UGB264: Business Ethics, Responsibility, and Sustainability in Banking

This report delves into the critical aspects of business ethics, corporate responsibility, and sustainability within the banking industry. It begins by outlining the key challenges related to corporate responsibility and sustainability, such as regulatory pressures, public scrutiny, and the integration of ESG factors. The report then analyzes best practices, identifying ethical and moral issues, including the need for transparency, effective training, and addressing stakeholder conflicts. The report also examines the importance of digital transformation, data analytics, and redesigning operational models to enhance customer success and efficiency. Finally, the report provides recommendations for the banking sector, emphasizing the need for ethical conduct, stakeholder engagement, and sustainable practices to ensure long-term success and societal well-being. The report is based on secondary information and emphasizes the importance of ethical conduct and responsible business practices in the banking sector.

Business Ethics Responsibility and
Sustainability

Contents
INTRODUCTION...................................................................................................3
1 Discuss about the key challenges relating to corporate responsibility and sustainability
within banking industry...............................................................................................................3
2 Analyse the best practice within banking industry, identifying the ethical and moral issues.. 5
3. Recommendations for business in banking sector...................................................................8
CONCLUSION........................................................................................................8
REFERENCES......................................................................................................10

INTRODUCTION
Business Ethics can be defined as implementing appropriate policies and practices that
can be justified as right in context of problems that are faced by businesses. Business Ethics
examine and apply ethical principles and moral in context of problems and issues that emerge in
business environment. This applies to all aspects and functioning of the business and all the
businesses irrespective of their nature and size should follow ethics in their businesses. In order
to ensure that all businesses follow their responsibility towards society and its different
stakeholders corporate social responsibility has been developed so that businesses can fulfil their
responsibility towards different stakeholders and society (Ferrell and et.al., 2019). Sustainability
of the business is a wider aspects in which businesses are required to maintain their sustainability
as well as of sustainability of the environment. This report will discuss about ethics,
responsibility and sustainability of the business. In this report banking sector has been
contextualised. This report firstly will discuss about challenges of corporate responsibility and
sustainability and followed by this best practice in the industry is being considered in banking
industry regarding ethical and moral issues. Banking industry and sector is now using techniques
in several ways in which users can easily complete their transactions and also are being availed
several other services of the banking. In this using technology for provide banking services has
contributed in enhancing transparency for the customers and technology also contribute in
sustainability of the banking sector. Implication of technology on banking services is also visible
in form of cost and this contribute in financial sustainability of the banking sector and
organisation operating within banking sector.
1 Discuss about the key challenges relating to corporate responsibility and sustainability within
banking industry.
Corporate social responsibility have become main stream in enterprise activity. In
currently, it has rapidly increasing the business opportunities which investing in social as well as
ethical initiatives. Generally, CSR, sustainability that are considered as being method or
technique which help for providing the best way in which balancing economic, environmental
and social practices (Crane, Matten and Spence, 2019). In order to fulfil the need and
requirement of stakeholder expectations. Within banking industry, it has risen in enterprise while

implementing the CSR practices, mirrored by social responsible for investment. (SRI) Social
responsible investment is consider as discipline which mainly consists of environment as well as
social perspectives. SRI is based upon the premise that usually banks adopt the new ESG
practices in order to meet the specific expectation of other investors.
In UK and US, there are 500 organizations spend $15.2 billion a year on the corporate
social responsibilities and sustainability (Louche, Busch and Marcus, 2019). At that certain level,
banking industry has faced the issue because of regulatory pressure and public scrutiny. The
record level of penalties and fines as result of banking malpractices. As a result, it may have
begun the integration with CSR factors within long term investment strategy in banking sector.
Afterwards, they have served as foundation not only focus on providing new services. It also
ensured that better management of risk in banking industry.
For banks service, the integration of ESG is costly in term of financial investment and in
relation to organizational practices. In context of financial perspective, it can be implementing
cost of CSR and sustainable within banking industry (Crane, Matten and Spence, 2019). From
strategic perspective, banks will have to adopt an effective policies, practices within
organizational structure.
When it will be implementing CSR, sustainability within banking industry but it can be
identified the various challenges, risks and threat. This is because when involvement of
stakeholders so that it possible to increase conflict.
 Generally, shareholders will be dividing into different shareholding who could upset with
the governance schemes with active engagement (Murdifin and et.al., 2019). In this way,
it has rapidly increasingly confliction situation among staff member with banking
industry.
 Managers, in charge of various corporate management process while controlling with and
without any stock option. But it effect on the overall process in context of performance
related incentives (Advantage, 2020). In banking industry, employee can understand the
human capital and its processing, with different shareholders. But they do not believed on
the shared value.
 It has developed the lack of transparency so that banks do not publish the full details
about the business capabilities (Crane, Matten and Spence, 2019). However, it does not

