I came across an interesting article called Keeping Its Commitment To Its Customers: A Bank Does The Right Thing which I think makes an excellent point that companies often forget. At IBM we used to call it being a good Corporate Citizen. That used to mean helping out in the local community, sponsoring local events and supporting local initiatives where employees were involved.
The story of Webster Bank is an interesting twist on the concept of being a good Corporate Citizen.
1. Webster Bank owns and keeps 75% of the loans it makes rather than selling them off to third parties. That means they maintain local responsibility. They are involved directly with those who took out the loans.
2. Webster Banks has accepted 65% of its mortgage modification applications. Compare that to the 33% average nationwide in the US.
The implications of this are enormous in the community.
a. It allowed more people to stay in their homes, paying off their mortgages
b. It protected the prices of the homes in the neighborhoods. When there are foreclosures, prices of the neighboring homes are affected too.
c. Consumers can see the actions of the bank and appreciate that their bank isn’t faceless.
What is interesting is Webster Bank is profitable while doing this. They avoided the legal costs of foreclosures.
The executives of the bank are paid based on the number of loans modified, not foreclosed.
The motto of Webster Bank is ‘We find a way’ and they certainly do. I am sure they have loyal customers and will attract more with these policies in place.
They should be a model for others to follow.
What is your opinion? Do you know of other cases where companies are using Good Corporate Citizenship as part of their customer satisfaction program?
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