Over two thirds (67 per cent) of consumers want their bank or financial institution to become more sustainable in future, according to a new report from cloud banking platform Mambu.
The report surveyed over 6,000 consumers on their attitudes to green finance globally. It reveals that, while the majority are in favour of greener financial options, consumers have little trust in the industry’s sustainability credentials.
Nearly half (48 per cent) stated that access to green financial services has become more important to them in the last five years, yet more than two thirds (67 per cent) of global consumers believe that their current financial institution is guilty of greenwashing.
Just two in five (42 per cent) consumers think that their current bank or financial institution clearly communicates its sustainability commitments, and only 37 per cent know what climate pledges they have publicly announced or committed to.
There’s also confusion around exactly what ‘green finance’ is, as over a third (35 per cent) of consumers don’t 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 (finance which takes into account not only financial returns but also environmental, social and governance factors), indicating a need for greater education and communication within the industry.
Adoption of green finance is far from mainstream. Just over 1 in 4 (26 per cent) consumers have knowingly made use of a sustainable banking product or service. But, of those that have, the vast majority (84 per cent) were more satisfied with these services than traditional banking products.
The survey shows that consumers want banks to be more transparent and have greater power in holding them to account. Nearly three fifths (58 per cent) would like more control over how and where their money is invested – to align with their personal values. Meanwhile, over half (55 per cent) would like a say on the types of green financial products and services their financial institution develops in future.
Anna Krotova, Director of Sustainability at Mambu, said: “Our research shows that consumers are increasingly looking for ways to make greener financial decisions, but remain sceptical about how strongly banks are committed to the sustainability agenda. They 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 empowers financial institutions to do just that and build sustainable financial products quickly and cost-effectively to meet consumer demands.”
Specifically, 42 per cent of consumers would welcome incentives and loyalty programmes that reward them for making greener financial decisions. The same percentage would like to hear more about sustainability commitments during the onboarding process for financial products and services.
Yet, consumers are less interested in the granular details of sustainability targets. A little over a quarter (26 per cent) would like to receive monthly sustainability reports from their banks and just 20 per cent are interested in them benchmarking or scoring themselves using a sustainability index or rating system.
When it comes to the most in-demand green financial products, global consumers cite sustainable credit and debit cards (45 per cent); green savings accounts and bonds (42 per cent); green loans (31 per cent) and green mortgages (31 per cent) among the offerings they’d most like to see.
The findings also demonstrate the green finance opportunity for banks, as nearly half (49 per cent) of consumers say they would consider switching to a provider with a stronger commitment to sustainability, yet less than a third (32 per cent) are willing to pay a premium in order to do so. .