Doubling Down on Socially Responsible Banking

Consumers continue choosing bank and credit union brands that show their commitment to social purpose

In this rising-rate, price-sensitive environment, some financial brands that once banked on being known as good corporate citizens have now shifted their focus to more commodified concerns instead. Yet, consumers still care about good governance and social issues like diversity, equity and inclusion, and sustainability, and make their purchasing decisions based on these beliefs. And banks like Ally have remained committed and even expanded purpose-driven programs and partnerships. While competitive products and good tech are table stakes for financial institutions, smart banks understand that deeper relationships aren’t built on products, but principles.

Most often known for its credit card products, American Express Bank has been consistently ranked as one of the best banks for positive social and environmental impact. “American Express’s social and environmental goals include three key pillars – building financial confidence, advancing climate solutions, and promoting diversity, equity, and inclusion,” according to Yahoo! Finance. “In the past year, American Express submitted emissions reduction targets to the Science Based Targets initiative as part of a commitment to net-zero emissions by 2035.” The bank regularly spotlights its social and climate-related impacts and initiatives.

Other banks focus substantial attention on diversity and inclusion efforts. For example, JPMorgan Chase has made significant investments into solving the issue of underbanked consumers and expanding its network of branches to better serve rural and low-income communities. “In 2020, JPMorgan launched a major PR campaign to announce its $30 billion pledge to racial equity,” according to Insider Intelligence. The bank also uses marketing messages to provide regular updates on how the bank is tracking toward its goals for diversity. “To complement this strategy, JPMorgan has focused on hiring community managers who serve minorities, the disabled, and other consumers who face significant barriers to banking.”

For their part, consumers are doing their due diligence before choosing where to bank. “Every dollar you invest, just like every dollar you spend, is a vote for the kind of world you want to live in,” says Tanja Hester, author of Wallet Activism. “There is an entire generation of people who apply deeply held values to brands that they want to be associated with, from food to clothing to cosmetics,” according to Charley Cummings, CEO of Walden Mutual, in Forbes’ exploration of socially aware banking. “When we’ve come to find that the top five banks have invested trillions in fossil fuel development, that creates a big opening for banks and consumers to do better.”

If you’re a banking leader looking at serving more and serving better, get in touch with the banking and credit union experts at Adrenaline. And don’t forget to subscribe to Believe in Banking to stay up to date with the latest news impacting the banking and credit union industries.