Long reads

Sustainable finance: how can banks and fintechs make greener customer decisions?

Consumers and regulators are increasingly looking for organisations to reduce their social and environmental footprints. Now banks and fintechs must ask themselves what they can do to help. COP26 shouldn’t be the motivator, but it might just provide the high profile prompt for some to make necessary change.

Earlier this year Rishi Sunak gave clear instruction to the Bank of England to align its monetary policy toolkit with the government’s net zero target. For the world’s lenders to provide robust and environmentally sustainable services, they too need to look at their investment choices, ensuring they act in a way to limit risks.

Consumers are demanding it. They are becoming more environmentally conscious of how organisations they interact with are shaping the world around them. In Deloitte’s recent Better Banking Survey, 70% of customers said they would be more likely to choose a bank that had a positive social and environmental impact.

The question is, can financial institutions make their day-to-day interactions with customers greener?

The opportunity is there. Digital transformation programmes have already affected customer-facing operations. But behind the scenes, most banks still run operations with significant levels of duplication and waste, thanks to siloed, leviathan legacy systems. By moving to more modular, scalable, and reusable platform-based cloud solutions, financial institutions can make massive improvements to operational efficiency that, in turn, reduce environmental impact.

One example is Hoist Finance, a global debt management company which had used 14 different systems to manage customer decisions. Hoist supports the UN’s sustainable development goals and wanted its own operational blueprints to reflect these views. It moved to a unified platform, enabling 33% of debt resolution cases in the UK to be resolved entirely digitally. It has dramatically improved business efficiency and customer experience, leveraging all available data sources and the latest in AI innovation.

With a 97% lower carbon footprint for every digital resolution, this will save a massive 442 tons of carbon for each 10% of customers using the automated processes.

Financial organisations across the world should follow Hoist Finance into greener pastures and allow environmental concerns to drive business decisions. This will put them in a strong position with regulators and consumers, but more importantly, make an active difference in protecting natural resources. 

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