Customers are demanding that their banks go greener

The majority of consumers believe that the financial services industry is not doing enough to protect the environment.

The pandemic and increased awareness of the climate crisis have seen consumers reappraise what’s important to them – and with which businesses they wish to spend their money. And while the majority of organisations have models that embrace ethical working practices, it’s also important to understand the actions that the climate crisis has prompted consumers to take to ensure their money is used in environmentally friendly ways.

We commissioned research to form an in-depth understanding of retail banks’ current challenges and opportunities and to identify in what ways they most need to adapt, and as part of this we asked consumers how important the ethics and sustainability of their bank was to them.

Over half (56%) of all consumers said it was important to them that their bank or building society acted sustainably and/or ethically, women ranking this as significantly more important than men (61% vs 51%). Millennials were the generation for whom this behaviour was most important (60%), followed by Boomers (57%) and Gen X (39-53 years old) on 55%. In fact, only 16% of consumers said it was unimportant to them.

Given that this is clearly a priority, what ethical or sustainable financial actions have consumers taken themselves?

Most common was to move their pension or savings into environmentally friendly funds, which 16% of consumers have done. Eight percent of consumers have gone further by switching banks to achieve this. And while the appetite is clear, few banks, outside Tandem, Triodos Bank and Ecology Building Society, either offer an environmentally focused account, or communicate the ethical dimension of their products or business setup.

Switching to align their bank with their beliefs is prevalent for the under 40s. Eighteen percent of 18–23-year-old Gen Zs had switched accounts for this reason, and 15% of the 24–38-year millennials told us that they had done so.

Customers who want their institutions to be acting sustainably and ethically can no longer be considered in the minority. Retail banks and building societies must be sure that they are putting these issues high up their agendas, if they want to remain relevant to today’s consumer.

To access more exclusive insights, download the full Rethinking Banking report via the button below, where you’ll find more insights into other key retail banking trends, such as whether vulnerable people are receiving the support that they need and in what ways banking priorities have shifted since 2020.

In total, 2,000 consumers were interviewed nationwide during the research, conducted by specialist research agency Opinium. The subjects were split by the five key consumer generations: Gen Z (18-24), Millennials (25-40), Gen X (41-56), (Baby) Boomers (57-75) and those aged 76+. As well as focusing on those different generations, data scientists have taken the research a stage further and defined six distinct new banking personas for banks. While working with the outputs from the research, they identified six new customer banking clusters – or personas – combining both traditional socio-demographic data with new behavioural, channel and attitudinal data from our recent banking research.

In the light of wholesale industry change, understanding these personas will help decision-makers in our specialist sector create more accurate (and innovative) customer solutions, spanning product, channel, service and customer experience.