How technology will revolutionize the quest for sustainability in financial services
“Earth, air, land and water are not an inheritance from our ancestors but a loan from our children. So we have to hand over to them at least as it was handed over to us. Mahatma Gandhi’s thoughts on how we should treat the planet are noble and inspiring, but should also cause us to question our current behaviors.
CDG research shows that within the business world, the financial sector is one of the worst offenders, having financed emissions more than 700 times higher than its own. Banks, lenders and other financial institutions need to sit up and take notice.
Technology is our sustainability superpower
Repairing the damage is a difficult task, but it’s time for the financial services industry to stand up and be counted – setting an example for other industries to follow. To turn good intentions into actions, innovative technologies can have a huge role to play in improving behaviors. Here are four ways technology can help financial institutions become more sustainable:
1. Enable sharp zero transitions
At the highest level, financial services players need to find ways to use technology to help them evolve to a net zero state. DBS Bank has acted by changing the very nature of the cards it issues to its customers, launching Asia’s first bio-based credit card, reducing carbon emissions by 42 tonnes and industrial waste by 19 tonnes .
Although DBS provided a very concrete example, achieving a net zero future requires more than just sustainable product offerings. Banks need to be able to track broader carbon emissions, and technology has a crucial role to play in this transition. Data from digital sensors and networks can create digital twins of real systems to test, and even manage them in real time for energy efficiency and smart resource use.
2. Building sustainable value chains
Technology enables the complete transformation of the entire value chain, making it more realistic to achieve sustainability goals. For example, risk management can be alleviated by combining machine learning, artificial intelligence and blockchain capabilities with digital identity systems. This fusion of technologies means that risk managers can quickly identify any issues and act much faster, so organizations are less exposed to ESG risks.
3. Measure and report on ESG performance
Consumers are increasingly turning to sustainable services and products. The growing popularity of apps such as Buycott and DoneGood, which help users find brands that work sustainably, reflects this trend.
This means that measuring and reporting on ESG performance is now a top priority. Technology provides the tools, capabilities and methodologies to help finance organizations embed sustainability into everything they do, effectively measuring business value and ESG impact for all stakeholders.
4. Sustainable customer decisions and experiences
Deep insights and digital tools can make it much more realistic to make more sustainable behaviors, decisions, and experiences. For example, by going from 14 digital systems to one, Hoist Finance streamlined decision-making to significantly reduce its carbon footprint. This has given him much clearer information, improved experiences and has enabled nearly a third of his debt resolution cases in the UK to be resolved entirely digitally.
Personalized services from technology partners can help financial institutions meet their consumers on their sustainability journeys and redefine their perceptions of the organization’s commitment to sustainability. With data-driven insights, intuitive and unified platforms, and AI-powered cognitive virtual assistance, banks can greatly influence their customers’ decisions and experiences.
come to the rescue
It is clear that technology holds the key to unlocking a more sustainable future in finance. From banks to wealth management firms, the financial sector has been responsible for funding some of the world’s largest issuers in the past, but there are already signs that things are changing.
By truly leading the charge towards sustainability, the financial sector can play the role of hero, setting an example for other industries to offset their own carbon footprint. Not only will this ensure financial organizations increased customer satisfaction, showing that they have listened to people’s demands for sustainability, but it will also help leave a healthy world for future generations.