Digitisation a golden opportunity for sustainability in banking

04 November 2021 Consultancy.uk 4 min. read
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With greater transparency in financial services, and increased customer demands around tackling climate change, banks face growing pressure to prioritise environmental, social and corporate (ESG) strategies. Matthew Williamson, a Vice President at Mobiquity, outlines how digitisation offers golden opportunities. 

At the same time, the Covid-19 pandemic has left many banking executives focusing efforts elsewhere despite this growing pressure. Indeed, a banking and finance landscape that was already changing rapidly in 2020, along with the customers it serves, faced an unprecedented challenge during the Covid-19 pandemic.

In order to benchmark the banking and financial services industry in sustainability, Mobiquity surveyed 300 banking executives in the UK, Germany and the Netherlands on sustainable banking. The research report, ‘A ‘Benchmark for Sustainable Banking’, focused on top concerns at board level, barriers to adoption of sustainability initiatives, sustainable initiatives currently being planned and implemented, and levels of digital awareness, among other areas. 

Sustainability strategy and implementation

A benchmark for sustainable banking

Firstly, our research found that around a third (31%) of UK banks said that the Covid-19 pandemic and industry demands were the main barriers to becoming more sustainable.

Additionally, less than one-third of UK banks view sustainability as a top concern at board level, highlighting the extent to which Covid-19 is hindering sustainability initiatives in the UK market. In the other markets surveyed, the number of banking executives prioritising sustainability falls even further, to 28% in the Netherlands and 24% in Germany.

It is to be expected that many banking executives continue to see Covid-19 and related industry demands as their largest challenge to date, while other concerns, such as sustainability, are pushed into the background to accommodate immediate, short-term challenges. The challenge for the industry is viewing Covid-19 as an opportunity to scale sustainable banking, through digital, rather than a challenge that hamstrings sustainability. 

Sustainability focus at board level

The golden opportunity of digitisation

Nonetheless, the research provides cause for encouragement, specifically around the role of digital technologies in sustainability. While sustainability is not a top concern for banks in the UK, Germany and the Netherlands, awareness of using digital transformation to create a sustainable future in banking is high among UK and Dutch banking executives. 

This highlights the golden opportunity for banks to build on sustainable digitisation – the process of leveraging digital technologies to become more sustainable while increasing efficiencies. 

In the Netherlands, 4 in 5 (80%) banking executives are aware that digital can have a positive contribution to sustainable banking. In the UK, nearly three quarters (72%) of banks are also embracing the role of digital technology in making business operations greener. 

The benefits of embracing sustainable digitisation range from optimising internal and external business operations to retain and grow customers. At the same time, by becoming more sustainable, banks will make their operations greener and enhance their reputation. 

Banks and financial institutions that are already leveraging digital technologies, such as intelligent automation, internet of things and artificial intelligence, are reporting the benefits of doing so. 

Challenges and efforts towards sustainability

Our research found that 2 in 5 (40%) of UK banks said that sustainable digitisation led to cost savings, customer retention, and growth. Other benefits highlighted by UK banks included accelerated innovation, improved brand reputation, increased operational efficiency across the business, and staying competitive.

To build momentum around going green, we also need to change the way we view Covid-19. The pandemic has accelerated the industry’s shift to digital while sustainability has become increasingly important for customers. The opportunity that exists is connecting these two trends together, by using digital technologies and innovation to scale sustainability initiatives. 

The banks that successfully utilise sustainable digitisation will be the ones that retain customers, enhance their talent base and optimise business performance. The bank of the future will be a digital lifestyle enabler that has an eco-conscience to retain and grow its customer base as we enter a post-Covid-19 world.