allows for every stakeholder to be precisely informed about the interest policies. In this
way, it may have increased conflict among stakeholder and investors.
 CSR challenge is related to the delivery of effective training, information which mainly
servers the need or requirement of internal client, who will use internet banking services.
Usually, a huge efforts is that when devoted towards the different activities addressed by
banking staff member (Murdifin and et.al., 2019). At that time, they were not recognized
the specific insurance services and deals with the complex situation or condition.
 In additional, when implementing CSR strategies in banking sector which involved on
the different group level, initiatives addressed to multiple stakeholders. Therefore, it will
be creating ad hoc commitment with other stakeholder in term of insurance services
(Murdifin and et.al., 2019). The issue may be increased because of their enterprise
process whereas how banks will use CSR strategies plan in growth and development. But
some situation, it will develop the issue for increasing confliction among client
interaction. Existing consumers are not completely satisfied with the banking services.
2 Analyse the best practice within banking industry, identifying the ethical and moral issues.
Banking practice entails that various banks operates both professionally as well as
honestly. Therefore, bank will pay special attention to provide safeguarding the position of its
depositors. Generally, banks are mainly focused on the financial planning and analysis process.
But it is important for establishing a good relationship between customer and bank. They are
primarily governed by regulation, legislative provision by guidelines. The obligation is to adhere
with good practices in banking sector. In order to recognise the effective rules and regulations.
Banks have an important role played in society as financial intermediator and other service
provider of payment service (Azevedo and Ferreira, 2019). Therefore, it is core responsibility
towards the interest groups. In banking industry, manager and other executive will ensure that
each client satisfied with the better financial services. Bank manager will provide the better
training session for employee so that they can easily understand their duties towards client.
Afterwards, it will organise the essential supervision, regulation and management of their
actions.
In banking industry, it is well known about the best run enterprises that have a clear
understanding of how improve operational process. It help for generating positive financial result
or outcome. Initially, it has been required the financial planning, which help for find out the

essential resource to provide desirable goal or objective (Gangi, Mustilli and Varrone, 2019).
During operational processes, banks have a legal obligation so that they can record information
about existing client. It also obtaining the necessary data on client’s operations, financial
standing and also uses of banking services. The executive of banking industry, which may
require to inquire the origin and intended use of fund arriving on the client accounts. Afterwards,
it can be verifying the identity of client, where it is applicable or not.
In banking sector, it should be implemented the best practices for banking and other
financial service across the digital transformation. It is one of most commonly used digital
technology that always support for providing the better security, privacy. Digital based
transformation is all about giving the advantage on mobility platform. There are large number of
banks needs to integrate with digital technology (Chun, 2019). It may support to increase speed,
efficiency of different processes. Nowadays, it is acceptable for consumer to access the details
and also establish the coordination with bank manager. Furthermore, there are different type of
best practices across digital transformation adopted by banking industry.
Improve customer success procedures
In recently, the roadmap of consumer Journey getting much advanced, banking industry
need to identify the journey of existing client. Sometimes, it is crucial part to handle the complex
situation or condition in banking sector. In order to make remarkable difference, which will be
creating the major impact between contrasting client segments. It continuously to improve the
customer experience within banking sector. The obligation is to adhere with good practices in
banking sector. In order to recognise the effective rules and regulations. Banks have an important
role played in society and other service provider of payment service
A digital environment or culture is not only implemented to satisfy the need or
requirement of consumer. Afterwards, it also providing the open hand through employee to
handle the various tasks such as cross-selling, maintain relationship with client, reducing
price/cost of business operation. Even it also changing the process which majorly impact on the
overall banking sector (Gangi, Mustilli and Varrone, 2019). According to report, it has
determined that large banks modified their credit lending process so that it can easily reduce the
time frame from application to the funding. Another way, it also understand that bank tackle the
process and save $230 million in next four years.

