Several national retail brands have looked to appeal to consumers through socially conscious initiatives. Up until now, the extent of large banks’s ties to social responsibility has been to limit investment in certain companies and to encourage investment in others.
This initiative by a niche bank goes a step further. Online Bank Aspiration has launched a new debit card that will give customers 3% to 5% cash back when they shop at what the bank considers socially responsible companies. The companies include household goods, eyeglasses, and clothing stores.
The debit card is likely targeting millennials who not only care about avoiding certain brands when it comes to buying but also are looking for meaning in their work and all aspects of their lives. Aspiration CEO Andrei Cherni stated, “It provides the encouragement people need to vote with their dollars. We want to find every way we can to help people line up their money with their morals.”
Credit card cash programs are popular with consumers. Both Bank of America and JP Morgan Chase have similar programs that reward customers for shopping at certain stores. While some of the stores are noted for their social mission, others are simply strategic partners with the banks. Aspiration’s initiative focuses exclusively on the causes that the retailers are interested in, from eyeglasses for the poor to animal shelters.
However, for established community banks as well as national banks initiatives like this have some potential communications issues. For instance, California based Aspiration has more than two million customers and they promise their customers that they will not use the profits in certain ways such as fossil fuels. If a regional bank has a substantial group of customers whose income is dependent on that specific industry, that can be bad press for the bank.
Another potential issue could be religious in nature. Certain brands such as Hobby Lobby are well known for providing great benefits to their employees but are equally associated with conservative values. A bank can win with some customers by partnering (or not partnering) with Hobby Lobby and can lose with others.
New brands like Aspiration have a competitive advantage as they are only four years old and made this a focus since the launch of the brand. The bank has its own “impact scores” for companies, and the banks were aware of the business model from the start. It is more difficult for an established brand with shareholders to compete by using this strategy.
- Wells Fargo’s Past Misdemeanors Weigh on PPP Support
- How Fintechs Are Helping Deploy Small Business Loans
- MVB Bank Buys $140m Deposit Book from Insolvent First State
- Midsize Banks Lead Way on Small Business Loans, Big Banks Follow
- How to Become an SBA Lender for the CARES Act’s Paycheck Protection Program