Balancing Profitability and CSR: Industry Perspectives on Digitalization of Financial Advisory

Abstract

The study explores how digitalization of financial advisory affects the financial institutions' ability to perform CSR activities in savings and investment. The qualitative study applies a cross-sectional design by interviewing nine leaders in financial institutions, industry organizations, and industry experts. Through thematic analysis three main themes were identified within their experienced CSR; Green Investments, Financially Sustainable Society, and Compliance. Focusing on the Financially Sustainable Society (FSS), three interrelated subthemes were identified: making products and information Available; increasing Awareness in the population in terms of societal and life cycle situations as well as financial literacy; and increasing Engagement towards personal savings and investments. The findings present that most efforts are currently directed toward increasing Availability through digitalization of financial advisory services, however this does not sufficiently capture their experienced CSR. The study contributes to a broader understanding of how digitalization can partly assist financial institutions’ CSR practices, but also emphasizing resources and efforts toward increasing awareness of, and engagement in, the benefits and necessity of personal savings. Three recommendations are proposed for financial institutions to consider beyond digitalizing financial advisory: (1) utilizing knowledge about individuals’ saving and investment behaviors in the development of services and marketing materials, (2) focusing educational and informational efforts on life situations, and (3) increasing engagement by enabling individuals to engage with others in their savings.