Ethical banking represents an innovative operating model that is ahead of the expectations of today’s consumers. The idea behind the concept is to provide the highest possible standard of financial services in a responsible and ethical manner. This allows to meet the needs of customers while respecting their privacy, as well as respecting local and global legal requirements.
What is ethical banking? Definition of the term
Ethical banking is a term that defines an extremely broad range of practices and behaviors that aim to ensure responsible and honest financial management. It is a service offered by financial institutions that operate in accordance with a specific ethical framework and legal requirements.
Ethical banking assumes that financial institutions operate in a way that promotes social interests and fair dealings in a variety of situations, as well as supports the environment and its protection. Corporate social responsibility (CSR) is an important aspect of ethical banking, which assumes that financial institutions should act in accordance with social expectations.
What does ethical banking consist of?
Ethical banking aims to provide customers with a wide choice of financial services that are fully honest, knowledgeable and free from fraud. The main goal of ethical banking is to provide customers with the highest possible standard of financial services in a responsible and ethical manner. This includes all aspects of the process, including product selection, pricing, risk management, compliance with regulatory requirements and customer relationship management.
Ethical banking can also mean doing business in a way that supports local communities, including investing in charitable projects and environmental protection. Ethical banking also includes processes to ensure the security and confidentiality of customer data.
Genesis of ethical banking
The idea of ethical banking was born in the 1970s in the UK. The main purpose of its introduction was to make financial institutions more financially responsible and provide customers with more honest and transparent services. In the 1980s and 1990s, ethical banking began to gain popularity, and today it is part of a larger movement toward sustainable development.
Ethical banking – examples of behavior
Ethical banking requires financial institutions to adhere to a number of ethical principles. These include respecting customers’ rights, ensuring transparent and fair contract terms, including clearly informing customers of all fees and costs, and using responsible marketing practices.
Financial institutions should also support any initiatives to protect the environment, including investing in sustainable development projects and reducing energy consumption and greenhouse gas emissions. Ethical banking also requires financial institutions to provide customers with the best possible service and data security.