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05.06.2023 10 min read

Sustainable Banking

Potential for Swiss Financial Institutions

Potential for Swiss Financial Institutions

Nachhaltiges Banking: Potenziale für Schweizer Finanzinstitute

Sustainability is the major issue of our time and affects everyone – including those in the financial sector. Our new website on sustainable banking shows why this is so, what opportunities a sustainable approach unleashes for Swiss banks and how they can implement it effectively, e.g., using tools such as the Carbon Footprint Manager. Read an overview here.

Sustainability Is a Must for Swiss Banks

Sustainability is on everyone’s lips and has long since arrived in the financial industry. The primary focus is on the existential risk to humanity posed by climate change. Consumers, governments, and investors are therefore increasingly demanding that companies commit to preserving our planet. Alongside protecting the climate, other dimensions to sustainability such as waste avoidance and social sustainability must also be taken into account. Customers are demanding investment options and ETFs that satisfy sustainability criteria. Regulatory pressure is also mounting, particularly with regard to reporting.

Many market players have already positioned themselves accordingly. Various eco-banks and agile digital banks are successfully addressing the issue of sustainability, enabling them to strengthen their competitive position. It is abundantly clear that established institutions must now urgently follow suit.

Sustainability Is Changing Business Models

At the same time, more and more established banks are now recognising that sustainability is much more than a trendy topic or even a threat. On the contrary, if these institutions offer sustainable banking themselves, they can reap a whole range of valuable strategic benefits. In doing so, however, they must first assess the implications for their business model. The new focus on sustainability has a major impact on

  • Financing: Banks can finance sustainable projects by granting loans and through their issuing business
  • Risk management: Sustainability risks such as climate events or evolving customer preference influence the risk profile of business customers
  • Business operations: Banks must make their operations more sustainable (e.g., energy supply, vehicle fleet)
  • Market presence: Banks must communicate their sustainable activities in an effective manner, for example in customer dialog and through an appropriate marketing strategy

Seizing the Opportunities – With Sustainable Banking

The good news for banks is that their unique position at the heart of the financial flows of our economy enables them to achieve a strong leverage effect in terms of sustainable transformation. We recommend various practical steps to achieve this:

  1. Define sustainability goals
  2. Formulate positive and negative criteria
  3. Communicate positive impact
  4. Involve customers
  5. Shape sustainability down to the finest detail

This way, banks make a decisive contribution to society, promote environmental protection, and contribute to the common good. What’s more, they themselves benefit from sustainable banking along the way:

  • Sustainable banking drives customer loyalty through relevant offerings
  • Sustainable banking generates new business, revenue and growth opportunities

From an economic perspective, these benefits are of major importance. The business environment for banks continues to be characterised by volatility and uncertainty, which is why the industry is desperately looking for future-oriented revenue streams.

Sustainable banking helps find solutions to this problem. The potential is entirely realistic, as eco-banks have proven with their now tried-and-tested business model. However, how can established banks catch up with them? One particularly effective way is to give customers tools which they can use to actively make a tangible sustainable contribution themselves. This is exactly the approach adopted by Contovista’s Carbon Footprint Manager.

Digital Sustainability Tool for End Customers: The Carbon Footprint Manager

The Carbon Footprint Manager analyses an individual’s carbon footprint based on transaction data. This is possible because the data mirrors the spending of bank customers and therefore reflects their consumption behaviour to a greater or less extent. The analysis uses high-quality Swiss reference data and digital technologies from the sustainability specialist Deedster – as well as customers’ own transaction data. The data-driven banking approach with AI-supported categorisation ensures data is allocated correctly. Contovista’s Personal Finance Manager (PFM) now enables customers to identify their CO₂ contribution in their financial cockpit and to effectively manage it.

The Carbon Footprint Manager makes use of one of the great strengths of established banks, namely the high level of trust they have among their customers and their important role as a reliable principal bank. They can build on this position by using a personalised sustainability tool such as the CO₂ Manager.

The functions are versatile and practical: customers can use the PFM to create a budget and set up a saving space. The Carbon Footprint Manager provides personalised insights and tips that help customers achieve the goals they have set themselves. Gamification elements provide additional motivation for customers.

Leveraging External Expertise: Success Through Cooperation

Using digital transformation and new data-driven tools as levers for sustainability strategy: this is an effective approach true to Contovista’s motto: Understand. Coach. Enable. The customer-centric relevance of your offering is at the heart of sustainable banking. When it comes to implementation, it makes sense to rely on external expertise, such as that offered by Contovista, rather than having to undergo lengthy in-house development work.

We ensure that transaction data is accurately linked with the most advanced data-driven banking technology. From a technical perspective, banks can implement Contovista’s solution seamlessly via an API integration into an existing e-banking system. Even we draw on the expertise of the specialists from our partner Deedster to address the issue of sustainability. Here you can see a recent interview with Daniel Dellham, Co-Founder and CTO of Deedster:

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Interview: Daniel Dellham, CTO & Co-Founder, Deedster

If you want to learn more about sustainable banking for Switzerland, visit our website where you’ll find a comprehensive treatment of the subject.