PUBLIC AWARENESS 

Abstract 

Public information and awareness are factors often overlooked in deposit insurance 

system design. For a deposit insurance system to be effective, it is essential that the 

public be informed about the benefits and limitations of the system. Public awareness is 

particularly important for newly established deposit insurance systems. Although the 

costs of ensuring that the public is informed may be considerable, the need for public 

awareness should not be underestimated. 

Many countries with established systems have widely publicised the terms and conditions 

of deposit insurance coverage to ensure that depositors are aware of the systems in place 

to limit the probability of runs in the event of the failure of an insured institution. It also 

is important to make sure that depositors are aware of coverage limitations in terms of 

amounts and types of accounts covered in order to avoid the presumption that all deposits 

and other financial products are protected. 
 

 

 

 

 

PUBLIC AWARENESS 

Public information and awareness often are overlooked in the design of a deposit 

insurance system. In order for a deposit insurance system to be effective, it is essential 

that the public be informed about the benefits and limitations of the system. Public 

awareness is particularly important for newly established deposit insurance systems or 

when an existing system undergoes a significant change. Although the costs of ensuring 

that the public is informed may be considerable, the need for public awareness should not 

be underestimated. 

This paper discusses the role that public awareness plays in contributing to an effective 

deposit insurance system.1 It identifies the objectives of a public-awareness program and 

the target audiences that may need to be reached. Other features of a public-awareness 

program that are discussed include what information needs to be communicated, which 

communication techniques are effective, and what lessons have been learned with respect 

to promoting public awareness. 

Background 

The need for public information and awareness stems from the unique intermediary role 

played by depository institutions. Research studies that have focused on the special role 

of depository institutions have stressed the ability of such institutions to fund illiquid 

assets with highly liquid liabilities. This liquidity-transformation function, which enables 

depository institutions to provide useful services, however, is also the source of 

depository institutions’ susceptibility to destructive deposit runs. 

The belief that a run will occur can be self-fulfiling. If depositors are uncertain whether 

their funds are safe, there is a greater likelihood that they will withdraw their funds when 

problems or the perception of problems develop at a depository institution. If 

withdrawals occur in sufficient number and scale, a run may ensue and even spread to 

other institutions. The result is that economic activity is affected adversely. If runs 

become widespread, there may be a contraction in the economy overall. As discussed 

below, a well-designed public-awareness program can reduce the likelihood that 

depositors will withdraw their funds when problems develop at an insured institution. 

Objectives of a Public-Awareness Program 

The effectiveness of a public-awareness program is tested when institutions fail or there 

is a wave of failures. In times of financial stress, countries can least afford to discover 

that the public is not adequately informed about the features of the deposit insurance 

system. Thus, it is important to craft a public-awareness program as soon as possible 

after the decision is made to establish a deposit insurance system. It also should be noted 

1

 The Subgroup includes representatives from Jamaica (coordinator), Hungary, Japan, Mexico, and 

Philippines. 
 

 

 

 

 

 

 

that efforts to inform the public about deposit insurance should be viewed in a long-term 

context. As discussed below, experience has shown that the characteristics of the deposit 

insurance system need to be publicised regularly so that the credibility of the system is 

strengthened and maintained. 

A public-awareness program can be designed to achieve several objectives. First, a welldesigned program can disseminate information to promote and facilitate understanding of 

the concept of deposit insurance and the main features of a country’s deposit insurance 

system. In this regard, the public needs to be educated about both what deposit insurance 

can and cannot accomplish. With respect to the latter, unrealistic expectations can 

undermine a deposit insurance system and contribute to financial instability. 

An effective public-awareness program also can help to restore and promote confidence 

in the financial sector. This objective is particularly important when countries may be 

experiencing waves of failures and/or when countries may be transitioning from a blanket 

guarantee to limited coverage of deposits. If depositors have trust in the safety of money 

placed in insured institutions, economic recovery can be achieved more quickly and 

financial stability can be enhanced. 

Third, a public-awareness program can help to disseminate vital information to depositors 

when failures of insured institutions occur. The public should be assured that the deposit 

insurer, together with the bank supervisory agency, is working to resolve any such 

failures quickly and that insured deposits are safe. In the event an insured depository 

institution is closed, a public-awareness program, for example, can provide guidance to 

depositors as to how to file claims. The ability of a deposit insurer to provide such 

information has implications for how effectively it can fulfil its mandate and for how 

quickly depositors’ funds are restored and depositor confidence is maintained. 

Finally, a well-designed public-awareness program carries benefits for the officials and 

staff of the deposit insurer. A public-awareness program helps to put a human face on 

the entity that provides deposit insurance. Such a program can create an image of 

solidity, professionalism, public-mindedness, and efficiency for the deposit insurer. As a 

result, greater public acceptance may make the job of the deposit insurer easier, 

especially when failures of depository institutions occur. 

