American Banks are Lagging Behind in Climate-friendly Banking Innovation
- 18.09.2023 03:05 pm
Money20/20 USA calls itself “The world's biggest, most influential gathering of the global money ecosystem”, but amongst 350 speakers and countless topics, ‘sustainability’ and ‘climate’ come up only once on the show agenda. Climate isn’t one of the four main ‘themes’ and hasn’t made it through as one of eleven dedicated topics. The truth is, the leaders of the capitalist world are lagging far behind the rest of the world when it comes to climate-friendly banking innovation.
As a global climate fintech that works with 20 of the world’s leading banks to integrate and automate carbon footprinting into everyday banking apps for millions of customers, Cogo believes North American banks are far behind other regions that are making positive climate moves. “Besides moving from ‘in-person’ to ‘online’ and doing away with cheques, Personal Finance Management (PFM) offerings haven’t changed in what feels like decades. By contrast, Cogo works with banks in countries including the UK, Netherlands, New Zealand, Australia, Japan, Singapore and Canada are going live with world-first in-app carbon footprinting functionality and gaining a 100% increase in share of voice (and associated share of wallet) for sustainable finance,” says Ben Gleisner, Founder and CEO for Cogo’s North America and APAC regions.
In the six months leading up to Money20/20 Las Vegas, Cogo has launched its Business Carbon Manager app in the UK Xero App Store (while it’s already live in Australia) to help small businesses measure, understand and reduce their carbon emissions; and NatWest has surpassed 500,000 users of the Carbon Tracker.
Climate is key to commercial advantage
“These banks and accounting innovators have woken up to the fact that helping customers manage their carbon footprint can re-engage unengaged customers; cement customer loyalty; and help to shape their customer proposition - all of which helps secure commercial advantage in an increasingly competitive banking landscape,” believes Gleisner.
Available results suggest that users are more likely to recommend their bank to family and friends; and one bank’s users have reported a 4.2 / 5 satisfaction rating - the highest rating for any feature introduced by the bank.
Available statistics indicate that 37% of users of the carbon footprinting feature commit to climate actions suggested for them; with an average dwell time of 4-6mins. A third of engaged users are Gen Z / Millennials - which helps to future-proof a bank’s user base.
Leadership vs legality
Glesiner goes on to say that in Europe and other continents where Cogo works, many banks have chosen to take a proactive leadership stance towards climate action even before they are legally obligated to do so. In the UK, for example, NatWest partnered with Cogo to launch in-app carbon footprinting even before consumer duty came into effect. Today, the number of customers accessing Cogo's carbon impact data through the bank's app has surpassed half a million, officially totaling 585,000 active users - up from 334,500 in just four months.
“This is a significant figure, and a clear signal that climate concerns are no longer ‘marginal’ for banking customers. Banks are realising that it’s far better to lead, than be forced by ESG legislation. So, as the fight for customers rages strong, North American banks have a real opportunity to win the global loyalty race by tackling growing climate concerns,” says Gleisner.
Will 2024 be the year America's banking leaders choose to shift the agenda?
“There is a potentially powerful narrative being claimed of environmentally aware consumers; attentive banks; and a promising future. Cogo's tickets are booked, ready to engage with banks who want to take a leadership role in the journey towards a greener America,” concludes Gleisner.