The effect of corporate social responsibility on the branding of financial services

In today's global world, corporate social responsibility (CSR) is increasing public demand for greater transparency from multinational companies. CSR is a new and growing financial risk factor. If it is mismanaged, a firm's corporate reputation can be badly damaged and a direct negative impact on its business and bottom-line may result. Instead of simply campaigning directly against industrial groups and lobbying governments and international organisations to issue new legislation, non-governmental organisations (NGOs) are increasingly putting pressure on the financial services groups and insurance companies. This new global tactic may affect a bank's relationship with its clients and shareholders. There are market benefits and competitive advantages for those companies whose business policies integrate CSR. The growth in socially responsible investments and in CSR awareness among City people persuades some bankers that the most successful firms of the future will be those who proactively balance short-term financial goals with long-term sustainable franchise building. To respond to this challenge, corporations will have to convince citizens they can trust both their brands and the people behind them. In this context, one must recognise that finance brands have been clumsily managed. Nowadays, several big consumer brands are used as societal role models, but they are also the targets of anti-globalisation and anti-logo activists. In order to avoid such an outcome — not to mention corporate mortification — the key social marketing strategy must be to communicate proactively the business activity's raison d'être to opinion leaders and the general public. In general, industry does not yet care enough and many companies are reacting only when put under pressure by public opinion. It is time, however, to market the social raison d'être of a business and indeed to contest its current exclusion from ‘civil society’. Consumer and service sectors lead the field. In view of the downturn of the global economy, more than ever before, CSR branding is of paramount importance to the financial sector if bankers do not want to become the easy scapegoats. It is necessary to make it clear that financial services companies are global citizens too.