How technology will revolutionise the quest for sustainability within Financial Services

“The earth, the air, the land and the water are not an inheritance from our forefathers but on loan from our children. So, we have to hand over to them at least as it was handed over to us.” Mahatma Gandhi’s thoughts on how we should treat the planet are noble and inspiring, but should also get us questioning our current behaviours.

Research from CDG shows that within the business world, the financial sector is one of the worst offenders, having funded emissions over 700 times greater than its own. Banks, lenders and other financial institutions must sit up and take notice.

Technology is our sustainability superpower 

Reversing the damage is a hard task, but it’s time for the financial services industry to stand up and be counted – setting an example for other industries to follow. To turn good intentions into actions, innovative technologies can have a huge role to play in changing behaviours for the better. Here are four ways in which technology can help financial institutions to become more sustainable:

1. Enabling net-zero transitions

At a top level, financial services players need to find ways to use technology to help them move toward a net-zero state. The DBS Bank has taken action by changing the very nature of the cards it gives to customers, launching Asia’s first bio-sourced credit card, reducing carbon emissions by 42 tonnes, and industrial waste by 19 tonnes.

While DBS has set a very tangible example, achieving a net-zero future needs more than just sustainable product offerings. Banks must be able to track wider carbon emissions, and technology has a crucial role to play in this transition. Data from digital sensors and networks can create digital twins of real-world systems to test, and even manage them in real time for energy efficiency and smart resource utilisation.

2. Building sustainable value chains

Technology makes it possible to completely transform the entire value chain, making it more realistic to meet sustainability targets. For instance, risk management can be made less of a burden by combining machine learning, artificial intelligence and blockchain capabilities with digital identity systems. This fusion of technologies means risk managers can rapidly identify any issues and act much quicker, so organisations face less exposure to ESG-related risk.

3. Measuring and reporting the ESG performance

Consumers are increasingly shifting to sustainable services and products. The growing popularity of apps such as Buycott and DoneGood, which help users find brands that operate sustainably, reflects this trend.

This means measuring and reporting ESG performances is now a huge priority. Technology provides the tools, capability, and methodologies to support financial organisations in embedding sustainability into everything they do, effectively measuring business value and ESG impact for all stakeholders.

4. Sustainable customer decisions and experiences

Deep insights and digital tools can make it much more realistic to make behaviours, decisions and experiences more sustainable. For instance, by moving from 14 digital systems to one, Hoist Finance streamlined decision-making to seriously reduce its carbon footprint. This gave it much clearer insights, enhanced experiences and resulted in almost a third of its debt resolution cases in the UK being resolved completely digitally. 

Customised services from technology partners can help financial institutions to meet their consumers on their sustainability journeys, and redefine their perceptions about the organisation’s commitment to sustainability. With data-driven insights, intuitive and unified platforms, and AI-enabled cognitive virtual assistance, banks can greatly influence their customers’ decisions and experiences.

Coming to the rescue

It’s clear that technology holds the key to unlocking a more sustainable future within finance. From banks to wealth management companies, the finance sector has been responsible for funding some of the world’s largest emitters in the past, but there are already signs that things are changing.

By really leading the charge to sustainability, the financial sector can play the hero, showing an example for other industries to offset their own carbon footprint. Not only will this ensure financial organisations will enjoy increased customer satisfaction, showing they have been listening to people’s demands for sustainability, but it will also help leave a healthy world for future generations.