Supporting retail banking sustainability with credible claims
By Mikko Kähkönen, Head of Payment Cards Portfolio at Giesecke+Devrient
Today’s consumers are more environmentally conscious than ever before, increasingly comparing banks based on their sustainability pledges and placing them at the forefront of their financial decisions. Research from Giesecke+Devrient has found that almost two-thirds (64%) of Generation Z would change banks if they felt their provider fell short on ethics and environmental sustainability.
However, sustainable offerings need to be authentic to avoid the risks of greenwashing. In the past year, consumer trust in banks and financial organisations has been tested due to a 70% increase in greenwashing incidents globally, as reported by Reuters in October 2023. Therefore, it’s no longer enough for banks to claim they are sustainable, they instead need to make credible commitments to sustainable banking.
The transformation of bank cards
Alongside cash and digital services, the banking card is a cornerstone of modern consumer transactions, they are the physical connection between the consumer and the bank’s brand. Banks now commonly distribute cards made with a high level of recycled PVC material (up to 100%) and designed to be carbon neutral.
Certain banks are also reinforcing their commitment to card sustainability by utilising cards made of plastic collected from the oceans and coastal regions. Similarly, more cards are being made from polylactic acid, which is derived from fully renewable biomass and able to be industrially composted, with no toxins produced if incinerated.
These initiatives can also encourage issuers to participate in local conservation, community development, and education efforts by engaging in activities that benefit local communities. Taking part in such initiatives acts as a tangible proof point for customers and can provide peace of mind that their bank of choice is actively involved in sustainability projects.
Moving towards a circular economy
While increasing the sustainability of banking cards is one piece of the puzzle, another is empowering consumers to do the right thing with them once they are no longer needed. Late in 2022, UK retail bank Santander launched a pilot scheme across 28 of its branches allowing consumers to recycle their old credit and debit cards. Self-service machines are used to shred any unwanted cards and repurpose the pieces into plastic pellets for reuse. As more banks adopt this approach moving forward, consumers will find it even easier to dispose of old or expired cards in a responsible way. Giving consumers this opportunity can be key in working towards circularity,
Beyond the physical world
Beyond tangible card transformations, retail banks can further elevate their credible green claims with digital tools. For example, the card issuance process has traditionally involved paper letters being sent out to customers to share PIN numbers. An ePIN service can allow customers to receive their PIN in a paperless way, either via a mobile app or SMS message, thereby reducing waste.
Additionally, the integration of QR codes and augmented reality (AR) solutions in carrier mailings removes the need for any printed sales and marketing collateral to be sent in the post, with everything served digitally instead. The more information that can be communicated digitally, the less paper is needed for customer communications, demonstrating to consumers a tangible commitment to green practices.
Banks can also go a step further by working with partners on digital tools for tracking and compensating the CO2 footprint of each payment or purchase. Selecting the right partners is essential, with banks needing to look for those that have a good record and commitment towards sustainability, including product certifications and detailed information on eco-products and their claims.
Backing up the green narrative
To avoid scrutiny over green claims, banks, and financial institutions can integrate sustainable strategies that support the demand among customers for green commitments across both their physical and digital offerings.
Banking cards can be devised from recycled or even fully compostable material, leaving no plastic waste behind. While in the digital space, banks can take steps to reduce excess paper with digital apps to streamline the PIN delivery process.
Innovations across these areas can underpin green obligations and build the crucial level of trust needed between organisations and consumers while helping to make a positive difference to the planet.
March 01, 2024
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