Co-operatives banks have specific values: solidarity, self-help, fighting against exclusion, social and environmental concerns, resilience, proximity, trust and governance. These values are embedded in the ways co-operatives do banking, explaining their strong commitment to societal responsibility.
1-Trust: The keystone of co-operative banking
Trust is the key of the relationship between a bank and its customers. For co-operative banks, this means that their operations are set to serve the customers’ interests. This is possible because profits maximization isn’t the primary goal.
2-Governance: Members control their bank
Customers and members of co-operative banks are represented in the bank’s governance structure through participation on boards, membership councils, etc. This ensures the members’ interests are the top priority. By becoming a member, customers can influence the banks’ policies. At a local level, they provide advice about branch services and sponsorship activities. At a national level, membership is ensured by local member banks or regional banks in certain countries, such as France and Germany. These institutions collectively own the co-operative. Diversity brought through member ownership entails a consensus-driven approach and prevents a strong focus on only one stakeholder.
3-Resilience: Solid adapting to changing circumstances
Co-operative banks have a lower risk appetite and a long-term orientation. They can also maintain higher capital reserves. Thanks to their local roots, co-operative banks anticipate and adapt to local circumstances. Co-operative institutions can adapt to changing circumstances and re-invent themselves more so than other banks.
4-Proximity: Closest to the customers
Local co-operative banks usually have a good physical proximity, thanks to their dense networks of branches. They are part of the community, understanding their customers and speaking their language. Proximity is further reinforced through the participation in numerous social networks and by actively supporting the local communities.
5-Social commitment: Supporting and operating nearby
As local contributors, co-operative banks are part of the economic and social environment of their customers. They naturally take initiatives, aiming to improve the clients’ environment and provide financial services. A proportion of the banks earnings are reserved to promote economic initiatives and include local society. A good economic and social climate benefits the customers and so the bank. Social commitment therefore means investing in the customer. In doing so, co-operative banks have a tradition of fostering the development of local communities.
Most co-operative banks’ projects are small-scale local initiatives, taken by members. Co-operative banks support them through financial funding, as well as access to their networks and unpaid services of employees. They support programs ranging from microfinance to financial education of groups experiencing long-term unemployment.
6-Solidarity: Emphasising the common good of society
Co-operative banks have traditionally promoted entrepreneurship at the individual level, consequently impacting the common good of society. Moreover, co-operative banks play a key role in local and regional development by reinvesting capital at the local level.
The mutual guarantee systems among co-operative banks provide another form of solidarity at two levels. Firstly, capital is made available for other people and companies that have an economic need; the local constituents have the opportunity to support each other. Secondly, co-operative banking systems provide mutual guarantees in case of default.