Due to the estimation of the carbon footprint of daily transactions and the existence of a multitude of sustainable financial products, the landscape of banking around the world is changing. As this study shows:
“Green banking will ensure that organizations get their ESG strategy right, but it will also improve the quality of their assets in the future and encourage environmentally friendly investment”.
1. Create a reward programme for customers who reduce their carbon footprint
There is bound to be a large group of people among your customers who are interested in reducing their carbon footprint. You need to find them and offer them some kind of benefit in exchange for investing in sustainable products. To find them you could, for example, use data enrichment tools to analyze their transactional data and detect consumption patterns.
Based on this analysis, you will be able to offer similar or complementary products to the ones they already have, but related to sustainability and susceptible to bring them a benefit. Set goals or let the customers do it to increase their engagement. Rewards can be loyalty points, special offers or even contributions to environmental NGOs.
Once the programme is set, it is essential to communicate it to customers in a clear way. Review it and make any necessary adjustments to ensure that it is efficient and attractive to them. You can launch satisfaction surveys or periodically examine the consumption patterns of users to detect savings on electricity, changes in mobility habits, etc.
2. Offer loans with reduced interest rates for sustainable projects
Sometimes it is necessary to offer an incentive or a “nudge”, as R. Thaler (Nobel Prize in Economics and one of the fathers of behavioral finance) would say, to encourage a “green” commitment. You can offer a more advantageous rate for projects that care for the planet: installing solar panels, improving energy efficiency at home, buying an electric vehicle, waste management plans for companies and many more. The list is endless, the main thing is to communicate the benefits.
This will encourage your customers to invest in projects that reduce their carbon footprint. There are also savings accounts that finance green projects, such as reforestation or conservation of natural habitats. Your users will be able to choose how much of their assets are redirected to these projects, allowing them to personalize their contribution and fight climate change.
Another option is to offer a credit card that donates a portion of purchases to environmental NGOs. In this case, the donation is made automatically when a purchase is made. This has proven to be a simple way to increase customer satisfaction, as it is a small gesture with a big impact that will also help them to save more when presenting their annual income tax.
3. Create a portal with resources for customers interested in reducing their emissions
Including tips and recommendations to reduce energy and water consumption, as well as information on sustainable means of transport is a way to increase the time spent on the platforms and user engagement. It can also be interesting to implement a carbon footprint calculator so that customers can measure their environmental impact.
Comparing results with other customers, friends or family members significantly increases the desire to offset emissions and therefore to purchase products capable of doing so. Not to mention that it provides an important tool for the bank to make this progress going viral and turn its customers into brand advocates.
Once their transactions have been analyzed, they will receive recommendations to choose renewable energy sources, switch off electronic devices when not in use or consider more efficient ways of transportation. Similarly, it can be interesting to create a community of users where they can share their experiences and talk about how they are reducing their footprint.
The impact of banking operations on society and the environment
For years, the vision of banks as providers of basic financial services has been outdated. They are now required to contribute to the social and economic development of the territories in which they are present. Financial risk management and the financing of green projects have a significant impact on economic stability and growth.
There are AI engines on the market that, from raw transactional data, are able to create categories and subcategories to associate the corresponding carbon footprint to them. In the case of Coinscrap Finance, an average CO2 value is established for each category based on the recommendations of the MITECO (Ministry for Ecological Transition).
In addition, we calculate the emission of methane (CH4), nitrous oxide (NO3) and water consumption. Therefore, banking customers can see their monthly carbon footprint in kg CO2-eq for categories such as: food, supermarkets and shopping, household, transport and automobile, leisure, health, education and services.
This module allows banks to take advantage of the opportunities that PSD2 opens up and offer an unique value proposition while improving their ESG strategy.
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