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Coming Out of the Niche? Social Banking in Germany: An Empirical Analysis of Consumer Characteristics and Market Size

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  • Kathleen Krause

    () (Alanus University of Arts and Social Sciences)

  • Dirk Battenfeld

    () (Alanus University of Arts and Social Sciences)

Abstract

The social banking market constitutes a small but rapidly growing submarket of the global banking sector. Due to an explicit commitment to sustainability, social banking is a segment of banking services which is not exclusively focused on economic performance criteria, but pursues ecological and social goal dimensions on an equal footing. Information on the number and reachability of potential social banking customers is essential for social banks to further promote sustainable consumption in finance. In scientific research, social banking is considered a relatively new field, still lacking empirical analyses regarding the market size and specific consumer behaviour. This study addresses the research gap by generating first insights into the German social banking market. Based on an online survey using an adaptive conjoint analysis, a large data set covering 3537 respondents was compiled. Sample 1 comprises 2896 respondents who are customers of three major social banks in Germany. Sample 2 covers the remaining 641 respondents who represent the German adult population and exclusively buy from conventional banks. Logistic regression modelling reveals that social banking customers differ significantly from their conventional counterparts regarding several socio-demographic, behavioural and psychographic factors. In comparison with conventional banking customers, social banking customers tend to be younger, higher educated and located in larger places of residence. Contrary to existing research on socially responsible investors, they are male to a higher proportion than female. Moreover, social banking customers demonstrate stronger sustainable buying patterns and weaker preferences for financial, but stronger preferences for social return than conventional banking customers. The results further indicate a considerable untapped growth potential for social banks by uncovering a market size ranging between 10 and 26% of the German adult population. Finally, suggestions for marketing strategies and future research are given.

Suggested Citation

  • Kathleen Krause & Dirk Battenfeld, 2019. "Coming Out of the Niche? Social Banking in Germany: An Empirical Analysis of Consumer Characteristics and Market Size," Journal of Business Ethics, Springer, vol. 155(3), pages 889-911, March.
  • Handle: RePEc:kap:jbuset:v:155:y:2019:i:3:d:10.1007_s10551-017-3491-9
    DOI: 10.1007/s10551-017-3491-9
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    Cited by:

    1. Simon Cornée & Panu Kalmi & Ariane Szafarz, 2020. "The Business Model of Social Banks," Kyklos, Wiley Blackwell, vol. 73(2), pages 196-226, May.
    2. Nikolas Höhnke, 2020. "Doing Good or Avoiding Evil? An Explorative Study of Depositors’ Reasons for Choosing Social Banks in the Pre and Post Crisis Eras," Sustainability, MDPI, Open Access Journal, vol. 12(23), pages 1-26, December.
    3. Paweł Dec & Piotr Masiukiewicz, 2021. "Socially Responsible Financial Products as a Contribution of Financial Institutions to Sustainable Development," Sustainability, MDPI, Open Access Journal, vol. 13(6), pages 1-10, March.
    4. Juan J. Nájera-Sánchez, 2019. "A Systematic Review of Sustainable Banking through a Co-Word Analysis," Sustainability, MDPI, Open Access Journal, vol. 12(1), pages 1-23, December.
    5. Simon Cornée & Marc Jegers & Ariane Szafarz, 2021. "Feasible Institutions of Social Finance: A Taxonomy," Working Papers CEB 21-001, ULB -- Universite Libre de Bruxelles.

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