© F r a n k f u r t – S c h o o l. d e Responsible Banking © F r a n k f u r t – S c h o o l. d e

2 Appropriateness Providing to clients the services they need Transparency Clear definitions of terms and business behaviour Principles of responsible banking Accountability Instil personal responsibility and institutional reliability

© F r a n k f u r t – S c h o o l. d e 3 Legal and market environment Overall consumer protection Fair contract rules Minimum information requirements for clients Uniform disclosure standards Client complaint system - Ombudsman Regulatory authority for financial sector Deposit insurance system Transparency of indebtedness levels: credit bureau Enforcement & control of compliance Informed and active press and media

© F r a n k f u r t – S c h o o l. d e 4 Advertisements from selected financial institutions

© F r a n k f u r t – S c h o o l. d e 5 Responsible banking has the following dimensions emphasis on financial literacy long-term relations Products Responsible banking Lending Methodology Delivery Channels Saving Methodology Customer Relationship savings, loans & insurance transparent terms & conditions fair & transparent contracts close to the customer: physical & social instil thriftiness instil regular savings pattern building trust emphasis on repayment capacity appropriate repayment plan exclusion list

© F r a n k f u r t – S c h o o l. d e 6 Doing good … and increasing profits Responsible banking is part of quality management Helps increasing profits Satisfied customers undertake repeated transactions use multiple financial services have long-term banking relations attract new clients through mouth-to- mouth progaganda Financially literate customers can communicate their financial needs more easily take better–informed decisions and often show higher levels of accountability

© F r a n k f u r t – S c h o o l. d e 7 Financial institutions`responsibility dimensions Staff: Committed and ethically motivated staff Code of conduct Staff training emphasizes responsibility dimension Management: Product lines and financial methodology Performance and incentive system Monitoring system Sanctions of unethical behaviour, e.g. fraud Owners: Social values as part of the investment proposition Long-term commitment

© F r a n k f u r t – S c h o o l. d e 8 Thank you for your attention! Dr. Karin Derflinger Sonnemannstrasse 9-11 D Frankfurt am Main, Telephone Fax