Target Audiences 

In designing an effective public-awareness program it is critical to identify the target 

audiences that must be reached. Moreover, which audiences need to be targeted may 

change over time, depending on what goals have been identified and the stage of 

development of the deposit insurance program. For example, if a country characterised 

by stable economic conditions is considering introducing a limited-coverage deposit 

insurance system, the target audiences may be narrow. If a country is experiencing some 

financial instability, the target audiences may need to be relatively broad. 
 

 

 

 

One of the most important audiences is the staff of depository institutions, especially 

operations and front-line staff. Employees of depository institutions should be trained to 

answer questions about deposit insurance because they are most likely to be queried by 

depositors and others seeking information. 

Present and potential depositors in insured depository institutions should be targeted 

separately. In this regard, small, unsophisticated depositors should receive special 

attention. Depository institutions should inform customers of their membership in a 

deposit insurance system. Information should be readily available about the terms and 

conditions of coverage. If an institution is able to withdraw from a deposit insurance 

system, this fact should be reported immediately and in writing to its customers. 

In addition to the need to inform employees of insured depository institutions and 

depositors about the benefits and limitations of deposit insurance, there are various 

market segments that may need to be targeted. These special market segments might 

include one or more of the following groups: trade unions, professional and business 

associations, retirees, and students in high schools and post-secondary institutions. 

Because of the potential reach of these groups in shaping opinion and disseminating 

information, it may prove useful to prepare information on deposit insurance targeted 

specifically toward these groups. 

If a public-policy objective of the deposit insurer is to generate savings, officials might 

consider preparing and disseminating information on deposit insurance to guest workers 

or expatriates living abroad where there is significant movement of persons into or out of 

a country for employment and/or other reasons. The existence of information on deposit 

insurance may influence decisions of individuals as to where they want to deposit their 

funds. Such decisions may have implications for a given country’s foreign-exchange 

earnings and thus its economic and financial condition. 

Deposit insurance officials should not overlook the need to inform the media about the 

main features of a country’s deposit insurance system. When problems develop in 

insured institutions it is especially crucial that the media have accurate information on 

deposit insurance and a deposit insurer’s effectiveness in helping to resolve failures of 

these institutions, if applicable. If pertinent, accurate information is provided to the 

media, the latter can help to quell fears about the safety of depositors’ funds, if necessary. 

Finally, deposit insurance officials should strive to keep lawmakers and other public 

officials apprised of the features of the deposit insurance program. Educational efforts 

that target public officials should discuss how deposit insurance relates to the other 

components of a country’s safety net. Moreover, if problems develop in insured 

institutions that strain the resources of the deposit insurer, the latter may require financial 

assistance from the government. Any such assistance may be more readily forthcoming 

if public officials have a thorough understanding of the objectives and features of the 

deposit insurance system. 
 

 

 

 

Communication Techniques or Strategies 

A broad range of options is available to deposit insurance officials regarding how to 

disseminate information about deposit insurance to the various audiences discussed 

above. Care should be taken to select or devise communication strategies that guarantee 

the best returns in terms of the objectives of the public-awareness program. This decision 

is likely to be influenced by factors such as: demography, the level of literacy, size of the 

population, budgetary constraints, and the intended target audience. Deposit insurers 

might want to contract for the services of experts at companies that specialise in 

marketing, communications, or other fields. The costs of contracting for outside experts 

should be weighed against the potential benefits to be gained. In general, most countries 

rely on both the print and electronic media in different degrees and with varied support 

from insured depository institutions or government information units to implement their 

public education or awareness programs. 

Educational materials 

Deposit insurers in many countries have relied heavily on the publication and 

dissemination of educational materials to inform target audiences about deposit 

insurance. Such educational materials include the following: fliers, fact sheets, 

pamphlets, brochures, booklets and other written documents. These materials are either 

distributed directly or via the Internet, insured institutions, and consumer advice bureaus. 

For example, officials in some countries have prepared comprehensive books or guides to 

enable employees of insured institutions to provide their depositors and others with 

accurate and complete information about insurance coverage. These instructional 

materials are designed to assist insured institutions in developing in-house training 

programs on deposit insurance. 

Print and broadcast-media coverage 

Deposit insurers have adopted different approaches with respect to print- and broadcastmedia coverage. This reflects the public-service view that the print and broadcast media 

are excellent communication vehicles for disseminating information to a broad audience. 

In fact, in some countries it is mandatory that insured depository institutions indicate in 

advertisements that they are members of the deposit insurance system that is operating in 

the country. Deposit insurance systems that have developed logos and tag lines find it 

helpful to include or highlight the logo and/or tag line in any media advertisement. 

