LONDON: More than two-thirds of consumers want their bank or financial institution to become more sustainable, according to a new report from cloud banking platform Mambu.
The “Is the grass greener on the sustainable side?” report surveyed 6,000 consumers on their attitudes to green finance globally and revealed that while most are in favor of greener financial options, customers have little trust in the industry’s sustainability credentials.
Almost half (48 percent) said that access to green financial services had become more important to them over the past five years, and 67 percent believe that their financial institution is guilty of greenwashing.
Two in five (42 percent) of consumers believe that their bank or financial institution clearly communicates its sustainability commitments, but only 37 percent know about the organization’s climate pledges or commitments.
Customers surveyed also expressed confusion over the exact definition of “green finance,” with over a third (35 percent) admitting they did not fully understand the difference between green finance (a product that has been designed to protect the environment or to manage the impacts of finance and investments on the environment) and ethical finance (which takes into account not only financial returns but also environmental, social and governance factors).
The report showed that adoption of green finance practices was far from mainstream, as well as indicating a need for greater education and communication within the industry.
Just over a quarter (26 percent) of consumers have knowingly made use of a sustainable banking product or service. But of those that did the vast majority (84 percent) were more satisfied with these services than with traditional banking products.
The survey showed that consumers want banks to be more transparent and also want greater power in holding them to account. Nearly three-fifths (58 percent) would like more control over how and where their money is invested — to align with their personal values.
Meanwhile, more than half (55 percent) would like a say on the types of green financial products and services their financial institution develops.
“Our research shows that consumers are increasingly looking for ways to make greener financial decisions, but remain skeptical about how strongly banks are committed to the sustainability agenda,” Anna Krotova, director of sustainability at Mambu, said.
“Consumers want to play a more active role in making green finance the future of finance, and there’s a huge opportunity for forward-thinking players to get ahead in this transition.”
Mambu helps financial institutions to build sustainable financial products quickly and cost effectively.
Specifically, 42 percent of consumers would welcome incentives and loyalty programs that reward them for making greener financial decisions. The same percentage would like to hear more about sustainability commitments during the launch of financial products and services.
Consumers are less interested in the granular details of sustainability targets. Just over a quarter (26 percent) would like to receive monthly sustainability reports from their banks, while just 20 percent are interested in benchmarking or scoring themselves using a sustainability index or rating system.
Customers cited sustainable credit and debit cards (45 percent), green savings accounts and bonds (42 percent), green loans (31 percent) and green mortgages (31 percent) among offerings they would most like to see when it comes to in-demand green financial products.
The findings also demonstrated the green finance opportunity for banks, as nearly half (49 percent) of consumers say they would consider switching to a provider with a stronger commitment to sustainability, yet under a third (32 percent) are willing to pay a premium in order to do so.
The full report can be found here.
