Fiare Banca Etica

The ethical bank for people.

Monday 12 June 2017, by Aina Estrany, awatif hamouch, Mehreen Qaisrani

A. The main facts about the activities of the company.

Fiare was founded in 2003 and in 2013 through the integration of Fiare and Banca Popolare Etica, Fiare Banca Etica was created. The idea behind it was not to collect the money first and then look for projects to finance, but to find first what was to be financed and then to find people who could commit to lending to the social enterprise.
Their main activities are providing individuals with current and savings accounts. For Companies and organisations they provide management of day-to-day operations, fundraising activities or treasury management.
They follow the Code of Ethics which represents a "Constitution" or "social contract" with the people involved in Ethical Banking. It defines the ethical horizon in which the Bank operates, establishing criteria of equality and justice, reference values, general principles and guidelines that the bank adopts in its relations with stakeholders.

B. The Ethical challenges this company is addressing.

There are many ethical challenges in the banking system which have increased more since the financial crisis that started in 2007. Traditional banking, as we know, have focused their main activities on speculation and investments, which are occasionally not morally accepted.
In the last few years, the main argument against the financial sector is that banks should offer a service and not with business objectives of making profits. This is a challenge that banks must face.
There is a mentality change about banks, now their customers are doubtful about what banks do with their money, so trust in banks has been lost. How to recover this lost trust is another challenge that traditional banks and new banks must address.
For people to gain trust again in the banking system it is essential to have transparency so customers know what their money is being used for. Also, they are asked for their social responsibility, they are an important agent for most of the economies, so their decisions have a great impact.
Fiare is facing all of these challenges too, even though it is an ethical bank that is built on ethical foundations. They need to be trusted by their customers and the society. Also Fiare has well-defined values and guidelines so their impact of their decisions are positive.

C. What makes you believe this company is really ethical and why you trust it?

For firms to be seen as an ethical Organization is difficult. But Fiare and other similar Banks have been built upon ethical Foundations.
Their foundations and objectives are clear. After investigating their main activities, we found that the bank is having a positive impact on society. Fiare finances selective projects, only those that contributes to social and environmental progress and denies those ones that cross their ethical limits, just as army related or child labour.
Also, they’re contributing to a new path for banking, the objective for Fiare is not reaching economic benefit but reaching social development. Even it’s a small bank they’re convinced about their work and their contribution on this new path.

What makes fiare a trustful bank is their transparency, from first entering their webpage all the information is available to the public. The information disposed ranges from financial statements to their ethic codes for decision making. All of the funded projects are published on the website.
As we have found what Fiare publishes as ethical codes is what they really do. It’s a bank to trust as they are honest and clear.

D.The possible challenges facing the company in the future and how you think this company may improve.

There are three main challenges that Fiare will be facing in the future: how to get more clients, how to grow in a sustainable way and continue with the same structure, and how to offer their customers the same advantages as traditional banks.
First, we have to have in mind that is not always easy for this type of ethical business to survive for a lot of years. But Fiare banca have proved that they can do it but they still have a long way to go and if they want to continue they need to build a strong network of customers and keep growthing. They have to try to reach more people and become more visible because when people look for a bank, they don’t normally find this type of banks. So they have to be more visible for new customers.
The second challenge is if they grow they have to do it in a sustainable way and they have to make sure that their structure doesn’t break. It’s easy to control things when they are not too big but if they are planning to grow, they have to be careful how they do it. One of the main problem will be to continue with the same structure, the structure is assemblies that are present in every territory and decisions are taken there. Assemblies are easy to control and perfect to work if they are small. Maybe they will have to change the structure, meaning that they will lose one of the reason that makes this bank special.
The last one is probably the most important because without solving this problem they can’t solve the others. They need to offer to the customer the same advantage as the traditional banks. Right now you can open an account in the bank, but you are so limited with what you can do with your money. You have a few options like a current account, fixed deposit and have a credit card. But you can’t take cash without commission, ask for a loan, the money doesn’t have interest, or ask for a mortgage. So in general it isn’t very practical. They need to become more practical if they want to become the bank for every individual.

Bibliography

http://www.fiarebancaetica.coop/

Location: Bilbao (Spain)

Sector: Financial and insurance activities

Official website: http://www.fiarebancaetica.coop/

Key figures:

Spain and Italy
39.899 shareholders
Capital: 59 million €
50.482 customers
285 workers
905 social projects financed

Nbr. visits: 126