100 Years of Credit and the Three Rs

On October 31, 1924, the World Savings and Retail Banking Group (WSBI) was established in Milan, and since then, this date has been celebrated as International Savings Day. It was a meeting of credit institutions founded in different countries with the goal of channeling savings and financing for the popular classes. Entities with legal peculiarities and distinct names in various languages: casse di risparmio in Italian, savings banks in English, caisses d’epargne in French, sparkassen in German, and cajas de ahorros in Spanish. The purpose of that founding meeting was to reflect on the ethical and economic sense of a banking business model that, even then, housed entities of great tradition.

The date was not coincidental; the interwar period was the right context to generate this international movement. During those years of understanding among the great powers, the League of Nations was also created. On the next October 31, current representatives of savings banks and retail banks will meet again in Italy (Rome) at a Congress that will commemorate the centenary.

The Institute now brings together 6,400 entities in more than 80 countries and has 1.7 billion customers globally. In 2024, in the era of immediacy, few organizations can pride themselves on such a long history. In Spain, CECA, the Association of Savings Banks, was born four years later (1928) at the initiative of the members from the Basque Country and Navarra. Since then, it has been a key partner of the WSBI. The best proof of the interconnectedness of the two organizations is that both are currently chaired by Isidro Fainé, a staunch defender of the proximity banking model promoted by CECA and the Institute.

But what identifies the WSBI 100 years later? Certainly not the legal structure of its members, which is so diverse and linked to national commercial laws. Furthermore, no one decides to work with a company because of its statutes. Customers choose a provider based on its service. That is why today, the Institute describes its members according to their activity and the impact of their performance. A century later, these banks define themselves by the so-called three Rs: Retail, Rooted, Responsible.

Firstly, WSBI members are retail entities (Retail). They aim to finance the real economy and, therefore, people. They focus on families, self-employed individuals, and SMEs. They are not investment banks that prioritize funding corporate operations. Secondly, they are deeply rooted in their territory (Rooted) and in their local communities through an extensive network of branches. They are not global megabanks. The associated banks in the U.S. are called Community Banks to emphasize that they are the main street banks as opposed to Wall Street banks. And above all, they are responsible companies (Responsible). They are banks that give back to the community where they provide their credit and deposit services. In Spain, we refer to this return as Obra Social. The Law on Savings Banks and Banking Foundations of 2013 has allowed for the refinement of this model and its governance in our country. It has strengthened professionalization, not only of financial activity with the establishment of solvent banks but also of the management of Obra Social, with the promotion of foundations specialized in effective social action.

Of the 2.8 billion dollars that the Institute’s members allocated to Obra Social in 2023, the entities affiliated with CECA contributed more than 900 million. Furthermore, it was a Spanish initiative to create, within the WSBI, a Social and Philanthropic Committee to promote joint Obra Social projects at the international level. This Committee coordinates initiatives that require scale and a global approach, such as biomedical research or financial literacy in developing countries.

The debates that will take place in Rome will be aimed at achieving, leveraging those three Rs, another 100 years of credit flow. Discussions will cover how to balance quality face-to-face service with clients who want to interact with their bank exclusively through digital channels. They will also discuss the impact of artificial intelligence on management and cyber security. At the same time, contributions are expected from experts on microcredit and ethical saving from countries as diverse as Nigeria, India, El Salvador, and Thailand.

However, the WSBI World Congress will primarily be an opportunity to revalidate that spirit from a century ago. Achieving a society capable of combining the era of immediacy with the simplicity of defining things by their performance: with three Rs.