Reputation and Branding

Last summer I interned at JP Morgan Chase (JPMC). JPMC is an American multinational banking and financial services holding company and the largest bank in the United States by assets. Brand and reputation are two huge concerns that I saw first hand at the bank in order to keep their clients and to bring in the type of clients that they want.

JPMC brands itself as a very conservative and universal bank. Because JP Morgan and Chase merged together, they are not a financial institution that serves various lines of business including investment banking, asset management, private banking, treasury & securities, commercial banking, & retail banking. This universal and global brand is very important for their reputation.

JPMC has a reputation of being very conservative and serving clients who have the same ethics and morals that JPMC has. Because of this reputation, they have to be somewhat picky with their clients so that their reputation does not change. Since JPMC is such a strong bank, regulations are crucial to maintaining their reputation. Any mistake that one employee of the bank makes can ruin the JPMC reputation they have taken years to build. The London Whale is a good example of how a mistake by one trader who worked for JPMC can cause so much damage to JPMC, which is why now more than ever their reputation is very important in managing.

Their brand and reputation is the most significant in order to keep a client’s loyalty. JPMC wants to make sure their client’s trust JPMC and that they do not lose any clients because of bad reputation. I think JPMC is very aware of their reputation and always working on different branding to modify any reputational problems they run into. 

Reputation

Reputation is a vital factor for success. Whether it’s your academic, professional, or social reputation, I believe each are very important. Although it isn’t always great to care about what others think about you, the reality of it is that you have to in order to have a positive reputation. Since I was a sophomore here at the University of Illinois I have been heavily involved in a professional business fraternity. My reputation for this organization has been one of my biggest priorities ever since I was accepted an invitation to join the organization. My reputation developed from my involvement within the organization. I have always had big roles in different committees and made sure to surpass every goal I had for that committee and to portray myself as a professional at all times. My reputation also developed based off of the internship and full time job offers I was receiving. Since members of the organization always found out about the job offers I have received from the Business Career Fair that made my credibility and reputation higher and stronger. It has been a struggle to always try to maintain this reputation because the members of this organization are my peers so staying professional and timely all the time can be stressful. Since I see a lot of the members around campus that is something I also must always think about.

To keep my reputation intact, since I am a senior and have little responsibilities now within the business fraternity, I try my hardest to be a mentor. I offer mock interviews, resume critiques, and just meeting with the younger members of the organization to see if I can help them in any aspect of their professional business careers. Since I am a senior there are a lot of times where I wish I didn’t always have to stress about maintaining this reputation and with I could just “cash it in” but when I think of any of the immediate gains I could receive, none of them are as meaningful as having a positive reputation within this organization. The alumni relations we have are HUGE for our organization and I have been able to see first hand how the alumni’s of my business fraternity have helped various members of the organization with networking, internships, full time job offers, etc. so having a strong reputation will benefit to the success of my career. For example, if there was a job opening at a Financial Institution where an Alumni of my business fraternity is working, I want them to be able to think of me as a good candidate for that job which could possibly lead to an interview. Reputations go a long way in life and I would never want an immediate gain to get in the way of that. 

The Reality of the Principal-Agent Model

While interning a bank this past summer, I noticed a situation that acted more as a triangle, where the agent deals with two different principals. The agent in my example would be a banker of both the client and the bank. What the client wanted the banker to do for them was not always in favor of what the bank allowed or what would benefit the firm. Especially when dealing with pricing and the amount of money they are able to lend a client, it was hard for the banker and client to see eye to eye at times because there are certain things the banker was not allowed to tell the client. Specifically I saw the reactions that a client had when they received the right amount of money they were satisfactory with lending, but the pricing was not in their favor. This created an awkward tension, especially for the banker, since the banker was not the person calculating what that loan should be priced at. The bank has specific calculations and regulations that are set for these types of things and because of that the agent failed to satisfy the client while satisfying the bank. The banker was obviously not going to risk losing his job, which is why the relationship he built with that client is so important. He had to trust that their relationship was strong enough that this type of tension would not push the client away from the bank. Usually when this sort of tension arises, the banker will try to do something else for the client to make up for a price that the client was not happy with. For example maybe the banker would decrease the price on a different line of credit that the client has, create a better amortization schedule, etc.

After working there for 3 months I realized there were many types of ways to master this tension. Each banker had their own personal ways and even within that, clients was treated different. Because being a banker is so focused on relationship management, the ways to resolve the tension are not cookie cutter solutions.