Report shows challenger banks have a more mature approach to sustainability
Hexaware Mobiquity, a digital transformation enabler, has published the findings of its Sustainability: Challenger vs. Traditional Banks Report 2023. Based on a survey of 150 UK banking executives conducted by Censuswide, the research shows that UK challenger banks have a more mature approach to sustainability than their more traditional rivals, having cemented the issue as a board-level priority.
The report reveals that whilst 69% of traditional banks view sustainability as an important part of their business strategy, a quarter (25%) of them say they need to shift cultural legacies before they can adopt sustainable behaviours. Although just over half (52%) of challenger banks say sustainability is important, more of them are reporting on it at board level (59%), and have a sustainability representative in the boardroom (56%), compared to traditional banks (49% and 52%, respectively). Despite these differences, the research found both traditional banks (79%) and challenger banks (73%) are using digital transformation initiatives to drive sustainable outcomes.
“Challenger banks are making the most meaningful progress in cementing sustainability as a board-level issue, to ensure it remains a defining factor in key business decisions,” said Peter-Jan Van De Venn, VP Global Digital Banking, Hexaware Mobiquity. “Whilst traditional banks do recognise the strategic importance of sustainability, it will take time to cut through the layers of legacy processes and technologies before they can drive real change.”
The research also reveals the benefits that banks have already unlocked by driving more sustainable practices. Almost a third (32%) of traditional banks experienced cost savings through innovative digital products and services, 26% saw improved brand reputation, 25% increased their customer retention and growth; and 25% said it supported their ability to acquire and retain top talent. The most common benefit identified by challenger banks was maintaining practices against business competition (31%), while 25% said more sustainable practices contributed to a positive impact within society, and 24% saw increased customer retention and growth.
“These findings indicate that both traditional and challenger banks have a lot to gain by becoming more sustainable. Their efforts to do so will be increasingly key to driving innovation and maintaining the loyalty of their customers and employees,” added Van De Venn. “As technology and sustainability become further intertwined, banks will be all-too-aware that their employees and customers expect them to be conscious of the environment and adopt socially responsible business practices. Emerging technologies can help them make the intelligent decisions needed to effect this shift – turning data into the fuel that can drive change and unlock a greener future.”
For more findings and analysis, Hexaware Mobiquity’s Sustainability: Challenger vs. Traditional Banks Report 2023 is available for download here: https://www.mobiquity.com/insights/challenger-vs-traditional-banks-2023.