TECHNOLOGY
Explainer-What’s next for the EU AI Act?
Published On :
By Matthew Williamson, VP of Global Financial Services, Mobiquity
Going green by leveraging digital technologies
Sustainability has become a business critical initiative in banking and financial services, where banks of all shapes and sizes are starting to incorporate Environmental, Social and Corporate Governance (ESG) into their business strategies.
The importance of digital technologies in this process has sometimes been overlooked by the banking and financial services industry. However, leveraging digital technologies to drive sustainable outcomes is one avenue banks can pursue to create a sustainable future, and awareness is on the rise.
In our latest research report, ‘A Benchmark for Sustainable Banking’, a survey of banking executives at corporate and retail banks in the UK shows that almost three quarters (72%) of UK banks are embracing digital technology to make their business operations greener. In addition, the research also reveals what digital initiatives banks are utilising to be more sustainable, including intelligent automation, the digitisation of paper processes and machine learning.
By embracing digital solutions such as these to improve sustainability, banks can improve operational efficiency while at the same time making their business operations greener. It therefore makes business sense for banks and financial institutions to pursue a sustainable future by leveraging digital technologies. But, what are the risks for those banks that ‘sit on their hands’, and why are some still not taking action?
Overcoming business frictions around COVID-19 and industry demands
Our research reveals that while many banks understand the importance of sustainability and how digital can help, it also finds that less than a third of banking executives in the UK (31%) believe sustainability is a top concern at board level. In addition, less than half of UK banks (45%) are planning for sustainability initiatives, citing the main barriers as COVID-19 and industry demands.
This is especially concerning, as it demonstrates a friction between understanding and implementing sustainability among banking executives.
Indeed, COVID-19 should not be viewed as an obstacle to becoming more sustainable – it should actually be viewed as an accelerator. The pandemic has shifted business online and facilitated the growth and adoption of digital technologies across the banking and financial services sector. By embracing this and accelerating digital transformation across all areas of the business, banks will future-proof their business as we emerge from the pandemic.
However, for those that fail to prioritise sustainability, the environmental impact will be significant, and it will also lead to reputational concerns for the banks themselves. Customers may decide to vote with their feet, while investors may pressure banks to improve their performance on sustainability as it becomes a key business metric in the industry.
In the future, banks may find that attracting customers and retaining talent becomes increasingly difficult as banking continues to change. Those who aren’t practicing what they preach when it comes to sustainability may be left behind by the competition.
Harnessing sustainability to retain customers and save costs
The benefits of sustainable banking are clear. By harnessing sustainability effectively, banks and financial institutions open up a range of benefits, from reducing costs and increasing operational efficiencies to being more environmentally friendly and retaining existing customers while growing new ones.
Our research supports this, as those banks that implemented sustainability initiatives saw the benefits of doing so, with 2 in 5 (40%) UK banks reporting cost savings, customer retention and growth through harnessing sustainability initiatives.
In order to take advantage of these benefits, senior decision makers at banks and financial institutions may want to start looking at sustainability strategies holistically – ensuring that sustainability is prioritised across all areas of the bank, both internally and externally. In addition to supporting ESG externally, banks need to become more sustainable themselves. The fastest way of achieving this is by using digital technologies to optimise internal processes.
Overall, implementing digital technologies will not only help banks drive operational efficiencies internally and externally, accelerate innovation, reduce costs and ultimately retain and grow customers, it also leads to more sustainable outcomes as a business. This is what makes sustainable banking a ‘win-win’ for the banking and financial services sector.
Future of banking: A digital lifestyle enabler with an eco-conscience
Our research shows that there is a golden opportunity for traditional and challenger banks to accelerate their use of digital technologies in order to drive sustainability, especially as the role of the bank in society continues to change.
Today, banks need to embrace their responsibility as part of the community, prioritising financial inclusion, climate change and societal issues to support the community they serve better. For example, Community Banking Hubs introduced recently in the UK demonstrate the changing role of the bank, as well as the impact of COVID-19 on customer expectations.
These hubs allow customers to access their cash on specific days at specific venues, in place of traditional branch banks. This allows banks to support those customers that may not wish to use digital services while scaling digital offerings to their digital first customers. This ensures that no one is left behind as we shift increasingly to a digital first banking experience that retains a human touchpoint.
The bank of the future will not only be one that bridges the physical and digital banking experience, as the Community Banking Hub model shows. The bank of the future will also be a digital lifestyle enabler that has an eco-conscience, and one that embraces sustainability. This will enable banks to carve out new revenue streams as customers increasingly choose to bank with businesses that prioritise sustainability.
-
-
NEWS1 day ago
German companies’ hiring plans drop to four-year low, Ifo finds
-
-
-
BUSINESS1 day ago
Burberry shares jump on Moncler bid report
-
-
-
Uncategorized1 day ago
Swedish government commission recommends easing mortgage repayment rules
-
-
-
NEWS1 day ago
Ryanair H1 profit falls 18% on lower fares, but price weakness moderating
-