New research from open banking platform Tink shows young UK bank customers expect their financial service providers to demonstrate stronger environmental credentials. And many are willing to switch banks for greener options.
The Feb 2022 survey of 2,000 UK customers showed that younger consumers are keen to find financial service providers that help them measure and manage environmental impact.
ESG offers a potential competitive advantage
The research shows a strong affinity for environmental sustainability by younger consumers. Nearly two-thirds (62%) of 18-34-year-olds want more information about their carbon footprint to reduce their impact on the planet — compared to a national average of 48%. Over half (53%) expect their FI to do more to help them reduce their environmental impact.
“As the climate crisis worsens, our latest research makes it clear that consumer expectations for financial institutions are rising. Banks that fail to give full, transparent visibility over environmental impact and carbon footprint may be at risk of alienating a key segment of consumers — in particular, those within the 18-34 age bracket,” said Tasha Chouhan, UK & IE Banking Lead at Tink.
Surprisingly, nearly one in four (23%) of 18-34-year-olds already track their environmental impact through an app, compared to the national average of only 10%.
More importantly for banks, 43% would switch to a bank that showed consumers the environmental impact of their purchases. In addition, 56% of these younger consumers also look for rewards or incentives for becoming greener.
Providers without sustainability offers alienate some customers
As many as 42% of 18-34-year-olds say they wouldn’t use a bank they don’t regard as environmentally conscious — with 40% saying they only invest money into companies or funds considered sustainable — twice the national average of 21%.
More than half (55%) of 18-34s say they wouldn’t use a FI that holds assets or investments in companies contributing to climate change. However, over half (51%) of 18-34-year-olds surveyed say they would encourage friends or family to use a provider they regarded as environmentally conscious.
“Open banking has a vital role to play in helping financial institutions build a strong sustainability offering for customers. For example, by aggregating, categorizing and analyzing transactions with open banking, customer data can be linked to carbon footprint analysis, and consumers can know the environmental impact of their spending,” Chouhan said.
Sustainable innovation opportunity
Tink’s findings demonstrate a clear appetite amongst younger generations for open banking-powered tools that allow them to measure and minimize their environmental impact.
58% of 18-34-year-olds want the opportunity to take advantage of services with a positive environmental impact, and 47% want to measure their investments’ environmental and social impact.
Appetite for green info
Younger generations want to measure the footprint of their digital subscriptions as they consume these everyday digital goods and services. They’d like to know how the following spending contributes to their carbon footprint:
- Consumption of digital subscription services like Netflix, Gusto, and digital newspapers
- Consumption of essential items such as food and toiletries
- Consumption of utilities, including water, electricity and gas
- Usage of transportation and travel services like taxis, buses and airlines
- Consumption of non-essential luxury items such as jewelry and designer clothing.
“It’s encouraging to see younger generations of customers embracing open banking powered services that give them greater control over their finances and their environmental footprint,” Chouhan added.
Banks have a clear opportunity to pioneer innovative sustainability services to appeal to a growing segment of customers, who expect their FI to give them the tools and incentives to become greener.
More information is available at https://tink.com/press/tink-partnership-cogo-natwest/.
Tink connects to more than 3,400 banks reaching over 250 million bank customers in Europe. Founded in 2012 in Stockholm, Tink serves more than 300 banks and fintechs in 18 European markets. Tink and sustainability fintech Cogo formed a strategic partnership in Jan 2022 to provide banking customers with personalized carbon footprint tracking services. Visa acquired Tink in March 2022.
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