THERE ARE various ways for banks to be corporately responsible. The Spanish banking house Caja Navarra Savings Bank (CAN) has launched a business model called Civic Banking, which enables the bank’s customers to decide how the profits made from their money will be used. In this way the bank has created a social network, linking customers to social projects in the community and abroad.
Teresa Sádaba, the director of international relations at Caja Navarra, attended the sixth Annual Conference on Corporate Responsibility organised by the Pontis Foundation and the Business Leaders Forum in Bratislava between May 13 and 14 and introduced the Civic Banking model. The Slovak Spectator spoke with Sádaba about it.
The Slovak Spectator (TSS): Can you please explain the concept of Civic Banking?
Teresa Sádaba (TS): Civic Banking is a unique model of transparency and participation involving customers and non-profit organisations. Within it, customers decide what will be done with the profits made from their money.
Each customer receives an annual profitability statement indicating the profits earned from their relationship with the bank. Afterwards customers choose where to direct 30 percent of those profits among a list of 3,000 civic projects worldwide.
Civic Banking creates a win-win situation in which customers are empowered to make decisions, non-profits raise money at no cost to citizens and the bank gains more customers.
This pioneering approach by Caja Navarra has redefined banking. Caja Navarra is a bank where it is the clients who have the rights and the bankers the obligations. We have changed the traditional paradigm.
TSS: What inspired Caja Navarra to adopt the concept of Civic Banking?
TS: It was because we thought, seven years ago, that the days of traditional banking were ending.
It was not sustainable to have a financial system where the citizen is always underestimated. We thought we could create a different bank, working with society, not against society.
TSS: What benefits has Civic Banking brought to Caja Navarra?
TS: Adopting this model has given us very good results in the economic and the social sense.
The Caja Navarra group closed 2008 with an operating profit of €218.7 million, an increase of 9.17 percent on last year's figures. In 2002 we were a medium-sized, undifferentiated Spanish savings bank. Now we are in the top 10 in most rankings.
In social terms, we are linked to a network of one million people. Thousands of customers have started to decide, to present their own projects and to get involved in them. The customers responded and changed the direction of Caja Navarra’s social project work.
TSS: Can the concept of Civic Banking also be beneficial for entrepreneurs?
TS: Of course. We have a specific programme for them called EURECAN, a programme to support and to give advice to entrepreneurs, with more than €50 million to provide financing and 1,421 business projects.
TSS: Could the concept of Civil Banking also work in Slovakia?
TS: Yes, we think so, as it is an important concept to involve society in the financial system and to grow together.
