Linking corporate social responsibility to trust in the banking sector: exploring disaggregated relations

Abstract

PurposeThis paper has two purposes. First is to operationalise the concepts of corporate social responsibility (CSR) and trust in the context of a developing country, the Democratic Republic of Congo (DRC). Second purpose is to test in a disaggregated perspective the impact of each CSR dimension on trust.Design/methodology/approachData were collected from 264 customers of six banks and processed with exploratory, confirmatory factor analysis and structural equations using LISREL 9.1.FindingsCSR is found to have five dimensions: legal responsibility, social needs responsibility, product responsibility, environmental responsibility and employee responsibility; trust is found to be a three-dimensional construct: integrity, compassion and partnership. Each CSR dimension has a positive impact on customers' perception of trustworthiness.Research limitations/implicationsReliability of trust is not high enough, suggesting the need to deepen research in order to find a more adapted CSR scale for banks. The smallness of sample size might have influenced the robustness of our psychometric results. CSR and trust relationships might be analysed in a more enriched framework including service quality, reputation and banks' employee performance as moderating variables. This paper has measured the two concepts from the customers' perspective only. However, both CSR and trust are best understood in a stakeholder perspective. So, it might be insightful to extend future research in a stakeholder orientation perspective.Practical implicationsBanks from developing countries are also concerned with CSR and should invest in it. Clearly, each dimension of CSR should receive enough importance if Congolese banks are to recover their customers' trust. The findings of the study also suggest that banks' customers are aware of the necessity for banks to comply with the country's legislation. Non-compliance can have severe influence on customers' trustworthiness to banks.Social implicationsFinancial institutions are generally evaluated through financial indicators. The findings suggest that banks customers and other stakeholders begin a shift towards requiring their banks to invest in social and environmental activities in order to improve their local milieu. These aspects are still very neglected, or adopted only as marketing strategies to improve image, without a true willingness to be socially responsive.Originality/valueThe two concepts are measured in a context where they did not receive enough importance (developing country), hence providing new knowledge in the field. Further, a disaggregated approach allowed understanding the way each CSR dimension impacts trust, which had not been the case in previous research.

The role of customers’ awareness towards the sustainable development goals (SDGs) of banks on their behavior

“…It has been shown that, in the case of negative information, the negative effect will be evident in consumer attitudes, who are more sensitive to negative information than in the positive one (Sen and Bhattacharya 2001 ). The findings are in line with previous studies of the CSR and sustainability literature for the banking sector (Bugandwa et al 2021 ). They identified that some strategies of CSR play a critical role in the customer trust such as legal compliance, social norms, product responsibility, environmental protection, and employee relations.…”

Service beyond the status quo: the ripple effect of corporate social responsibility and internal marketing on employee's customer-oriented behavior

“…With the increasing number of banks implementing CSR programs, CSR has been considered a prominent concept in academia. However, the majority of CSR studies have focused on "external stakeholders" (customers), and less attention has been paid to "internal stakeholders" (employees) (Bugandwa et al, 2021). Furthermore, except for Kim et al (2016), who conducted research in a casino setting and called for more studies to examine the effects of both CSR and IM on service employees simultaneously, no study has empirically examined the simultaneous effects of both CSR and IM practices on banking employees' job outcomes.…”

“…With the increasing number of banks implementing CSR programs, CSR has been considered a prominent concept in academia. However, the majority of CSR studies have focused on “external stakeholders” (customers), and less attention has been paid to “internal stakeholders” (employees) (Bugandwa et al. , 2021).…”

Social Responsibility Practices as a Factor in Economic Benefits

“…Investor confidence has been affected worldwide by multiple cases of financial frauds observed in the last decade in world-renowned companies (Bugandwa et al, 2021). Under this environment, companies try to develop and implement policies and strategies to grow, consolidate and sustain themselves over time (Arrigoni, 2019).…”