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Banks need a purpose other than making money

I wrote a couple of recent blogs about the issue with finding good developers and attracting them to banks. The first, about the war for talent, made the statement: the main motivation of developers joining a firm is to solve interesting problems. The second, titled When code is art, how do you attract great artists?, talked about the challenge of banking professionals understanding the mindset of the developer.

These issues come to a head when we look at how most banks think of technology and engineers. They see this as a function that serves the business, rather than as the business. Again, another recent blog discussed the fact that technology is business and business is technology, with developers and designers sitting inside the business teams, not outside.

As I contemplated these things, I also reflected on discussions of the priorities of the Gen Z’s and Y’s of this world. The kids who can code. The children who are the tech, who can teach the parents who are the fin. What are their priorities?

According to research in the US consumer markets, the NUMBER ONE thing you need, if you want to appeal to Gen Z – those under 25 who are both our key generation of customers and employees right now – is a business with a purpose (other than making money).  55 percent of Gen Z choose brands that are eco-friendly and socially responsible. Generation Z wants you to have a positive purpose that improves the world in some way. Any business out to make money, regardless of the damage left in its wake, runs the risk of being shunned by Gen Z.

This is where it gets interesting, as I’ve been blogging about sustainable finance, sustainable abundance and the UN’s Sustainability Development Goals (SDGs) over the past week, specifically, and over the past twenty years, generally. I think this is now coming to a head.

You see, you will not attract the most talented developers and the most profitable customers if you only focus upon shareholder return and quarterly results. The bonus pool will have no bonus if you think that way. Equally, you may run a pension fund but if there’s no-one left to pay a pension to in the future, what’s the point of your fund? If we’ve destroyed the planet, you have no point.

For me, this all comes together with a keen sense of purpose for any financial institution who want to attract talent whilst, at the same time, appealing to the next generation. You need a purpose and you need to prove that you’re investing in the future. You need to show sustainable goals and objectives, but be more than that. You need to show you’re serious. You need to turn away fossil fuel firms who don’t provide carbon offsets. You need to invest in renewable energy and companies that are eco-friendly, whilst declining good business from arms firms and airlines who offer nothing but profit.

Can we do this? Can we seriously do this?

I’m not sure as, right now, most of the financial firms I see paying lip service to sustainability. They claim to be sustainable on the one hand, whilst doing dirty dealing with the other. I’ve seen it too often and, inevitably, such dirty dealing generally comes to light when the activists get involved.

However, for all the negative shade thrown at the financial industry, if the industry can truly turn itself around to be a force for good, to do good for society and good for the planet, then the future is bright. Well, brighter.

Right now, I see this as a moral compass change, but there are a few firms blazing the trail out there. Here’s a list of just the very small few, picked out by World Finance:

AUSTRLIA: Westpac

Westpac has a three-pronged approach to sustainability, outlined in its 2020 Sustainability Strategy. The bank is committed to helping people make better financial decisions, supporting customers when it matters most and enhancing Australian prosperity. The institution maintains strong connections with its stakeholders, granting them an input in what direction Westpac and its sustainable activities take.

www.westpac.com.au

INDIA: Bandhan

Microfinance institution Bandhan was set up to alleviate socio-economic poverty in India. The company works with low-income households to create sustainable financial solutions, and aims to share its services with 10 million customers over the next two years. Bandhan’s values include respect for all, effective teamwork, transparency, accountability, professionalism and discipline.

www.bandhanmf.com

NEW ZEALAND: Kiwibank

New Zealand’s Kiwibank promotes sustainability through numerous methods, such as consistently monitoring its carbon emissions and using hybrid fleet vehicles to reduce its environmental impact. Each year the institution sponsors the New Zealander of the Year Awards, which recognises citizens who have made outstanding contributions to the prosperity of the country.

www.kiwibank.co.nz

SWITZERLAND: Bank Sarasin

Though headquartered in Switzerland, private banking institution Bank Sarasin has established itself in more then 25 global locations. The family-owned business promotes the long-term success of its clients through a conservative approach to growth, and has a holistic attitude to sustainability. It has its own dedicated sustainability research team to ensure best practices are maintained at all time.

www.jsafrasarasin.com

CANADA: Vancity

Vancouver’s Vancity is a values-based institution that puts sustainability and customer wellbeing at the heart of its operations. The bank returns 30 percent of its net income to members and communities, and has created initiatives to improve financial literacy. It also runs several programmes to promote affordable housing and home ownership among Canadian citizens.

www.vancity.com

NETHERLANDS: Triodos Bank

Triodos’ mission statement is to make money work for positive change. The principles that underpin this unique approach are: only lend customers’ money to trusted entrepreneurs; only lend to entities working to make the world a better place; and be transparent about how money is invested. These practices help create a society that protects the quality of life of all its members.

www.triodos.com

NIGERIA: Access Bank

In the 29 years since Access Bank was founded, it has evolved into a world-class financial institution. Over the past 10 years, the bank has worked to embed sustainability in its business strategy, driving environmental protection, community development and economic growth to build a sustainable future. This strategy has earned Access Bank a reputation as an institution that cares about more than just profit.

www.accessbankplc.com

USA: Bank of America

Bank of America has demonstrated its strong sustainability credentials by committing to investing $125bn in low-carbon financing and sustainable activities by 2025. To achieve its goals, the bank has implemented an Environmental and Social Risk Policy Framework to educate its employees. It also works to ensure its investments have a positive impact on the US economy.

www.bankofamerica.com

 

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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