1. Thank you to our generous Learning Event sponsors:
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2. The Universal Standards for Social Performance Management
…a comprehensive manual of best practices to help financial service providers put clients at the center of all strategic and operational decisions and align their policies and procedures with responsible business practices
Good Morning – I am Laura Foose, Director of the Social Performance Task Force and one of your hosts for the 2018 Learning Event on Customer Centricity. We are delighted that you could join us today for our task force pre meeting. During this day each year, SPTF members and interested participants come together for trainings or working group activities – it is a chance to take a deep dive into issues that are central to our workplan and which we work on with many of you via and webinars throughout the year – this is what makes us a task force – working on important deliverables together that can help advance the state of practice. On your chair you have an update on the main activities that SPTF was engaged in over the last year --- and in our plenary this morning you will have a chance to learn about the central work that we are doing on standards development and in particular let you know about the work with are conducting with banks to see how they use social performance in their work.
This learning event is about customer centricity – which has been fundamental to the work of the SPTF from its origins. The centerpiece of the SPTF’s work is the Universal Standards which are a set of management practices that put clients at the center of all strategic and operational decisions and align their policies and procedures with responsible business practices.
For those of you who are new to our meeting, I will spend two slides on explaining the Universal Standards.

3. Resource for achieving social goals
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The Universal Standards bring together best practices implemented successfully throughout the industry in one comprehensive manual—to clarify and standardize social performance management.
The Universal Standards are set of management practices that apply to all financial service providers that have a social objective.
The Universal Standards spell out all of the essential practices in SPM, clearly showing what an institution needs to do to manage social performance effectively. The manual is also helping to standardize practice across the industry, as it is a common set of global best practices that all institutions can use to guide their work.
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They were created by and for people in the field:
financial service providers, networks, investors and other stakeholders around the world identified the need for a common resource and worked together to create it.
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The Universal Standards are a resource for financial service providers seeking to achieve social goals. They do not dictate what the institution’s goals should be, but rather help identify the best way to achieve them.
Resource for achieving social goals
Comprehensive manual of best practices
By and for people in the field

4. There are 19 standards, organized into six dimensions.
The Universal Standards manual contains 19 standards, and they are organized into these six dimensions.
1. Define and Monitor Social Goals – THE PROVIDER HAS A STRATEGY TO ACHIEVE ITS SOCIAL GOALS. - THE PROVIDER COLLECTS AND DISCLOSES ACCURATE CLIENT-LEVEL DATA SPECIFIC TO ITS SOCIAL GOALS
2. Ensure Board, Management, and Employee Commitment to Social Goals – what is the leadership culture of the organization – how do you institutionalize the objectives of the organization?
3. Design Products, Services, and Delivery Channels That Meet Client Needs and Preferences – a lot of what we will be talking about in this conference is on dimension 3
4. Treat Clients Responsibly (integrates all Smart Campaign standards of client protection)
5. Treat Employees Responsibly (based on ILO guidance on fair labor standards)
6. Balance Financial and Social Performance
Taken together, the standards found in these 6 dimensions describe all of the strong SPM practices that are currently known and accepted by the industry. What we do in the evoloution of the standards work that we do and that I will turn to next is to document and learn how different financial service providers are carrying out these concepts, and sharing that with others so that they can learn from practice.

5. Evolving to Fit a Changing Industry
SPTF wants to make sure the standards evolve to fit a changing industry.
CDC, who is with us on the panel today, is supporting SPTF’s work in making sure that the standards apply to all types of financial service providers – and as the types of providers expand – we like to evaluate HOW the standards and practices apply and what more we need to do to learn about and reflect good practice. We are working to expand our understanding in three areas in particular over the next year – with banks, fintech, and SME finance.
Our focus on the panel this morning is to talk about how the standards apply to mainstream banks and I will raise some of the questions we are getting from banks as they consider implementing this work.
Banks
SME finance
Fintech

6. Plenary: Mainstreaming SPM for Banks
We are fortunate to be joined today by two leaders in the SPTF community – Equitas and CDC Group.
Vasudevan, is the Managing Director of Equitas Small Finance Bank. Equitas is an example of a bank that has successfully kept a dual focus on financial performance and customer well being – both before as an MFI, and and now as a small finance bank. SPTF has documented their practices quite extensively in the Implementation Guide for the Universal Standards.
Gaurav Malhotra is Director of Financial Institutions at CDC Group.
SPTF has been working closely over the past year with CDC Group which supports evolution of the Universal standards work .
Gaurav will provide an overview of their comprehensive view on impact and social performance that involves trying to understand the business model of each investee and identifying the potential for impact on a case by case basis. Their approach includes multiple dimensions from the universal standards and other responsible investing guidelines.
Monday, February 19, 2018

7. Balance Financial & Social Performance
Board & Management Commitment to Social Goals
I would like to focus our discussion in particular on Dim 2 & 6 as these reflect the bank’s commitment to client centricity.
What role does leadership play in maintaining a customer-first approach to banking?
What is the business case for social performance, are there financial tradeoffs for banks that treat customers and employees responsibly?

8. Dimension 2: Board & Management Commitment to Social Goals
1. The Board holds management accountable to the mission and social goals.
2: Management is responsible for implementing the social strategy.
3: Employees are recruited and evaluated based on both social and financial criteria.
Essential Practice 1. The Board holds management accountable to the mission and social goals.
Key concepts:
The board uses social performance data to understand client progress and track whether the provider is meeting its social goals. They hold the CEO accountable for meeting the provider’s social goals.
The board is responsible for preserving the provider’s social mission during times of institutional change—such as transformation, introduction of new investors
Essential Practice 2. Management is responsible for implementing the social strategy.
Management creates a social strategy which outlines the institution’s social goals and HOW they will achieve them.
Management analyzes and addresses social risks such a poor product fit, client overindebtedness, and staff turnover.
Essential Practice 3. Employees are recruited and evaluated based on both social and financial criteria.
Key concept: The provider hires people who are committed to their social goals, and then incentivizes them not only to achieve financial goals, but social goals as well, such as recruiting customers from the target market, and achieving strong customer satisfaction.
So lets start with some questions to Vasu related to dimension 2 --

9. Dimension 6: Balance Financial & Social Performance
1. Set sustainable growth rates.
2: Align with board, investors, lenders on the social goals.
3: Set responsible prices.
4: Compensate management in line with social goals.
Essential Practice 1. Set sustainable growth rates.
Key concept: Growth targets should be balanced, meaning that the provider should have the capacity to grow without sacrificing the customers’ wellbeing or customer service.
Essential Practice 2. Align with board, investors, lenders on the social goals.
Key concepts:
Define a policy on profits and their use 6B.2 Align expectations upfront
Essential Practice 3. Set responsible prices.
Key concept: Any discussion of pricing gets complicated very quickly, but essentially what we care about here is that price are affordable for clients and competitive in the marketplace while also allowing the provider to be sustainable in the long-run, b/c that’s in the best interest of the clients.

10. Call to Action Help us with our research!
Are you a bank implementing SPM practices? Share your experience with us so we can document it for others to learn
Let us know your opinion about which practices apply or not to your operations
Let us know which areas are difficult to implement and why
Call for banks that want to share their practices/experiences with us.