Banks beware: consumers rate ESG factors as high as service levels
Corporate performance on environmental, social, governance and ethical grounds can have a strong effect on how consumers feel about their bank or wealth manager. Indeed, a new Ipsos MORI survey for global responsible investment research firm EIRIS, finds that investment in companies that perform poorly on responsible or ethical finance concerns can be almost as strong a motivator in choosing to switch financial provider as poor customer service.
Among the 1,837 of those surveyed who have ever personally bought or taken out a financial product or service around a half (51%) are likely to consider switching from their main financial provider if they have reason to believe their financial activities (e.g. lending, insuring) contribute to harmful social activities, such as human rights abuses, child labour or forced labour.
Similarly, if these same consumers have reason to believe their main financial provider has faced potential fines for activities that breached financial regulations (such as money laundering regulations, mis-selling products or manipulation of interest rates), 47% are likely to consider switching, against just 13% who are unlikely to consider doing so.
These concerns are almost as strong switch factors as another main financial provider offering better rates, fees or conditions for a similar product or account (55%) or dissatisfaction with the customer service provided (62%).
"We believe the findings from this year's survey show that corporate performance on environmental, social, governance and ethical grounds can have a strong effect on how consumers feel about their bank or wealth manager. Leading financial product providers need to continue to develop responsible investment and lending policies, and to develop appropriate products for this growing market. This will enable providers to manage risks and make the most of opportunities from the links between reputation, responsible or ethical concerns and consumer attitudes," commented Stephen Hine, head of responsible investment development, EIRIS.
The full findings of the survey are available here.
Picture credit: © Swanomurphy | Dreamstime.com - Business Ethics Word Cloud Concept Background Photo