Abstract
The global financial crisis is expected to be of great relevance for social banks’ growth of deposits. However, it is still unclear why depositors choose social banks in general, and how the global financial crisis has affected depositors’ choice of social banks. The present paper thus explores a comprehensive set of reasons for choosing social banks, the individual relevance of reasons, as well as differences before and after the global financial crisis. Data was collected through a survey of five social banks, interviews with nine industry experts, and an online survey with 108 social and 413 conventional depositors. Using content analysis, a multi-level system of reasons for choosing social banks was identified, which refers to the social banks’ “good” and conventional banks’ “evil” characteristics. Based on a frequency analysis of codings per category, reasons with potential superior relevance for depositors’ decision-making were explored. A comparison with reasons for choosing conventional banks imply that depositors’ reasons for choosing social banks differ from those for choosing conventional banks in general. The results also indicate that the global financial crisis might have helped social banks’ growth by attracting new customer target groups, who chose social banks because of conventional banks’ “evil” characteristics.
Highlights
Financing sustainable projects through customer deposits has played a minor role in the Socially Responsible Investment (SRI) universe and is primarily offered by a few specialised banks [1], which are called social, sustainable, or ethical banks
The aim of the present paper was to identify (1) a comprehensive set of depositor reasons for choosing social banks, (2) the individual relevance of the reasons found, and (3) the change of depositor reasons over time, in order to shed some light on the impact of the global financial crisis on social banks’ growth of deposits
Based on data collected from surveys with five social banks, interviews with nine industry experts, and an online survey of depositors, 18 reasons for choosing social banks were identified, which can be divided into two groups: first, reasons that address social banks’ “good” characteristics; and second, reasons that address conventional banks’ “evil” characteristics, indicating that push and pull effects are of relevance for the choice of social bank
Summary
Financing sustainable projects through customer deposits has played a minor role in the Socially Responsible Investment (SRI) universe and is primarily offered by a few specialised banks [1], which are called social, sustainable, or ethical banks. Even one decade later, the relevant literature has not offered a sound explanation for how the global financial crisis has affected depositors’ choice of social banks. In the light of the current COVID-19 pandemic and its (expected) impact on the global economy, a sound explanation of the impact of the global financial crisis on the growth of social banks could give valuable insights into current and future crises. One reason for this lack of evidence might be the remaining uncertainty about depositors’ reasons for choosing social banks in general. The lack of a sound explanation of past growth prevents the sound prediction of future growth, bringing about massive uncertainty and poorer decisions for all manner of decision makers
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