In additional, for purpose of security bank will provide client instruction to deposit their
EMI on specific deadline. They must employ in giving as safeguard to secure their sensitive
information and personal details. By using digital technology, existing consumer may use online
payment service which mainly provided by banking industry. Therefore, it become easier for
potential existing client to access account details, make payment process, check availability due
date, insurance and loan facilities (Gangi, Mustilli and Varrone, 2019). Moreover, if it can
generate the technical errors that has been made by bank executive itself and also resolve the
issue without any delay. In this way, digital transformation conceptual thing in banking sector to
manage daily operational activities in step by step manner.
Implementing data analytics
It is another important practice in banking industry, data analytics emphasize bank to get
better insight into their client. Afterwards, it can easily identify the new and efficient enterprise
opportunities, lowering the business operational price/cost. The business intelligence and
analytics which give permit banking sector to predict in load defaults (Gangi, Mustilli and
Varrone, 2019). In this way, it can easily identifying defaulter who will be underpaying their
loan.
Moreover, it will be using the conceptual granular cluster analysis which consider as
good idea to analyse large amount of customer interest towards financial services. In order to
calculate the insight view of client and help the sales team to pitch the particular services in
proper manner. It also establishing a relationship with other people. Banks can implement the
data mining concept in order to satisfy the need or requirement potential consumer. On the other
promising side, it will be generating important leads and also establish the strong connect
between prospective consumer and current one. This type of practice will help for implementing
the behavioural analytics to determine the unsatisfied client and then design an effective action
plan to retain potential client.
Redesigning the operating model
It is also important practice that mainly used for redesigning the entire operating model
within banking industry. Nowadays, existing customer want to look out the digital technologies
which providing the better advantage, benefits in term of growth and development. In banks,
employee can support and advice for more complex banking item such as mortgages, trading in
stock markets and investment. Sometimes, it may increase the blocker issue or problem during

processing (Laužikas and Miliūtė, 2019). In this way, other agencies have suggested to bank
when they can redesign their operating model so that it help for identifying percentage of trade in
marketplace. Existing customer who want to integrate with the various financial service, product
and experience has increased to 42% from 32% in 2017 (Laužikas and Miliūtė, 2019).
Furthermore, financial banks that integrated with human interaction through digital
technology, handling the overall business functionality. Afterwards, it has increased the growth
revenue of banking sector approximately 10-15%. Sometimes, it goes upstream in branches of
operation cost and up to 16% rise in client satisfaction.
In additional, ethical and moral issues are considered as important part within banking
industry. The specific threat that characterised the financial crisis which included manipulating
credit rating, mis selling securities, unauthorised trading and other type of short selling. It is an
essential for handling all these operational processes which help for improving the overall
business capabilities in global world (Laužikas and Miliūtė, 2019). These type of financial crisis
will be improving when implement all ethical concern in order to eliminate threat, risk in
financial investment.
3. Recommendations for business in banking sector
It is necessary for banking sector to follow some recommendations related to be more
responsible for it. This is because in global context the sector is not working in ethical way and
there is high impact on their financial performance. By following several recommendation the
change has to be made in it so that banking sector is more responsible towards society. In order
to ensure that all businesses follow their responsibility towards society and its different
stakeholders corporate social responsibility has been developed so that businesses can fulfil their
responsibility towards different stakeholders and society. Thus, they are as follows
The sector can contribute towards those countries which are highly suffering from covid 19. In
that they can provide financial aid to them so that they are able to fight with it. In this way they
can contribute towards society and be more responsible in it.
Another way is that the sector can share support small business by giving them financial support.
This will led in their growth and development so it will enable in providing them funds. Besides
that, in such a financial crises in covid 19 times the sector can provide flexibility to businesses as

