TAKEAWAY: Retail banks should offer more than service and convenience. Lloyds Banking Group, that has the UK’s largest retail bank, shows how community banking can help ignite a virtuous cycle of positive, widespread social change.
In 2012, Britain, like many other countries, was facing an uneven recovery from the global financial crisis. Big business was doing well. Families, communities, and smaller businesses—not so much. Millions of UK families faced (and continue to face) lagging employment opportunity, a shortage of affordable housing, real discrimination and exclusion, and insufficient capital investment in neighborhoods and new businesses. The effects go beyond economic hardship, tearing at the social fabric that binds a democratic society.
To Lloyds Banking Group, Britain’s largest retail bank, the tensions inherent in economic inequality meant that the traditional concept of corporate responsibility was no longer fit for purpose. A new concept was needed, one that matched the strengths, skills and resources of the bank to the most urgent needs at hand. Lloyds, as an institution serving hundreds of smaller communities in England and Wales, believed that its broader purpose could be woven tightly into the fabric of its commercial purpose. Corporate responsibility would no longer stand “alongside” business purpose. It would be fully integrated into how Lloyds would operate, whether in a city, town or village.
Lloyds launched the Helping Britain Prosper plan in 2014. It is sharply focused on some of the most important social, economic and quality of life challenges facing people individually and the UK as a whole.
The word “some” is important here. In listening to its communities, Lloyds determined where it could have an outsized, beneficial effect of society, in ways that capitalized on Lloyds longstanding strengths. The original 28 metrics that made up the backbone of Helping Britain Prosper plan were public commitments to help Britain’s households, businesses and communities..
The choice of the word “prosper” in the program’s title was deliberate. Widespread, inclusive prosperity is a key to social stability, and vice-versa. The concept of “social prosperity” is now being used to measure the quality of people’s lives at the local level, as opposed to overwhelming, impersonal numbers such as GDP and durable goods orders. Lloyds evolved the definition of the term ‘to prosper’ based on a number of external benchmarks, including the Legatum Prosperity Index, the OECD ‘Better Life’ index, and UK Quality of Life indicators. This ensured that Helping Britain Prosper would maintain focus on these activities, setting out clear commitments to help measure progress.
From a long list of potential actions and activities, the plan was focussed on a number of key themes:
The social purpose of the bank is firmly connected to addressing the UK’s changing social and economic challenges. Helping Britain Prosper focuses the bank’s skill and scale to make the UK economy more productive, more agile and fairer.
The plan went through detailed preparation to make certain that it was transparent and that its results were rigorously measured. Targets and metrics were established, and subject to an annual independent certification process. There was also an independent panel of stakeholders to both review the reporting and act as advisors.
The rigor and transparency in public reporting sends a strong statement to the hundreds of communities Lloyds serves and is a North Star for the bank’s 65,000 colleagues. The precision and detail of reporting also demonstrates to investors that the bank is focused on long-term value. The rising tide of inclusive prosperity raises all boats.
Since its launch, Helping Britain Prosper has seen changes with the times. However, the global pandemic affirms the need for a more resilient society, one that leaves no one behind. A wealthier, more inclusive society is ultimately a healthier, hardier one, where hope becomes a driving concept, not an abstract one.