ZEW Survey Among Financial Market Experts - Trend Goes Towards Social Banking

Banks with a business strategy aiming at social, ethic and ecological goals are going to increase their market shares in Germany. This is mainly due to an increasing public interest in social and ecological topics. Another reason is the uncertainty of bank customers due to the financial crisis and the resulting mistrust towards investment strategies of traditional banks. These are the findings of the latest survey among 236 financial market experts, conducted by the Centre for European Economic Research (ZEW) in Mannheim.

Social banks have already had high growth rates in the last few years and were able to increase its market shares. According to about 43 percent of financial market experts participating in the monthly ZEW survey, this trend is going to continue in the next few years. One third of experts on the other hand hold the opinion that social banking is only a short trend. Less than 25 percent of experts did not state their opinion on that matter.

The most important reason for the increasing importance of social banking is the increasing mistrust of customers towards banks. More than 80 percent of experts think that social banks have benefited from this mistrust in the last few years. Around two thirds of experts consider the increasing interest of costumers in social and ecological topics an important success factor of social banking. Moreover, the experts hold the opinion that the costumers' trust in social banks, the good reputation of these banks and the high transparency encourage these business models. According to the financial market experts, social banks take lower risks because they make long-term investments.

Despite the obvious success of social banks, about 43 percent of experts are not convinced that other banks are going to change their business strategy and products towards ethic, ecological or social goals in the future. The experts think this is because ethic and ecological products often have a low return and are not attractive for price-conscious customers. However, 57 percent of experts think it very likely that other banks are going to follow the example of social banks and link their business strategy more strongly with ethic, ecological or social criteria in the future.

For further information please contact

Matthias Köhler, E-Mail: koehler@zew.de