well as people to repay their loans. Thus, for that a new policy or certain measures or norms can
be formed that are in favour of providing flexibility.
banking industry need to identify the journey of existing client. Sometimes, it is crucial part to
handle the complex situation or condition in banking sector. In order to make remarkable
difference, which will be creating the major impact between contrasting client segments. It
continuously to improve the customer experience within banking sector.
In addition, sector can secure their entire online system and does not share any confidential data
and info of people. They can be responsible by ensuring that transactions done are safe and
security of data is maintained. In this way in tough times businesses can become more
responsible for it.
Furthermore, sector can contribute more towards society by providing funds to NGO and other
firms who are engaged in it. They can identify needs of stakeholders and ensure that it is
fulfilled in effective way. With this they will be responsible towards society and businesses as
well.
In order to more ethical banking sector should operate in ethical way. It means that they must
provide loan to large firms on basis of their financial performance rather than on personal terms
or any other factors. This has to be ethically done at global level without any partiality done in it.
Moreover, another recommendation is that the sector can form a policy which is applicable to
implementing a CSR policy and protecting environment. It will enable in contributing towards
maintaining a positive and green atmosphere. The CSR policy will make them to create a
sustainable society.
There can be development of digital environment in which all service quality is maintained and it
becomes easy for customer to avail those. Hence, bank will become more eligible towards
maintaining quality of services in effective way so that customers are retained.
So, in this way by following all recommendation in banking sector it will be easy for
them to be more responsible in ethically. In this way, it will make them more responsible in areas
where they are weak and need improvement.

CONCLUSION
On the basis of above discussion it can be concluded that key challenges that banking
industry and organisations operating within the industry experience are concerned with capital
and financial investment which make great implications on the financial position of the
organisation. Another challenge is that after implementing changes it does not remain limited to
one time implementation and also require regular monitoring and compliance. This present
challenges for banking sector organisations. Communicating and convincing all the stakeholders
is another challenge because stakeholders with strong power and interest in organisation might
oppose to the decisions and in such situation it becomes a challenge. Regulatory pressure and
public scrutiny is some other challenges that are being faced by Banking Industry in relation with
corporate responsibility and sustainability. In relation with best practices of the bank it can be
considered that banking industry now a days is focusing on relationship management in which
they are focusing in the ways through which they can improve their relationship with the
customers. This is important as harmonious relationship of bank with their customers will lead to
customer loyalty and this is a key contributor in sustainability of the bank and for ensuring its
competitive position for a longer time. In this banking sector is focusing on improving customer
experience and data analytics related to customers are also being improved in order to enhance
practices of the banks related to the customers.

REFERENCES
Books and Journals
Advantage, C., 2020. Corporate Social Responsibility. CSR and Socially Responsible Investing
Strategies in Transitioning and Emerging Economies, p.65.
Azevedo, A.R.S. and Ferreira, F.A., 2019. Analyzing the dynamics behind ethical banking
practices using fuzzy cognitive mapping. Operational Research. 19(3). pp.679-700.
Chun, R., 2019. How virtuous global firms say they are: A content analysis of ethical
values. Journal of Business Ethics. 155(1). pp.57-73.
Crane, A., Matten, D. and Spence, L., 2019. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press, USA.
Ferrell, O.C and et.al., 2019. Business ethics, corporate social responsibility, and brand attitudes:
An exploratory study. Journal of Business Research. 95. pp.491-501.
Gangi, F., Mustilli, M. and Varrone, N., 2019. The impact of corporate social responsibility
(CSR) knowledge on corporate financial performance: evidence from the European
banking industry. Journal of Knowledge Management.
Laužikas, M. and Miliūtė, A., 2019. Transformational communication via evolving ethical and
moral norms of lithuanian civil service organizations. Entrepreneurship and
Sustainability Issues. 6(4). pp.1750-1761.
Louche, C., Busch, T., Crifo, P. and Marcus, A., 2019. Financial markets and the transition to a
low-carbon economy: Challenging the dominant logics. Organization &
Environment. 32(1). pp.3-17.
Murdifin, I. and et.al., 2019. Environmental disclosure as corporate social responsibility:
Evidence from the biggest nickel mining in Indonesia. International Journal of Energy
Economics and Policy. 9(1).p.115.