How application management can help tackle the finance industry’s carbon emissions

Published On : 10/12/2021

With ambitious net-zero targets being pledged, there is growing pressure on the ‘high carbon’ finance industry to reduce emissions as new studies push the sector further into the spotlight. While there are several areas that need to be considered from recycling to more environmentally responsible investments, one area that is often overlooked and could make a significant difference is their digital platforms. Melissa Hendry, Co-founder and Managing Director of ddroidd, a technical and digital transformation specialist, discusses how application management can reduce carbon emissions, whilst improving performance and security.

Topping the carbon emissions charts

The finance industry has been under fire following a recent Greenpeace and WWF study, which concluded if the UK’s biggest banks and investors were a country, they’d rank 9th in the world for the carbon emissions they are responsible for – 805 million tonnes of greenhouse gases in fact.

However, as one of the biggest users of online systems and data centre processing that requires high-speed and high-security processing, it is no surprise the industry emitted more emissions than Germany and 1.8 times more than the UK in 2019.

Added pressure as the world goes more digital

Online banking and payments have continued to increase year-on-year since its inception; but the global pandemic caused a quicker than expected shift. As consumers began to embrace a more digital world to reduce contact and adjust shopping habits, it put additional pressure on digital platforms to perform.

Covid has changed the way consumers engage with their banks and shopping. This, combined with the increase in online payments, regulatory KYC (know your customer) and security checks, as well as AI for predictions, analytics and reporting, is only going to put more pressure on financial institutions’ systems – resulting in more, not less, resources and energy being required.

How data contributes to carbon emissions

On its own, the software we use does not consume energy or cause environmental harm. The issue is the way software is developed and deployed. Software is dependent on hardware, and as reliance on software increases exponentially, so too does the reliance on the machines which support it.

Currently, when a user accesses a webpage, the information contained is requested from external servers. Each time the webpage is visited, most of this page information is served afresh and discarded once the user leaves. Constant information requests mean more servers are needed and there is more chance of overload as ‘new’ content must be retrieved every time. This data is unnecessarily stored and continues to consume space on the hardware that requires energy.

Technology has the uncanny ability to provide solutions to the very problems it creates. Using smarter code, combined with an efficient set-up of hosting architecture, some technology providers can establish optimised applications that give businesses full control over their processing power.

Rather than devices needing to continually retrieve the same data, technologies such as the ddroidd A+++ solution recycles and reuses previously processed information, eliminating the need for unnecessary information reprocessing that demands extensive resources. It’s a method that can cut information reprocessing by 90%, reduce a website’s energy consumption, improve reliability

and responsibility as well as cut costs. Indeed, reducing the energy consumption of software can be 100 times more powerful than reducing the energy consumption of hardware.

Does streamlining data cause performance issues?

Using smarter, more efficient code to recycle and reuse previously processed information not only reduces a business’ carbon emissions, but through proactive application management can significantly increase the performance and security of a digital platform.

Financial institutions need to keep data safe and secure, at all times. Website failure and security breaches could be catastrophic for the industry. However, if a website is running on legacy technology and inefficient architecture, or there’s an increase in customer demand and spikes in traffic, it can all put a platform under extra pressure and cause it to fail.

Many businesses will choose to have a team on standby for reactive support to fix issues or inefficiencies in an application as they arise, such as system breakdowns. Taking a more proactive approach to application management ensures ongoing improvements and enhancements to prevent inefficiencies from becoming critical performance problems.

Proactive application management also gives an overview of the system to help develop plans for the future. It’s a long-term solution that guarantees ongoing efficiency. Proactive application management combined with reactive support is the perfect solution to ensure a digital platform is fit for purpose, not only today but in the future.

But what about the environment?

The finance industry has a substantial carbon footprint, which will likely continue to increase unless drastic action is taken. While a spokesman for UK financial institutions has advised the industry is committed to being net zero by 2050, clear steps of achieving this have not been defined.

Financial institutions need to review their environmental touchpoints and assess how they can begin to make changes that will reduce carbon emissions. Looking at their digital platforms, is a simple yet effective first step in reducing their impact and online carbon footprint. And it could also save money, increase security, and improve performance as a result. Win win for all involved.

Wanda Rich

Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.