Corporate Social Responsibility is essential to build strong relationships with consumers. On the brink of collapse, Puerto Rico’s Doral Bank transformed itself with an aggressive CSR strategy. By offering free mammogram testing and education on health care for women, Doral bank has quickly established itself as a trusted community partner.
Banking On Relationships
What do you do when your stock is declared ‘toxic waste’ and ‘0ne of the biggest disasters on the NYSE of the past few years‘? In the wake of scandal and corruption charges, the stock of the Puerto Rican Doral Bank tanked. (It fell from $50 to $1.19 in just 12 months.) And unlike banks caught in the tsunami of subprime market crises, Doral had no global collapse to blame.
Refusing to die quietly, Doral reached out to a 20 year vetern of GE, Glen Wakeman. Named president and CEO in May 2006, Wakeman tackled Doral’s issues with gusto. He started with compliance and governance issues which included a SEC claim, an FDIC Cease and Desist Order, and a class-action lawsuit by shareholders. It didn’t take long for Wakeman to prove his worth – he dug up enough capital to avoid bankruptcy though private-equity funding.
Wakeman’s efforts kept the bank open and avoided bankruptcy. But Doral was left with a triage – they had to decide how to build on real value. Turns out, Doral’s true worth wasn’t found in its vaults, but in it’s relationship with the community.
Puerto Rico has a population of about 4 million people. According to S&P reports, Doral had just over 500,000 accounts. That means that most of the population of Puerto Rico had some kind of connection to the bank. In order to take advantage of this value, Wakeman transformed Doral from an institution that offered mortgages, to a full-service bank. “Doral was a strong name in the financial community, particularly in the mortgage area. We wanted to leave the old Doral, the mortgage institution, and move into a full-service bank,” said Karla Gual, VP of brand development.
It was a good plan, but a new logo wouldn’t do the trick. Lucienne Gigante, the VP of Public Relations, told me in our recent interview that Glenn wanted to transition Doral into a community bank. Not just by aggressively opening new branches and new accounts, but by “immersing the bank in the community.” Sounds good, but it’s not an easy task.
The Two Sides of Brand-Trust: Competence and Intention
Health insurance is a huge topic for Americans right now. Almost 50 million Americans are uninsured. These citizens are typically poor, unemployed or in some other state of stress. Unfortunately, with issues such as breast cancer, early detection would prevent death in 98% of the cases. Of course, if you’re uninsured you don’t have access to annual mammogram testing. Without a simple mammogram test, your chances are dismal.
In 2008, Doral launched ‘Ruta Pink’ (Pink Route), a community initiative that promotes the early detection of breast cancer. Now a pink mobile clinic travels to various Doral Bank branches offering women free mammograms, as well as biopsies and referrals. This is a free service offered in conjunction with Susan G. Komen For The Cure Puerto Rico. So far, over 2100 women have accessed this life saving service as well as attend education seminars on women’s health.
Corporate Social Responsibility IS the Bottom Line
Unlike many other companies investing in Corporate Social Responsibility, Doral managed to connect the Ruta Pink initiative to it’s key services. Now, every time a woman opens a ‘Pink’ account, Doral makes a financial contribution to the Susan G. Komen foundation. “Municipalities are calling us and asking us to open branches in their communities and bring Ruta Pink with them,” Lucienne Gigante said. She told me that a key part of this community initiative was for “branch managers to be perceived as valuable leaders in their community.” Doral is providing their managers the tools to achieve that goal.
Within the first year of the bank’s transformation it was clear that Wakeman’s plan was working. By the Fall of 2008, the perception of Doral as a bank concerned for the well-being of the community improved by almost 100%. Positive sentiment toward Doral’s brand image overall improved by an impressive 58%. This positive perception translated into an increase in clients from 400,000 to 450,000 and in deposits by 5%.
Doral was recently awarded a Country Award for Achievement and named the 2009 Bank of the Year by Finance Magazine (UK).
If you’d like to know more about Doral’s community programs, you can visit their community involvement page.