Revelation of decades-long data access for reporters creates reputation crisis
While Bloomberg‘s data terminals, which serve up volumes of intricately detailed financial information to Wall Street pros on a daily basis, have enjoyed a reputation as must-have tools, a privacy breach scandal has landed the company in a threatening crisis.
Last week, it was revealed that Bloomberg reporters have had special access to data on how customers used their terminals for DECADES, and actively sought to use it in order to break stories first. Customers ranging from JPMorgan and Goldman Sachs to the U.S. Federal Reserve have all expressed extreme dismay, and the legal letters demanding further information are already starting to pour in.
CNBC’s Jeff Cox discussed the situation with Bernstein Crisis Management president Jonathan Bernstein, who offered up these insights:
“There are very few things a company can do wrong that are worse than a breach of customer confidentiality,” he said. “Trust in the organization that underlines its reputation is their most important asset.”
“You have to do more than just apologize. You’re going to have to engage in a campaign of transparency and consistency before people are going to trust you again,” he said. “There are other ways to get that data (on the terminals), and I would guess now that some companies are going to find other ways to do it.”
To its credit, Bloomberg is headed in the right direction with its crisis management thus far. The organization has not only appointed an inside executive to the newly-minted position of “Internal Client Data Compliance Officer,” but it has also brought independent advisors into the fold, upping the level, or at least appearance of, transparency. Reports also state that Bloomberg reached out to hundreds of clients directly to both apologize and reinforce the message that the problem will be rectified, a wise move given the power players that are listed among the firm’s clients.
Stakeholder’s anger won’t vanish overnight, but if Bloomberg genuinely makes every effort to secure its terminals, whether from its own reporters or, as Jonathan mentioned, the other prying eyes that will inevitably be attracted, it can make a recovery. Of course, the whole process will have to be shared with stakeholders, and packaged to that it makes an easily-digestible story, but considering Bloomberg‘s significant media chops we’re thinking the organization should be able to handle that.
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]