How can banks and fintechs make greener customer decisions?
Consumers and regulators are increasingly looking for organizations to reduce their social and environmental footprint. Now banks and fintechs must ask what they can do to help. COP26 should not be the motivator, but it could just provide a high level incentive for some to make the necessary changes.
Earlier this year, Rishi Sunak gave clear instructions to the Bank of England to align its monetary policy toolbox with the government’s goal of net zero. For lenders around the world to provide robust and environmentally friendly services, they too must consider their investment choices, ensuring that they act in a way that limits risk.
Consumers are asking for it. They are increasingly aware of how the organizations they interact with shape the world around them. In the recent Deloitte
Banking Service Improvement Survey, 70% of customers said they would be more inclined to choose a bank with a positive social and environmental impact.
The question is, can financial institutions make their daily interactions with their customers greener?
The opportunity is there. Digital transformation programs have already affected operations in direct contact with customers. But behind the scenes, most banks are still running transactions with significant levels of duplication and waste, thanks to legacy silo and leviathan systems. By moving to cloud solutions based on more modular, scalable and reusable platforms, financial institutions can make significant improvements in operational efficiency which, in turn, reduce environmental impact.
One example is Hoist Finance, a global debt management company that had used 14 different systems to manage client decisions. Hoist supports the UN Sustainable Development Goals and wanted his own operational plans to reflect these views. It has moved to a unified platform, allowing 33% of UK debt resolution cases to be resolved entirely digitally. It has dramatically improved business efficiency and customer experience, leveraging all available data sources and the latest AI innovations.
With a 97% lower carbon footprint for every digital resolution, this will save 442 tonnes of carbon for every 10% of customers using automated processes.
Financial organizations around the world should follow Hoist Finance to greener pastures and allow environmental concerns to guide business decisions. This will put them in a position of strength with regulators and consumers, but more importantly, make an active difference in protecting natural resources.