Helping banks to re-connect with customers
While sustainability issues are a hot topic for many consumers – 85% of adults surveyed by Mastercard said they’re willing to take personal action to combat environmental and sustainability challenges in 2021 – they have a particular resonance with the youngest.2
Climate change is the biggest concern for millennials and those in Gen Z, according to a Deloitte survey, which also found that over four in 10 had educated themselves on the environmental aspects of the brands they consume.3
If banks are to continue to attract this key demographic, offering solutions that act on both the spirit and the letter of their sustainability concerns is crucial. In other words, banks cannot afford to be found greenwashing.
The European Union is doing its bit to mitigate this by helping to clarify what sustainability actually means. The EU Taxonomy Regulation, unveiled in 2020, classifies environmentally sustainable economic activities. Crucially, it includes definitions that companies, investors, and policymakers can use to demonstrate that projects are truly “green.”4
But even if customers are convinced that a bank is genuine in its sustainable endeavors, could enhancing their environmental awareness with tips or nudges during the payment process be perceived as a troublesome friction that could lead to less spending? No, says Doconomy co-founder and CCO Helena Mueller: “It’s not a question of customers spending less, it’s about them spending better. If you build an experience that is fun, engaging, educating, and rewarding then you’ll have the same behavior as with any type of service.”
As banks look to improve customer loyalty, work towards digital and sustainability targets, and stand out in a market that Silicon Valley giants continue encroach on, reintroducing some purposeful incentives and degrees of friction to payments by linking them to the environment could be a profitable new avenue to explore.