A recent Economist Impact report for Temenos highlights a significant shift in the banking sector towards ESG propositions.
The survey, encompassing 300 banking executives globally, projects that 73% of banks will intensify their focus on sustainable banking options within the next five years. This change is driven by a combination of consumer demand and the growing importance of ethical banking practices.
The report underscores the influence of Generation Z, who favour long-term investments aligned with ethical and sustainable values. In the UK, a striking 61% of banking customers express a desire for their banks to positively impact social and environmental issues.
The banking sector’s response has been multifaceted. About 37% of banks are channeling investments into low-carbon technologies and decarbonisation start-ups. Moreover, 31% are implementing sustainability strategies that encompass both their supply chains and internal operations. The commitment to environmental concerns is also evident in the banking industry’s investment strategy, with 74% planning to fund eco-friendly projects in the next five years. Simultaneously, there’s a trend of diverting capital from carbon-intensive industries, as indicated by 64% of the banks surveyed.
Additionally, the report highlights a technological shift, with over half of the banks (51%) predicting an end to private data centres, favouring public cloud operations to reduce their carbon footprint.
Kalliopi Chioti, Chief Marketing and ESG Officer at Temenos, emphasized the growing consumer influence on banking operations, stating, “Evolving consumer preferences are putting immense pressure on banks to operate according to a clear set of values, and are actively moulding banks’ agendas and strategies. Whether it’s by using artificial intelligence to align investment strategies with clients’ values, or reducing their carbon footprint through economies of scale on cloud solutions, technology can be a powerful ally for banks on this journey.”
Keep up with all the latest FinTech news here.
Copyright © 2024 FinTech Global
