More than three quarters (77 per cent) of Malaysian consumers want their bank or financial institution to become more sustainable in the future, and 65 per cent would consider switching to a bank with a stronger commitment to sustainability, according to a new report from cloud banking platform Mambu.
The report, Is the grass greener on the sustainable side?, surveyed over 6,000 consumers globally, and over 500 from Malaysia, on their attitudes to green finance globally. It reveals that, while most consumers are in favour of greener financial options, they have little trust in the industry’s sustainability credentials, with 74 per cent of Malaysian consumers and 67 per cent of global consumers believing their current financial institution is guilty of greenwashing.
Subscribe to our Telegram channel to get a daily dose of business and lifestyle news from NHA – News Hub Asia!
Three fifths (61 per cent) of Malaysian consumers stated that access to green financial services has become more important to them in the last five years, and nearly one third (30 per cent) have already knowingly banked with a financial institution or made use of a sustainable banking product or service.
However, just two in five (42 per cent) consumers think that their current bank or financial institution clearly communicates its sustainability commitments, and only 37 per cent know what climate pledges they have publicly announced or committed to.
While 45 per cent of Malaysian consumers have heard of either green or ethical finance, there is some confusion around the terminology used, with almost a third (32 per cent) of Malaysian consumers not fully understanding the difference between green finance (a product that has been designed to protect the environment or to manage the impacts of finance and investments on the environment) and ethical finance (finance which takes into account not only financial returns but also environmental, social and governance factors) indicating a need for greater education and communication within the industry.
The adoption of green finance is far from mainstream. Just over one in four (26 per cent) consumers globally, and 30 per cent in Malaysia, have knowingly made use of a sustainable banking product or service. But, of those that have, the vast majority (84 per cent globally, 81 per cent in Malaysia) were more satisfied with these services than traditional banking products.
The survey also shows that consumers want to have greater power in holding banks to account. Globally, nearly three fifths (58 per cent) would like more control over how and where their money is invested, to align with their personal values, and over half (55 per cent) would like a say on the types of green financial products and services their financial institution develops in future.
Anna Krotova, Director of Sustainability at Mambu, said, “Our research shows that consumers are increasingly looking for ways to make greener financial decisions, but remain sceptical about how strongly banks are committed to the sustainability agenda. They want to play a more active role in making green finance the future of finance, and there’s a huge opportunity for forward-thinking players to get ahead in this transition. Mambu empowers financial institutions to do just that and build sustainable financial products quickly and cost-effectively to meet consumer demands.”
William Dale, Commercial Director at Mambu, added, “Nearly one third (30 per cent) of Malaysian consumers have already embraced green finance solutions, and the majority (61 per cent) say that the availability of green financial products has become more important to them in the last five years. With a growing focus on sustainability in the industry, Malaysian banks and financial institutions have an opportunity now to take a leadership role in bringing green finance into the mainstream. It won’t be easy, and with nearly three quarters (74 per cent) of Malaysian consumers concerned their bank is guilty of greenwashing there’s clearly some work to do on changing the narrative, but with 65per cent of Malaysian consumers willing to consider changing banks to a more sustainable financial institution, the business case is clear.”
When it comes to the most in-demand green financial products, Malaysian consumers cite sustainable credit and debit cards (50 per cent); green savings accounts and bonds (48 per cent); and green loans (35 per cent) among the offerings they’d most like to see.
The findings highlight the green finance opportunity for banks globally, with nearly half (49 per cent) of all global consumers surveyed saying they would consider switching to a provider with a stronger commitment to sustainability.
To read the full report, please visit https://mambu.com/insights/reports/disruption-diaries-green-banking.
