Seven Years On From The Financial Crisis: Optimism in Africa but CSR Ratings Deficit Elsewhere

In our first blog post in this series, we looked at concerns about trust and confidence in banks and financial institutions showing no signs of diminishing more than seven years on from the financial crisis. In this blog we’ll explore how the industry has lost touch with its societal role in different parts of the world.
For nearly 15 years, GlobeScan has been tracking global public opinion of how well the financial services sector fulfils its responsibilities to society. The following chart shows net ratings for performance across 19 countries – this is the percentage of people saying the industry’s CSR performance is above average (compared to other types of companies) minus those who say it is below average.

The chart shows a steady decline in net responsibility / net performance since 2001. The sharpest fall occurred in 2009 after the financial crisis, but there has been little improvement since then. This year we recorded a slight decline in net responsibility of banks and finance companies – while nearly every other sector included in our survey received higher ratings.

However, perceptions of responsibility and trends vary considerably across different regions, and the above chart shows some of our market data. In the US, UK, Germany, and Spain, responsibility ratings have plummeted in the past 15 years, although there are signs that the tide of public opinion is turning in some of these markets. Perceptions in Brazil have worsened significantly in the past year. China also stands out as a market where increasing numbers are giving negative ratings to a sector they see as poorly regulated, resulting in net responsibility dropping from +58% in 2001 to +3% in 2015. Ratings remain highest in African countries and this is where the sector has a clear opportunity to define its value to society, unencumbered by trust issues.
The situation with African economies, and particularly South Africa, is quite different from those in Europe and in North and South America. For example, the financial crisis itself was late to reach South Africa in comparison to most Western developed economies and its banking system was one of the few internationally that emerged relatively unscathed from the crisis.
As part of our GlobeScan Dialogue series of conversations with leaders, I spoke with Gail Klintworth, Group Customer Director and Responsible Business Lead at Old Mutual plc, about the industry’s opportunities in Africa. Gail explained that she sees “the financial services industry playing a positive role in socioeconomic and environmental development across Africa…. The potential is huge, but doing it the right way is going to be critical”. She strongly believes the opportunity in Africa is to establish and define a meaningful societal role, around accelerating economic inclusion, while ensuring that “economic development isn’t at the expense of the environment or people.”
In our third and final blog in this series we will identify lessons from other sectors, pathways to trust, and next steps for the industry.