Governments in other countries may prohibit advertisement of membership in deposit 

insurance systems. Such prohibitions may have been put in place to prevent insured 

institutions from using such membership as a competitive edge. It should be noted, 

however, that even in countries in which media advertising is prohibited, insured 

depository institutions are expected to inform their customers about deposit insurance 

coverage issues. The preferred approach in these countries is for depository institutions 

to provide such information in written form to individual customers. 
 

Product registers 

A number of countries require insured depository institutions to provide depositors and 

other customers with written lists that stipulate which products offered by the institution 

are actually insured. Such product registers serve several purposes. First, the registers 

help to ensure that customers receive general information about deposit insurance. 

Second, such registers help to differentiate insured and uninsured products, thereby 

reducing possible confusion on the part of potential and actual customers. For example, 

deposit insurance officials in some countries review the product registers before insured 

depository institutions disseminate them to customers. 

There is widespread agreement that materials that are made available to customers should 

be written so that they are readily understood. Deposit insurers in countries with 

multicultural populations have recognised the need to provide written materials on 

deposit insurance in the major languages spoken by residents. 

Guest lectures and presentations 

Deposit insurance officials in some countries have found it beneficial to give guest 

lectures and presentations to various groups in their respective countries and even abroad. 

These may be done in coordination with professional groups and associations. Potential 

audiences include, for example, consumer groups, civic associations, employers and 

unions, financial journalists, and trade associations. Members of such groups can often 

reach even broader audiences as a result of personal relationships, thereby helping 

officials to disseminate accurate information on deposit insurance issues. As noted 

earlier, officials of deposit insurance systems may want to schedule appearances before 

groups of citizens who may be living abroad in certain population centers. If these efforts 

prove to be successful, they can have a beneficial effect on a country’s foreign-exchange 

earnings. 

Public hotline/helpline 

Deposit insurance officials may find it useful to establish a toll-free telephone number 

that can be accessed easily by both local and overseas depositors. This service can help 

to provide customers with answers to their questions or to refer them to the proper 

individual(s) who can help them with particular issues. Telephone hotlines are 

particularly useful when an insured institution encounters problems and members of the 

public are unsure about the safety of their deposits. In countries with multicultural 

populations, deposit insurance officials may want to provide access to the telephone 

hotline service in the major languages spoken in the country. 

Web site 

With the growth in the use of the Internet, many deposit insurers have established Web 

sites. These Web sites provide basic information on the features of the deposit insurance 

system in operation in a particular country. If information is given about coverage rules 
 

 

and insurance limits it can be an effective way to communicate with the populace. A 

well-designed Web site can be used to complement the information and personal service 

available through use of the public hotlines discussed above. It also is an effective venue 

for posting other information, such as information pertaining to employment 

opportunities and asset disposition. Web sites also can generate feedback from the public 

either on operational issues or complaints about certain banking practices. 

Public forums/educational-outreach seminars 

Deposit insurers in a number of countries have found it useful to hold or conduct public 

forums and educational-outreach seminars. In some countries, deposit insurers conduct 

regional seminars on a regular basis on deposit insurance issues for bankers and other 

interested parties. These seminars stress the need for insured institutions to inform their 

employees, particularly those employed in a front-line or operational capacity, about 

deposit insurance coverage and other issues. 

Deposit insurance officials in some countries have made seminars a fundamental part of 

their public-awareness program. For example, seminars may be aimed at returning 

residents and conducted in tandem with representatives from other departments in the 

government that oversee financial-services activities. Such seminars focus on the mix of 

measures that have been put in place by the government to protect depositors and 

investors in the country’s financial system. These measures include the strengthening of 

the legislative framework, the enhanced roles and functions of the various regulatory 

agencies, the introduction of an explicit deposit insurance scheme, and further investment 

and savings opportunities in the country’s money and capital markets. 

Deposit insurance officials should not overlook the need to hold briefings for elected 

government officials and other policymakers. Deposit insurers in a number of countries 

have recognised the need to keep an open and ongoing dialogue with lawmakers. Open 

communications particularly are important when countries revamp their deposit insurance 

systems. 

Operational Issues 

Deposit insurers in a number of countries have found it useful to conduct opinion 

surveys before mounting a public-awareness campaign. The purpose of such surveys is 

to identify what strategy or strategies should be employed and what audiences should be 

targeted. Although such surveys may be costly, the potential benefits often outweigh the 

initial costs that must be incurred. After the survey has been conducted, the focus of the 

public-awareness campaign should be refined to achieve the desired objective(s). 

Subsequently, the results of the public-awareness program should be evaluated to 

determine its effectiveness. Experience has shown that such surveys may need to be 

conducted every few years. If failures are relatively rare, the public may forget about the 

purpose of deposit insurance. Surveys provide useful benchmark information and help to 
 

 

 

 

 

 

 

identify whether new measures are needed to keep the public informed about deposit 

insurance issues. 

