Almost three quarters (72%) of UK banks are embracing digital technology to make their business operations greener.

The research entitled “Benchmark for Sustainable Banking”, commissioned by Mobiquity, a full-service digital transformation enabler, and conducted by Censuswide, reveals that 2 in 5 banks are using intelligent automation (41%) and digitising all paper processes (40%) in a bid to be more sustainable. This was followed by helping customers to be greener by encouraging less travel to the branch (39%), collaborating with suppliers and partners for extracting maximum value across the global supply chain e.g. from data centres (37%) and machine learning (36%).

The study found that those banks that implemented sustainable banking initiatives saw the benefits of doing so, with 2 in 5 (40%) UK banks reporting cost savings and customer retention and growth through harnessing sustainability initiatives.

Despite the adoption of digital technologies to improve sustainable outcomes, the research reveals that banks aren’t taking full advantage of them with less than half of UK banks (45%) planning for sustainability initiatives, citing the main barriers as COVID-19 (31%), industry demands (31%) and long term commitment to execution (26%).

Commenting on the report, Dr Ben Caldecott, Director, Oxford Sustainable Finance Programme, University of Oxford and COP26 Strategy Advisor for Finance, UK Cabinet Office said: “Sustainable finance creates huge opportunities for the banking sector, and in addition to supporting clients transitions towards sustainability, banks will also need to become much more sustainable themselves, not only for their financed emissions, but for their own activities and operations.

“The banking sector is where the financial system and the real economy meets. It is in the interests of banks to move quickly given the scale of the opportunities and the risks that are already materialising. Banks need to develop comprehensive strategies, together with detailed plans for implementation tied to appropriate resourcing and levels of accountability to ensure implementation. For example, by enabling investments in digital capabilities, such as platforms that enable new forms of client engagement with sustainability and impact investing.

“Critically, it is also in their own commercial interests to do so and they should not wait for regulation or the enforcement of recently updated regulations.”

Matthew Williamson, VP of Global Financial Services, Mobiquity said: “Our report shows that most UK banks are not doing enough to be sustainable. Not only will this have a large impact on the environment, but in the future, they will find that attracting customers and retaining talent will become difficult. 

“Customers may decide to vote with their feet and investors may pressure banks to improve their performance on sustainability as it becomes a key business metric.

“Overall, the role of the bank in society is changing from a wealth repository to a digital lifestyle enabler. There is a golden opportunity therefore to build on existing awareness around digital and its role in creating sustainable banking outcomes, by embracing digital innovation that lays the foundation for achieving an eco-conscience across banking and financial services.”