How To Make Financial Services Greener?

When it comes to eco solutions, the financial industry probably won’t be in the top 3 things that come to your mind. Yet times are changing, and the financial service sector has become the accelerator of greener business methods. What does it mean in practice? Banks and other financial institutions refuse to invest in fossil fuels and are looking for means to reduce carbon emissions and achieve net-zero pledges. Instead of investing in gas and oil, global banks contribute renewable resources and green energy. 

To sustain and gain a competitive advantage, private-sector banks follow trends and customer demands, where eco-friendliness is at the top list. Nowadays, consumers can no longer be called bystanders. They care about their money and their investments. Towards ecology as well. According to Deloitte research, 61% of banking customers wish their bank would do more to create a positive social and environmental impact. They also find out that “seven out of ten customers (71%) are more likely to choose a bank with a positive social and environmental impact.” Eco initiatives are no longer a perk. They are a necessity. 

By adopting ESG (environmental, social, and governance) strategies and new working standards in the financial sector, they are gaining popularity among conscious consumers and making our planet a better place to live. But to achieve these results, financial institutions (FI) need assistance from the IT industry, mainly cloud services.  

Greener Banking​

In the great mission towards a greener environment step, one is clarified, yet there are still many ways your financial institution can support the environment. Below, we’ve gathered a few more tips to use. 

Go paperless

New technologies allow us to forget about paper bills, internal data, and statements. By reducing paper use, you also reduce clutter in your home and office and save trees essential to our ecosystem and better well-being. Electronic bank statements can be requested almost anytime, eliminating the need for physical movement. Studies have shown that the average household can reduce up to 9 paper bills a month if they go paperless. It means a family could reduce about 3kg of carbon emissions over a year.

Mobile Banking

More and more users worldwide prefer mobile banking over conventional branches. Wide functionality and convenience are the main chargers of motivation. It eliminates the need to drive to the department, wait in the queue, fill in the forms, and fulfill their request after that. Users can go mobile wherever they need to, in the office, at home, or while walking in the park. If they need any advice or consultation, they can reach chatbots. Mobile banking saves time, gives a better user experience, and saves resources like petrol and paper, helping minimize carbon emissions. Also, mobile banking helps to save energy and lower demand on the power grid.

Encourage your customers to donate to Eco

The great benefit of traditional banking is that online can automate users’ contributions to charitable environmental organizations. Some banks allow their customers to commit pre-authorized gifts and monthly monetary pledges to charities of their choice through direct debit or credit card payments. Others go even further and plant trees with the purchases clients made with their cards. Such policies not only reduce environmental effects but also empower clients’ loyalty. 

Cloud is for green

Cloud migration is one of the most effective ways to reduce the carbon footprint of working procedures in the banking sector. Physical data centers provide an enormous ratio of our digital carbon footprint. That is why the reduction of on-premises IT infrastructure and the investment in cloud services should be the number one priority.

Such hyperscalers like Microsoft, Google, and Amazon evaluate that businesses using their cloud infrastructure cause around 95% fewer carbon emissions than on-premise systems. Furthermore, according to the new forecast from International Data Corporation (IDC), “continued adoption of cloud computing could prevent the emission of more than 1 billion metric tons of carbon dioxide (CO2) from 2021 through 2024.” Investments hyper scalers put in are lucrative. If comparing on-premises server farms of Microsoft and cloud infrastructure, the energy efficiency of the second is 93%. Because 78% of its Azure public cloud servers are powered by renewable energy, the emissions from the remaining 22% are compensated. 

Cloud infrastructure lets organizations run environments only when required, reducing energy demands. Thanks to the rapid growth of computational power and advancement in programming, old-school systems can be replaced and moved gradually to the cloud. Deploying your application or system from on-premise to the cloud opens practically limitless compute resources, which can help you scale your app seamlessly. This switch enables more frequent releases and makes it easier to stay up to date with the latest release, decreasing the requirements for data centers and energy consumption.

Increasing cloud adoption is essential for reducing emissions and meeting net-zero targets.

What banks are already “green”?

Worldwide banks are already following eco trends and gaining popularity among users. Major points that differentiate them from their competitors are investments in reusable energy and agriculture, local small business loans, full or partial digitalization, and B Corp certification.

▪ Aspiration – US-based green bank, members of 1% for the planet, and donate 10% of their profits. Offers clients the possibility to plant a tree with every purchase and get up to 10% cash back on Conscience Coalition purchases. Provide such services: as savings, checking accounts, investing, and retirement. Fully digital.   

▪ Ando Money – is a Certified B Corporation their debit cards are made with 80% less plastic. You can invite friends to their impact center and see exactly where (and what) your money is funding, such as clean energy, sustainable transportation, green buildings, etc. 

▪ The Charity Bank –  is an ethical bank that lends to charities and social enterprises. Since 2002 they’ve given out 59 loans from the environment sector and finance arts, community, education, and social housing. 

▪ Starling Bank – is branchless, paperless, and runs on a renewable energy bank that pledged to become a NetZero company. The company facilitates its employees with 16 hours of paid leave per year to do volunteer work. 

▪ CIBC bank – focuses on environmental, social, and governance matters of importance to their stakeholders. In 2020, they financed $15.7 billion in the environmental and sustainable sector and helped fund community-based renewable energy projects across Canada through their contract with Bullfrog Power.

Final word

Financial Institutions are becoming a real game changer and charger of new eco-initiatives. Alongside new technological assistance, they can make a synergy of effective solutions. If you are ready to enhance your existing product or develop a new one, you can count on Proffiz. Our tech specialists have been creating solutions for the financial industry supporting banks and fintech startups for over five years. You can see our portfolio and text us anytime at hello@proffiz.com. Reach us at any stage of product development. Together we can make the world a better place!