Banks and Corporate Social Responsibility
In the United States, banks hold a unique position. They must practice corporate social responsibility, even though most banks are not social entrepreneurship companies. Government agencies regulate banks to make sure they are acting in the interests of their stakeholders. The most successful banks have a culture of honesty and fairness. This culture is not always in place at all banks. Because so many people rely on them, and because of past scandals, banks are under the microscope when it comes to corporate social responsibility.
Beneficial State Bank is one social entrepreneurship company that does have a culture of corporate social responsibility. As CEO and co-founder Kat Taylor explains, her company aims to disrupt and change the banking system. Beneficial State Bank sets itself up as a model for other banks. Their ownership and business model is unique because the bank does not make a profit. Instead, the revenue all goes back into the foundation.
No Private Shareholders
The foundation’s board is selected by other nonprofit companies. The board, at all times, seeks to serve the public interest. The board takes the money the foundation receives and reinvests it in the low income communities that Beneficial State Bank serves. This chain of accountability is a picture perfect display of corporate social responsibility. There are no private shareholders in the bank’s structure. Taylor further explains that the bank follows a triple bottom line model-social justice, environmental well-being, and financial sustainability. Eliminating private shareholders keeps the bank dedicated to this model of corporate social responsibility.
A Culture of Disruption
According to Taylor, the banking industry is ripe for disruption. She states honestly that traditional banks find Beneficial State Bank irrelevant. Her hope is that this will not last long. One strategy is to reach out to the bank’s depositors. Taylor wants to teach depositors that they do not have to support practices that are harmful to them. Her bank alerts people to the power they hold over the banking system. Taylor believes many large, established banks will find this new perspective threatening.
Another way Beneficial State Bank disrupts the system is by lending and providing credit to constructive businesses and nonprofits. These include groups with goals of affordable housing, sustainable food, community development, and clean tech. The bank also lends to women and minority owned businesses, and businesses that practice upcycling or recycling.
A True Model
Beneficial State Bank is a true model of corporate social responsibility. Every decision they make is in the interest of low income beneficiaries, not private stakeholders. They practice a triple bottom line as part of their purpose. They remain sustainable and viable while also serving the public. They are poised to disrupt the banking industry by shifting the balance of power back to depositors. Beneficial State Bank teaches customers that they do have choices about what their money is used for and what goals they will support.
Kat Taylor, the co-founder and co-CEO of Beneficial State Bank, gives an advice that “culture matters” in Social Venture Network.
An interview of Kat Taylor, the co-founder and co-CEO of Beneficial State Bank, shares their aim to change the banking system for good along with that they will build a very good model and execute it. She also shares her views on a male-dominated and abusive financial system that is ripe for disruption.