Tink: Younger consumers expect banks to have strong environmental credentials
New research from Europe’s leading open banking platform, Tink, finds that younger generations expect strong environmental credentials from their financial services providers, with many willing to switch providers to seek out greener options.
According to the survey of 2,000 UK consumers, younger customers are significantly more likely than their older counterparts to seek out financial services that help them measure and manage their environmental impact. Almost two-thirds (62%) of 18-34 year olds want more information about their carbon footprint so they can reduce their impact on the planet — compared to a national average of 48%.
Younger cohorts of customers also want incentives to do the right thing for the planet — with 56% of 18-34 year olds looking to be rewarded by their financial provider for lowering their carbon footprint.
Providers lacking a strong sustainability offering risk alienating customers
Financial services providers without sustainability offerings run the risk of losing business, by failing to meet the expectations of a new generation of climate-conscious consumers. In fact, nearly half (43%) of 18-34 year olds would switch to a provider that allows them to see the environmental impact of purchases on their bank account.
Furthermore, 42% of 18-34 year olds say they wouldn’t use a financial provider that they didn’t regard as environmentally conscious — with 40% saying they only invest their money into companies or funds considered sustainable — twice the national average of 21%. While more than half (55%) of 18-34s say they wouldn’t use a financial services provider that held assets or investments in companies which are majorly contributing to climate change.
However, for providers on the front foot when it comes to sustainability, there is a potential upside for profits as well as for the planet. 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.
The opportunity for sustainable innovation
Tink’s findings demonstrate that there is clear appetite amongst younger generations for open banking powered tools that allow them to measure and minimise their environmental impact.
One in four (23%) 18-34 year old respondents say they already track their environmental impact through a service or app — compared to a national average of just one in ten (10%). A further 58% of 18-34 year olds would like to have the opportunity to take advantage of this type of service. While 47% would also like to be able to measure the environmental and social impact of their investments.
Appetite for information
When it comes to tracking the impact of their purchases, younger generations are as interested in measuring the footprint of their digital subscriptions as they are the everyday goods and services they consume.
In order of priority, 18-34 years olds are curious to understand how the following spending contributes to their carbon footprint:
- Consumption of digital subscription services e.g. Netflix, Gusto, and digital newspapers
- Consumption of essential items e.g. food and toiletries
- Consumption of utilities e.g. water, electricity, gas
- Usage of transportation and travel services e.g. taxis, buses and aeroplanes
- Consumption of non-essential luxury items e.g. jewellery and designer clothing
This represents a clear opportunity to pioneer innovative services related to sustainability, to appeal to a growing segment of customers, who expect their financial services provider to give them the ability and the incentives to become greener.
Tasha Chouhan, UK & IE banking lead at Tink, commented: “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 consumer — in particular, those within the 18-34 age bracket.”
“Open banking has a vital role to play in helping financial institutions build a strong sustainability offering for customers. For example, by aggregating, categorising and analysing transactions with open banking, customer data can be linked to carbon footprint analysis and consumers can know the environmental impact of their spending.
“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. By partnering with fintechs to experiment with open banking powered use cases, financial institutions will be better placed to attract and retain this emerging new wave of green consumers.”
Tink’s open banking platform powers a range of products and services that enable financial services providers to build tools that measure and manage carbon footprint.
This includes a strategic partnership with sustainability fintech Cogo to provide UK banking customers with personalised carbon footprint tracking services — now available to more than eight million NatWest customers.