Image credit: Corporate Finance Institute
PETALING JAYA: More than three quarters (77%) of Malaysian consumers want their bank or financial institution to become more sustainable in the future, while 65% would consider switching to a bank with a stronger commitment to sustainability, according to a new report from cloud banking platform Mambu.
The report surveyed over 500 participants from Malaysia on their attitudes to green finance globally, which revealed that while most consumers were in favour of greener financial options, they have little trust in the industry’s sustainability credentials, with 74% of Malaysian consumers believing their current financial institution is guilty of greenwashing.
Greenwashing is defined as the process of conveying a false impression or providing misleading information about how a company’s products, aims and policies are environmentally friendly.
Three fifths (61%) 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%) have already knowingly banked with a financial institution or made use of a sustainable banking product or service. However, just over two in five (42%) consumers think that their current bank or financial institution clearly communicates its sustainability commitments, and only 37% know what climate pledges they have publicly announced or committed to.
“Our research shows that consumers are increasingly looking for ways to make greener financial decisions, but remain skeptical 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,” said Mambu director of sustainability Anna Krotova.
However, while 45% of Malaysian consumers have heard of either green or ethical finance, there is some confusion around the terminology used, with almost a third (32%) 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 as only 30% of people in Malaysia have knowingly made use of a sustainable banking product or service. But, of those that have, the vast majority (81%) of Malaysians were more satisfied with these services than traditional banking products.
Nearly one third (30%) of Malaysian consumers have already embraced green finance solutions, and the majority (61%) said 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%) of Malaysian consumers concerned their bank is guilty of greenwashing there’s clearly some work to do on changing the narrative, but with 65% of Malaysian consumers willing to consider changing banks to a more sustainable financial institution, the business case is clear,” said Mambu commercial director William Dale.
When it comes to the most in-demand green financial products, Malaysian consumers cite sustainable credit and debit cards (50%); green savings accounts and bonds (48%); and green loans (35%) among the offerings they’d most like to see.
Source: https://www.thesundaily.my/home/malaysian-consumers-want-their-banks-to-be-green-report-LY9274793