At CSTMR, we strongly believe that the most disruptive fintechs and financial services organizations have one essential trait in common:
They can turn something taken for granted into something truly special.
The most obvious example is through their products and services—they work with the latest advances in technology to meet today’s demand for innovative products and services.
And yet, there is another less obvious but just as important example… how they run their businesses.
In 2023, fintechs have moved beyond the “bottom line.” Today, the most successful financial services leaders aim to run their businesses in a way that not only drives profit and delivers innovative products, but also in a way that better serves the public good. I’m talking about corporate social responsibility, or CSR.
In today’s article, we are going to take a detailed look at CSR for fintechs, including what it is, why it matters, and some CSR best practices.
What Is Corporate Social Responsibility?
Whether or not you’re familiar with the term, it’s worth going over what corporate social responsibility means.
In a nutshell, it’s the concept of adding environmental and social goals to a business’s overall economic goals. Sure, a business needs to make money, but it can do so in a way that’s not harmful to the world around it.
There are four ways in which a company can be responsible and accountable for its operations:
- Environmentally: helping to preserve nature.
- Ethically: acting in an honest, fair, and transparent way.
- Philanthropically: donating and contributing to causes the company believes in.
- Financially: tying the above together, by funding actions that lead to them.
The act of creating and implementing company-wide values that align with CSR is an excellent step, but it isn’t enough on its own.
As younger generations grow into the most dominant consumer demographic, your company’s actions must speak louder than your words.
Knowledgeable new consumers don’t just listen—they watch every single thing you do. And at the end of the day, modern-day consumers are willing to spend more money with brands that prioritize corporate social responsibility.
Corporate Social Responsibility by the Numbers
Before we get into what CSR in financial services looks like, let’s back up what we just laid out with some statistics.
- 70% of consumers demand to know what the brands they spend on do about CSR.
- 90% of millennials would rather spend on brands that fight for a social or environmental cause.
- There are more Americans who believe it’s more important for a company to improve the world, rather than make money for its shareholders.
- 64% of global consumers find brands more attractive when they actively communicate their purpose.
- Over 90% of the biggest companies publish sustainability reports.
- 84% of consumers are more likely to recommend a brand if it has a strong purpose.
The numbers here are compelling, and the message is clear: your brand should approach corporate social responsibility with the same level of intention and planning that you reserve for your products and services.
As delicate of a balancing act as this might seem, there are ways to ensure your CSR policies are rooted in a strong foundation.
Benefits of CSR for Fintechs
We’ve gone over, and shown, just how important it is for your brand to focus on CSR. But up to now, it has been from a broad perspective.
What, exactly, does taking CSR seriously do for your brand? Let’s take a closer look.
For a fintech to thrive, it needs to be trusted: by its customers, but also by other stakeholders, such as investors or business partners.
In fact, businesses that are highly trusted are two and a half times more likely to perform better.
Being serious about CSR means working with a clear purpose. The more your business proves that commitment, the more consistent your brand seems to people. And this consistency is what ultimately gets people to trust a brand.
Just as important as consistency is being honest. Brands that aren’t real with their messages can easily be accused of “faking” their mission, as we see in many greenwashing cases.
Show that one CSR-related marketing campaign isn’t a single cry for attention, but instead, an effort towards helping change the world. Deliver products that are in line with what your brand stands for. Make reports public, each and every year.
You get the idea.
Boosts Talent Acquisition and Retention
If a company has a strong purpose, it can easily connect with people who share that purpose.
When an employee and the company they work for see eye to eye on certain values, then it’s likely that they’ll get along. In fact, studies show that the stronger this relationship is, the more engaged employees are.
Workplaces that have engaged employees see a reduction of 84% in absenteeism. Which, needless to say, is good for productivity.
To achieve this, actively involve your employees in the creation and execution of your CSR policy—ask for their opinions, thoughts, and suggestions. Or engage in volunteering campaigns that support your brand’s purpose, where employees can happily help out.
Satisfies Consumer Preferences
As we mentioned before, consumers are becoming more aware of what and where they spend their money.
This is especially true for millennial and gen Z newcomers, 90% of which are actively reducing their negative impact on the planet—and 64% of them would pay more for products that act the same way.
As straightforward as this fact is, it’s not easy to gain the market. One study calls it the Purpose Paradox: while 90% of consumers believe it’s important for a brand to show a purpose, only 37% consider companies to have a clear purpose.
One policy at a time, and one action after another, your brand must demonstrate that it’s aligned with what consumers are looking for, not only in a product, but in a purposeful company.
4 CSR Best Practices for Fintechs
For more tips, here’s a list of actionable best practices that can help your fintech brand implement its CSR policies.
1. Define Corporate Values and Metrics
Before you think about what CSR looks like for your brand, you need to define your brand values.
List out what’s most important to your company from a values perspective first. That way, when it’s time to define your corporate social responsibility initiatives, they’ll be rooted in a strong foundation.
Then, establish benchmarks and metrics to help understand how your CSR program is performing. By reporting the outcomes of your efforts, you can easily see what’s working, what isn’t, and make the appropriate adjustments along the way.
2. Stay Authentic
When it comes to selecting which non-profit organizations your CSR efforts will help support, it’s important to stay authentic to your brand.
Never, ever (EVER!) compromise your values to please the masses. Because you never will, and, in your attempt, you could easily lose your most loyal customers.
For example, REI is a brand well known for its commitment to protecting the environment. If REI suddenly gave its financial support to an organization with business practices that work against climate change, it’d not only lose a large chunk of its customer base, but the support of its stakeholders.
Your CSR policies should be aligned with and reinforce your brand values.
3. Write It Down
Without writing it down, your corporate social responsibility policy is nothing more than a series of nice thoughts and intended actions.
Outline principles every member of your team can execute, along with the metrics you establish to measure the efficacy of your program.
Part of creating a corporate social responsibility policy is communicating it to your audience, both internal and external.
Draft a copy that you can share internally with your employees and investors.
Consider devoting a page on your website to share your brand values, mission, and CSR practices. Ask your marketing and social media teams to come up with a public-facing strategy that communicates your commitment to social responsibility.
4. Live It
While it’s important to create a CSR program for your fintech or financial services brand, it’s equally important not to rush into it.
Only make commitments and promises you know you can keep, and stand by them. Your entire organization should not only know where you stand on societal issues, but stand with you as a representative of the brand.
Make CSR a Priority With CSTMR
At CSTMR, we truly believe, work, and live for our mission.
Through our work, one fintech marketing strategy at a time, we know we can improve the financial well-being of everyone. Our customers know that too, and that’s why we choose to work with them, and they choose to work with us.
If you’re looking for ways to leverage/promote your CSR policies, or if you just want to chat with us, don’t hesitate to reach out today.