to destroy the business. While there will always be a few troublemakers in any social media storm, most people discussing and sharing the news are doing so out of fear and anxiety. They worry about how they will be affected and how they will cope. Some may be angry at the brand for putting them in a place of uncertainty. These people aren’t setting out to damage the brand, so it’s important not to treat them like the enemy. Instead, try to understand their concerns and work out how you can reassure them that things will be okay with calm factual communication.
Metro Bank had enough brand equity and trust built and managed this crisis well. We have much to learn from the importance of its customer relationships and the importance of its measured yet human response.