Connect with us

Business

Why CSR communication is vital in the Finance sector 

Published

on

Why CSR communication is vital in the Finance sector 

By Simon Wadsworth, CEO of Igniyte, online reputation specialists

Today's consumer-driven world means the reputation of businesses, brands and financial institutions is more important than ever. People want to do business with companies they believe in. And they're on the lookout for meaningless corporate spiel that says much and delivers little.

By actively communicating your Corporate Social Responsibility (CSR) strategies, companies operating with the Finance sector build and maintain trust with customers, suppliers, partners and other stakeholders. In other words, the way financial institutions implement CSR strategies directly impacts their reputation.

Why is CSR communication so important for your corporate reputation
Maximising your CSR strategy for reputation management purposes will pay dividends. CSR is good for business and allows financial institutions to demonstrate their benefit to the wider community. A strong, workable, demonstrable CSR strategy is a vital part of a company's reputation. This is true in any sector, but particularly within Finance as trust is often low.

As well as having a CSR strategy, implementing it and measuring its success, effective communication is vital. Not only will it help to build and enhance your corporate online reputation and your customer-base, but it will also serve as a protective barrier in case of any reputational damage.

Millennials and Generation Z are placing more focus on social responsibility than previous generations. They care about the companies they choose to give their money to, and they are looking for businesses with strong CSR accountability. This progressive shift towards companies that take responsibility for their impact on the environment, sustainability and other social issues will only continue. It's apparent that COVID-19 has increased consumer interest in CSR and what companies actually do.

(Caption: Philanthropy, your workforce, environmental concerns and volunteering should all be considered in your comm strategy) 

(Caption: Philanthropy, your workforce, environmental concerns and volunteering should all be considered in your comm strategy) 

The four areas of CSR to include in your comms strategy
Broadly, CSR comprises four areas:

  1. Philanthropy – strategic monetary gifts aimed at solving systemic long-term problems.
  2. Workforce – how employees are treated, how diverse your workplace is and how satisfied your workforce.
  3. Environmental conservation – does your company exceed the basic Government requirements and can you show it? The legal minimum isn't enough.
  4. Volunteering – donating effort, talent and time to make an instant difference.

CSR vastly improves corporate reputation, which increases the company's overall value. Beyond its financial benefits, an open and well communicated CSR strategy focuses the company's overall efforts on what's best for the customers, the wider community and the world. It's powerful when done well.

For CSR to be done well, above all it has to be genuine. Paying lip service to buzzwords and sending out self-congratulatory press releases is not how an effecting CSR comms plan is laid out. It's a case of show and tell.

Communicating the following CSR practices will go a long way to boosting your online and offline reputation with consumers and other stakeholders:

  1. Helping people who need it in the community, whether it's through volunteering, financial contributions or a COVID-related scheme.
  2. Actively working to mitigate the impact of climate change, through lowering emissions, finding new ways to ensure that the company is lowering its carbon footprint and supporting charities and movements that are making a difference.
  3. Embracing Fair Trade through every possible way.
  4. Funding and supporting vaccine research, distribution and COVID-19 aid.
  5. Engaging in substantial charitable giving.
  6. Volunteering in the community.
(Caption: Understanding your partners is key for social responsibility) 

(Caption: Understanding your partners is key for social responsibility) 

Do your affiliates match up? 
Consideration for CSR should flow through to the companies that your institution invests in. Enforcing strict standards regarding the affiliates and companies you work with clearly demonstrates your dedication to social responsibility, and this will show to your customer base. Investments should be across renewable energy, innovation, humanitarian aid and environmental protection tech, among many others. This kind of CSR investment brings returns indirectly and directly by building your reputation with consumers.

Improve conditions for employees, particularly as lockdowns lift. Consumers and society are watching big businesses closely to see how they are treating their workforce in these most challenging of times. For many, it dictates where they put their own money and focus.

Invite the community into your CSR programme. This may be virtually for now, but in time work directly with the local community across environmental and social considerations. Nothing goes further to build your corporate reputation than demonstrating your commitment in every way possible. We live in difficult, challenging times and the pandemic has made it harder than ever. Consumers are rejecting brands and businesses that appear to not care.

(Caption: Using CSR in your communications strategy helps increase consumer trust) 

(Caption: Using CSR in your communications strategy helps increase consumer trust) 

Communication is key for reputation building 
Using your CSR strategy and effective communication will improve your corporate reputation. This is essential in the 21st century. Consumers are online 24/7 and a vast number look up a bank or finance company online before they use them. They check out company reviews. They Google your company name and read any media coverage. They watch your socials for evidence of good or bad corporate behaviour. All of this combines to form your online corporate reputation.

Improving your company's corporate reputation is a strategy that will future proof your business by increasing consumer trust, reducing employee turnover, and broadening people's awareness of your brand. This effectively provides a safety net that will pay off should a reputation crisis hit.

Simon Wadsworth

Simon Wadsworth

This is what a well communicated corporate social responsibility will do for your finance company:

  • Lower staff turnover.
  • A constantly growing consumer trust level.
  • Improved brand sentiment.
  • More sales and increased revenue.
  • Improved corporate online reputation shown through Google search.
  • Reduced operational costs.
  • Better media coverage.
  • Higher levels of customer loyalty.

And to back this up? Check out these statistics:

  • massive 92% of consumersthink more of companies that actively support ESG concerns.
  • During a reputational crisis, 63% of consumers would give businesses with proven social responsibility more of a break.
  • 87% of consumerswill choose to buy a product or service from a company that advocates for something they care about on a personal level.
  • 90% of peoplecheck the first page of Google only before making a decision to use a company.

Don't hide your CSR under a bushel. Communicate it in ways that consumers will realistically see. Confining the good news to trade magazines and specialist press won't reach the people you really want to communicate with. You want people to search your company name when looking for financial services, and for them to immediately get a positive impression.

Use social media channels, including but not limited to Twitter, Facebook, Instagram, Snapchat and YouTube. There are so many visual ways you can communicate the good work your company is doing in a way that will resonate with the maximum number of consumers and stakeholders.

Highlight relevant investments, improvements, actions and everything else associated with CSR via social media and other channels. Don't think of it as marketing, but as a way to grow your social responsibility even more.

The financial sector is subject to more scepticism from consumers than others. That's a reality. This means it's a harder job to build the kind of online reputation you want, compared with say a sustainable start-up.

Integrate your CSR strategy into your corporate values, culture and comms plan. Make it the core of your business strategy, but don't treat it as a marketing tool. It's much more than that and consumers are ready to dive on any hint of greenwashing. Should customers decide that their trust in your company was a mistake, it's extremely difficult to get that trust back.

Editorial & Advertiser disclosure

Call For Entries

Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Newsletters with Secrets & Analysis. Subscribe Now

Newsletters with Secrets & Analysis. Subscribe Now

Newsletters with Secrets & Analysis. Subscribe Now

Recommended