Balancing purpose and profit: How ethical narratives drive customer loyalty

For providers within financial services, the growing importance of social, environmental, and ethical narratives is hard to ignore. But how can these purpose-led approaches be quantified in terms of customer loyalty?

The changing landscape: purpose as a differentiator

While ethical finance has long had its champions, it’s only in recent years that the conversation has moved into the mainstream. Wider accessibility and increased competition have made it easier for consumers to choose providers aligned with their values, whether that’s sustainability, community focus, or broader ESG commitments.

This shift in consumer consciousness is backed by data. A 2021 Kearney study¹ found that 22% of customers would consider switching to a bank with stronger ESG credentials. Deloitte's research² in the same year painted an even starker picture: 61% of UK banking customers want their bank to have a positive social and environmental impact, and the same proportion would consider leaving a bank involved in social or environmental harm.

Our own data at Smart Money People tells a similar story. By analysing customer reviews, Net Promoter Scores (NPS), and satisfaction levels, we see clear evidence that ethical providers consistently outperform their peers. And these results don’t just apply to niche markets but across the broader industry. For example, building societies, not typically associated within in ESG conversations, stand out with exceptional satisfaction and NPS, likely due to their mutual status and community-driven ethos.

The challenge: balancing ethics with real-world pressures

Despite rising interest in ethical finance, there’s no escaping the cost-of-living pressures facing consumers today. For some, higher savings rates may outweigh ethical considerations in the short term, particularly if it enables them to choose to make more ethical choices elsewhere in their day-to-day life. Businesses need to understand these competing priorities and avoid making assumptions about what their customers value most.

That’s where robust customer research comes into play. Rather than guessing, financial services providers must invest time into learning what really matters to their customers. And from there, consider on how their products, communications, and operations can authentically reflect those priorities.

Equally important is ensuring that ethical initiatives don’t sit in isolation within marketing or product teams. Without a company-wide commitment, efforts can lack authenticity and longevity, potentially damaging trust rather than building it. Customers are increasingly savvy to greenwashing, and with the FCA’s 2024 guidance³ reinforcing that ESG claims must be “fair, clear and not misleading,” the stakes are higher than ever.

Measuring loyalty: where data tells the story

Quantifying loyalty can, and should, go far beyond gut feel or isolated metrics. NPS remains a gold standard in measuring customer advocacy and loyalty. However, the true value comes from understanding how your NPS stacks up against peers, and digging into the underlying drivers of that score.

At Smart Money People, we analyse NPS n tandem with customer review content to unearth key themes influencing sentiment. This enables us to compare performance between ethical and traditional providers. The results are striking. In our most recent analysis⁴, ethical banks achieved an NPS of +94.1 and consistently scored above +94 over the past four years. For context, NPS ranges from -100 to +100, making these results exceptional.

But loyalty isn't just about advocacy. Retention offers another vital indicator. Analysis of our review data shows that ethical providers often see stronger “stickiness”, even in the face of more competitive pricing elsewhere. Understanding not just when, but why customers leave, is crucial. Data collection around customer exits can provide vital insights into pain points and opportunities. This is another area where we work with clients to understand and help provide actionable insights into their customers.

Key takeaways: where to begin

If you’re looking to build a stronger connection between your brand’s purpose and customer outcomes, here are five key takeaways:

1. Start with customer research. Understand what matters most to your audience and avoid assumptions.
2. Balance short and long-term actions. Quick wins can build momentum, but deeper change requires strategic investment.
3. Be authentic and transparent. Communicate your actions clearly, avoid greenwashing, and acknowledge where there’s still progress to make.
4. Track meaningful metrics. Monitor NPS, customer acquisition costs (CPA), retention rates, and benchmark performance regularly.
5. Use data to inform. Whether it’s measuring sentiment from reviews or testing marketing messages, let the numbers guide your strategy.

In an increasingly values-driven marketplace, our data shows that organisations that will thrive are those that recognise ethics and economics as complementary, not conflicting, forces. With the right data, the ROI of doing the right thing has never been clearer.

Find out more

To learn how the depth and breadth of our data can support your company, contact our Business Development team.

1 - https://www.kearney.com/industry/financial-services/article/-/insights/social-responsibility-the-future-of-mainstream-banking

2 - https://www.businessgreen.com/news/4025396/poll-uk-banking-customers-demanding-greener-financial-services  

3 - https://www.fca.org.uk/news/press-releases/fca-confirms-anti-greenwashing-guidance-and-proposes-extending-sustainability-framework  

4 – Smart Money People data. Customer reviews analysed between 1 March 2024 and 28 February 2025.