Ethical banking: The case of the Co-operative bank

Abstract

The aim of this paper is to present a significant current British case of the application of an ethical approach to banking practice — it relates to issues of stakeholder dialogue, corporate strategy, and marketing.

The Co-operative bank traces its organisational origins to the 1870s, and its founding principle to the beginnings of the co-operative movement in the 1830s.

In today's fiercely competitive and rapidly changing financial services market, dominated by four major players, the bank has only a 2% share and its advertising spend and marketing profile have been low.

Against this background, the bank searched for a positioning statement which would counter its low profile; express where it wanted to be; and give direction to its necessarily limited marketing and communications budget.

What slowly evolved was an ethical banking strategy which built on the bank's differences from the others, and which benefited from an opportunity which was being ignored by them. The key concept was a commitment to “the responsible sourcing and distribution of funds”. A quantitative research project was undertaken with 30 000 customers which revealed major support for the overall strategy, and which was used to prioritise the practical issues of greatest concern. The outcome was an ethical banking policy which communicated “what we are and what we stand for” and “strict guidelines on who we will, or will not do business with”.