Financial institutions can no longer concentrate solely on helping customers make smart financial decisions. Competition from online providers is growing and consumers’ expectations are rising. More consumers than ever now want to bank with organizations that operate with the highest integrity and treat employees and the environment well.
Financial institution employees’ expectations are no different. They want to work for organizations that live their values and make an impact in their communities. Banks and credit unions that are aware of these expectations and invest in addressing them will be well-positioned for the future.
By better articulating your institution’s values and clarifying your reason for operations — whether it is mission or purpose — your financial institution can set itself up for growth, even as your competition struggles to differentiate. Purpose- and mission-driven companies are better to work for and do business with because their commitment to their “why” enables a better customer, employee, partner and shareholder experience. This is imperative in a banking world that is changing rapidly —both technologically and socially.
“Employees consider purpose twice as important on average as traditional motivators like compensation and career advancement.”
— Nicki Gibbs, Beehive Strategic Communications
Banks and credit unions can more quickly and effectively achieve their purpose or mission when expectations for employees are clear. Using values to set clear expectations and create a shared understanding of desired actions, attitudes, behaviors and an overall mindset enables employees to more effectively work together toward business outcomes.
Financial institutions that create such understanding will experience higher profitability and better retention, engagement, innovation and creativity.
Read More:
- Differentiate or Die: Financial Institutions Must Rethink Brand Mission
- How Banking Firms Can Build ‘Purpose-Driven’ Brands
- 6 Mistakes Financial Institutions Make With Their Mission/Vision Statements
How Living Your Values Will Impact Your Business
Below are four ways having purpose, mission and values aligned impacts financial institutions in a positive, tangible way.
1. Improved retention and recruitment. Employees increasingly want to work for banks or credit unions that are making a difference for their customers and stakeholders. They consider purpose twice as important on average as traditional motivators like compensation and career advancement, PwC has found.
Company purpose is also one of the strongest retention drivers for Millennial employees, according to PwC. Retention will improve and recruitment will become easier when organizations activate their purpose or mission. Employees are more likely to want to work for a bank or a credit union when they understand why their work matters.
This impacts customer behaviors as well. Consumers also aren’t hiding the fact that they’ll bring their money to organizations with values that align with their own. According to a Cone Communications study, 87% of consumers said they would purchase a product because a company advocated for an issue they cared about. Conversely 76% will refuse to buy a company’s product or service if it supports an issue contrary to their own beliefs.
2. Thriving innovation and creativity. Having a clear purpose or mission helps banks and credit unions be more innovative — especially important in times of industry disruption. 68% of “purposeful companies” agree that having a clear purpose is extremely critical to an organization’s ability to innovate in times of dramatic change, according to Ernst & Young. Purpose or mission also serve as ongoing reminders of why the organization exists, keeping it on its intended path during times of change.
Employees are also more likely to contribute innovative and creative ideas when they believe in the organization’s purpose, mission and values. Financial institutions should consistently help employees understand why their work matters, how their innovation and creativity helps the company reach its objectives quicker, and why that creates value for the employee, the bank or credit union and the customer.
3. Increased loyalty and trust. Numerous studies show that repeat customers spend more money than new ones and are less expensive to sell to than acquiring new customers. A CGS study found that the second-highest reason repeat customers return to a brand is its sustainable/ethical business practices, while the fourth reason is its brand mission.
Customers appreciate — and respond with their purchasing dollars — when organizations stand for something beyond profit alone. The clear message to financial marketers is that mission- and purpose-driven institutions should share why they exist, what they’re trying to do, and whom they serve to build trust, loyalty and preference.
4. Healthier workplace culture. Banks and credit unions that recruit and retain based on their values realize several workplace culture benefits. This strategy attracts like-minded employees that, collectively, feel accountable to each other and to the institution.
A shared sense of belonging nurtures a healthy workplace culture. Employees who share, and are inspired by, the organization’s values are more passionate, motivated, inspired, creative and engaged — all attitudes that contribute to a positive workplace culture and to profitability. In addition, workplace culture also improves when workspace and processes are shaped around values. This leads to better employee performance and the kind of high-value service customers expect.
The focus today and tomorrow should be on “doing better.” The future success of banks and credit unions can be positively impacted by aligning to a purpose or mission, and inspiring employees to act based on a guiding set of shared values. Customers want to do business with organizations that they trust — and how businesses behave strongly impacts that trust. Acting with clarity, transparency and accountability and providing a consistent, high-level experience grounded in values or guiding principles will help banks and credit unions find that balance of profit and purpose.