Experience has shown that the prime responsibility for the public-awareness campaign 

generally rests with the deposit insurer. If deposit insurers wait for others to suggest that 

a public-awareness campaign is warranted, such suggestions may come too late or not at 

all. However, in seizing the initiative, deposit insurers should solicit the views of 

officials of insured depository institutions. It is important that the latter be consulted in 

crafting the public-awareness program because their staff will be key to disseminating 

information on deposit insurance. 

One obvious question that must be addressed is who should pay for the public-awareness 

campaign. The answer to this question partially rests on what type of deposit insurance 

system will be or has been adopted. If a purely private scheme is sought or is in place, 

the costs of any public-awareness campaign should be bourne by the private sector. In 

cases where the scheme is government administered and privately funded, the costs 

should be bourne by the private sector. In the case of a program funded by the 

government, the costs should be bourne by the government. If funding comes from more 

than one source, the underwriting of costs should be a collaborative effort involving the 

deposit insurer, member institutions, banking associations or the government. 

Special Considerations 

There are certain times when the timing and content of a public-awareness program are 

especially important. These include when a country is transitioning from a blanket 

guarantee to limited-coverage deposit insurance and when an insured depository 

institution is closed. 

Transitioning to limited coverage 

It is vitally important that the public understand what is occurring and why once a 

decision has been made to lift a blanket guarantee and adopt limited coverage. Any 

movement to reduce coverage can be misconstrued and perceived negatively by the 

public if they feel that something “is being taken away from them.” In addition, efforts to 

scale back coverage may raise unwarranted doubts about the health of depository 

institutions and/or the financial system overall. Thus, it is crucial to explain to the public 

why limited coverage is being adopted and what benefits will accrue to the populace. 

In transitioning to limited coverage, it is important that the proposed timetable, whether 

on a fast-track or gradual basis, be communicated to the public. If the timetable cannot 

be met as the transition proceeds, the public should be informed about what changes have 

occurred to alter the initial timetable. Subsequently, the revised timetable must be widely 

publicised. 
 

 

 

 

 

 

Failures of insured institutions 

When insured depository institutions are closed, it is important that depositors be 

reassured that their claims will be settled promptly and that they know how to proceed in 

order to receive payment. Failure situations may be localised or they may encompass an 

entire country or even cross borders. Deposit insurance officials need to have plans 

already prepared detailing how they will inform depositors and other creditors about their 

rights and the procedures for seeking reimbursement. 

There are numerous methods that can be employed to inform the public. In some 

countries, deposit insurers provide on-site information services to assist depositors in the 

filing of claims and advertise in major newspapers when failures occur. Other methods 

utilised include television and radio spots informing depositors about the failure(s) and 

how to proceed with the filing of claims. Press conferences convened by the deposit 

insurer also can be an effective means to inform the public. As noted earlier, it is 

important to establish and maintain contacts with the media when the decision is made to 

establish a deposit insurance system. Such contacts can prove invaluable when failures 

occur and may need to be enlisted to help allay the fears of the public. 

A public-awareness plan to address issues related to closures of insured depository 

institutions should be carefully conceived before it is needed, not hastily prepared after a 

closure has occurred. A well-designed public-awareness program can help to counteract 

the potentially disruptive effects of failures of insured institutions. 

Conclusions 

In order for a deposit insurance system to be effective, it is essential that the public be 

informed about the benefits and limitations of the scheme. Although the costs of 

ensuring that the public is informed may be considerable, the need for public awareness 

should not be underestimated. It is important to craft a public-awareness program as 

soon as possible after the decision is made to establish a deposit insurance program. 

Experience has shown that subsequently the characteristics of the deposit insurance 

system need to be publicised regularly so that the credibility of the system is strengthened 

and maintained. 

In designing an effective public-awareness program it is critical to identify the target 

audiences that must be reached. One of the most important audiences is the staff of 

depository institutions, especially operations and front-line staff. The primary 

responsibility for the public-awareness campaign generally rests with the deposit insurer. 

Care should be taken to select or devise communication strategies that guarantee the best 

returns in terms of the objectives of the public-awareness program. 

There are certain times when the timing and content of a public-awareness program are 

especially important. When a country is transitioning from a blanket guarantee it is 

important to keep the public well-informed. The public must understand what is 

occurring and why after the decision has been made to lift a blanket guarantee and adopt 
 

limited coverage. In particular, the proposed timetable, whether on a fast-track or gradual 

basis, should be communicated to the public. A well-crafted program can help to bring 

about financial recovery. 

Similarly, the timing and content of a public-awareness program are important when 

insured institutions are closed. Depositors must be reassured that their claims will be 

settled promptly. They also need to know how to proceed in order to receive payment. A 

public-awareness plan to address issues related to actual failures should be carefully 

conceived before it is needed. A well-designed public-awareness program can help to 

counteract the potentially disruptive effects of failures of insured institutions.