Addressing environmental concerns of customers in a genuine way is an important element in maintaining trust, according to the Finance DNA report. Green financial products can also play an important role in enhancing the customer experience.
The banking sector fosters traditionally high levels of trust among its customers and the public in general. After the pandemic, for instance, 64% of people said that they trust the large UK banks, compared to 57% in 2020.
Trends identified in the Finance DNA report, created in partnership with Foresight Factory, point to era of more humanised and tailored services for customers. An evolution that has the potential to boost relationships and trust levels between banks and their customers.
However, at least one issue will challenge banks and financial businesses on ensuring that trust and confidence remain at acceptable levels. That's the demand for a greater emphasis on sustainability and "green" issues from consumers.
According to the report, brands that tackle this seriously will benefit in terms of reputation, building levels of loyalty, and encouraging product take-up. But they'll need to be explicit about how their ESG initiatives work, and demonstrate clear proof of impact.
Consumer sentiment is clear - they're fed up with greenwashing from brands across all categories. HSBC is an example of a major bank brand that risked reputational damage when one of its campaigns was called out by the Advertising Standards Authority. This followed complaints from the public that the company had no right to claim to be environmentally responsible with ad copy including, "Climate change doesn't do borders." Their statements were claimed to be misleading as they omitted significant information about HSBC’s contribution to carbon dioxide and greenhouse gas emissions.
Regardless, a firm emphasis on addressing people's environmental concerns through clear organisational change is a good business move, according to the report. It includes the finding that almost one in three (29%) of British consumers already say they always or sometimes consider sustainability when choosing financial products such as credit cards and investments, rising to 38% among Millennials.
The power of green rewards
Finance DNA also identifies the opportunity that lies in rewarding consumers for adopting behaviours that promote a form of social or environmental good. The report highlights how this move could become a key feature of customer loyalty programmes in terms of nudging people towards healthier and more eco-friendly actions.
This fits with insight that shows close to eight in ten (78%) UK consumers in 2022 claimed to be interested in reward programmes that offer discounts based on them adopting more eco-friendly behaviour. Providing clear evidence that purpose and value-based reward schemes will offer competitive edge in the 2020s.
Looking forward, customers want to see greater focus from banks on new products that connect them with green concerns. For example, 47% are interested in apps that track their personal impact on the environment.
In the UK, Bud, the open banking platform that launched in 2016, offers this type of service with carbon tracking that charts a customer's environmental impact with in-app displays matching carbon contribution against spending.
Taking a further leap, finance companies are already launching products that claim to offer rewards on purchases that have a lower carbon footprint. In Australia, the new brand Future launched the FutureCard Visa card, offering 6% cashback on payments such as charging an electric vehicle, taking public transport, and buying second-hand clothing.
The implementation of such initiatives will not only improve the customer experience and improve loyalty but also provide solid evidence that banks are not full of hot air when it comes to green issues.
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