5 Things Behavioral Psychology Tells Us, And How Bank CEOs Can Leverage It

By Matt Caiola

What happens when you can’t even trust that your money’s in the bank account? This was a massive issue for many tech startups recently, thanks to the closure of Silicon Valley Bank. While the Treasury and Federal Reserve may have stepped in to bail out the bank, many questions remain among startup founders, investors, and venture capital.

With the recent collapse of Silicon Valley Bank, more bank CEOs will be thinking about PR, optics, and what they can do to present themselves as more capable and professional than the competition. Here are five quick ways that CEOs in the financial sector can leverage some age-old psychology tricks to ensure they maintain as much public favor as possible.

Lead With Regret

The CEO of Silicon Valley Bank before this debacle, Greg Becker, is currently under investigation by the Justice Department for selling SVB stock just weeks before its collapse. However, in his video to employees, he understood the importance of leading with regret in a video directed to his team.

He begins this video with the following statement:

While it might sound obvious, bank CEOs should recognize the importance of being honest about their current situation rather than downplaying or dismissing it. Acknowledging and reflecting on past regrets can help you better connect with your customers, clients, and the public.

The Power of Nodding

Why should more financial CEOs nod more? The answer doesn’t have to do with the fact that nodding indicates that you agree with what the other person said. The truth is that nodding, for many people, conveys two things: understanding and consideration. This is extremely important to communicate as a CEO in any industry, but especially in the finance sector.

Believe it or not, there is actual research showing that nodding can raise not only your likeability but also your approachability. Whether you’re conscious of it or not, nodding more during interviews could help viewers relate more to your position or walk away thinking more highly of you than they otherwise would.

Keep It Informal

While Becker and other finance CEOs are probably used to interviewing in expensive suits, this was not how he chose to address his employees. After all, when the public is already looking at you skeptically after a bank failure, the last thing you want to do is give off an air of superiority.

Instead, you want to be relatable. In his video, Becker showed up in a button-down shirt and a dark jacket, with even darker cabinets behind him. The idea is straightforward: bank CEOs should not be calling attention to themselves with formal clothing or bright backgrounds in the wake of a crisis like this. Instead, they should do everything possible to appear warm, informal, and relatable.

This relates to an overall behavioral psychology strategy of “connecting before leading.” The idea here is straightforward: building trust during a PR crisis is more important than projecting strength.

Be Clear and Certain

When crypto exchange FTX imploded recently, Sam Bankman-Fried was still tweeting, getting interviewed, and hopping on Twitter Spaces to clear his name. In several of these instances, it was clear that Bankman-Fried was doing more damage to the situation than anything else. CEOs of financial institutions should be highly cautious about public statements and appearances.

One reason Bankman-Fried’s antics didn’t work was that he couldn’t offer concrete information. Many of his responses to hard-hitting questions were “I don’t know” or “I’m not sure,” and these kinds of answers can often lead you into further crises. These answers evolved into “I was distracted” and, unbelievably, “I didn’t knowingly commit fraud.”

While Sam Bankman-Fried thought this kind of publicity proved he “had nothing to hide,” the truth was that he was a pathological liar responsible for one of the biggest financial frauds in American history. In short, do everything you can to avoid answers like “I don’t know” or “I’m not sure”, always, whether your financial institution is facing a PR crisis or not.

Keep Cool

There is simply no situation in which it looks suitable for a CEO to panic, even though it’s apparent that they should be panicking regarding their company and its position. Even if the entire world knows you’re nervous, it never hurts to prove that you are, in fact, under immense pressure.

Behavioral psychology is beneficial because it helps you identify patterns within yourself, and identifying these patterns can help build emotional fortitude. Without this fortitude, a bank CEO might be furious at the current situation.

This can cause many issues: an angry CEO might take more risks, blame employees when they shouldn’t, or go on tirades that can further destroy the public perception of their financial institution. For these CEOs, it might be worth considering focused breathing, meditation, or just visualizing a relaxing experience.

By using these behavioral psychology strategies, bank CEOs can maintain public favor, build trust, and present themselves as capable and professional during a crisis.

Matt Caiola is Co-CEO of 5WPR, a leading PR agency.