Social Impact of Value-Based Banking: Best Practises and a Continuity Framework

Abstract

How do financial institutions enable social impact? We examined this question in the context of values-based financial institutions, which are amongst the most experienced institutions around the world in addressing the very real banking needs of enterprises and individuals within their communities. There is, indeed, an urgency today to have the banking industry consider its social impact in a holistic way. This paper expands our understanding of how these financial institutions, all members of the Global Alliance for Banking on Values, define, design, implement, monitor and scale-up social impact. We used a multiple-case studies design to investigate their approach and inductive analysis to derive a model. From a theoretical perspective, we found that a social impact virtuous circular model best reflects how values-based financial institutions approach and practise social impact. Each step of the circular model clearly shows the way in which these institutions address and achieve social impact. Our findings have important implications for academic research focussed on understanding how finance can generate social impact. The findings of this article can, especially, also have practical implications for all types of financial institutions willing to improve the way in which they address social challenges and, ultimately, increase their social impact. At a time when more resources are needed to meet the Sustainable Development Goals, this is urgent.

Predictive Insights Into Digital-Only Banking Adoption in Malaysia using Artificial Neural Networks

“…Network externalities (NE), including critical mass and the number of services, have been consistently identified as pivotal elements shaping the acceptance of innovation [26][27][28]. Lastly, it is imperative to acknowledge that in light of the UN Sustainable Development Goals (SDGs) aiming to address global challenges by 2030 [29], new business models, exemplified by digital-only banks, are anticipated to contribute to these SDGs, with a specific emphasis on environmental concerns [30]. While banks themselves are not traditionally considered to have a direct negative impact on the environment, arguments have been made regarding their indirect effects stemming from extensive paper usage, high energy consumption, and unsustainable behaviours exhibited by their customers [31,32].…”

Linking stakeholders need and sustainable business performance: Unleashing the power of shared value creation for competitive advantage—Study on selected banks in Ethiopia

“…The banking sector contributes to shared value creation by providing financial resources and expertise to support sustainable development initiatives (Hayday et al, 2015). By aligning their business objectives with the broader goals of society, banks can create shared value for stakeholders and shareholders (Alketbi et al, 2022; Kocornik‐Mina et al, 2021).…”

“…Banks practice shared value creation by embedding sustainability principles into their business operations. This involves adopting environmentally friendly practices (Kocornik-Mina et al, 2021). Furthermore, banks can actively engage with local communities to address social challenges and promote economic development.…”

Stakeholder engagement for value‐based banking: The case of Malaysian Islamic banks

“…Kocornik‐Mina et al (2021) have conducted a survey of how financial institution members of the Global Alliance for Banking on Values (GABV) approach social impact initiatives. Using a multiple‐case studies design and inductive analysis, they derive a model that sheds light on how these financial institutions define, design, implement, monitor, and scale‐up their social impact programmes.…”