Finance Monthly - April 2023

Pressure on Financial Services Unsurprisingly, the financial sector has come under a lot of scrutiny from regulators and the public alike, for a perceived lack of action and its role in supporting unsustainable practices. The issues have been kept in the spotlight not just by vigilante groups like Just Stop Oil, but also by recent examples like an active shareholder revolt at HSBC, pushing them to divest from energy companies. But it is not just activists and regulatory groups. There is significant proof in the data that consumers are seeking alternatives to the traditional banking orthodoxy. Customers of retail banks have shown strong demand for green finance products, with 45% seeking sustainable credit & debit cards, and 31% seeking green loans and mortgages. The focus on environmental, sustainability and governance (ESG) within investing has also ramped up year after year. We’re starting to see a new phase that we call ‘banking on purpose’, connecting boards and consumers in visions for a greener future, whilst increasing prosperity for the communities they support. ESG considerations are set to loom large over companies — this will be important to maintaining reputations at a consumer, shareholder and board level. Integrate Green into the Offering Promisingly, data reveals that 83% of new build houses in the UK are eligible for a green mortgage. However, £2.9 trillion of UK housing stock is currently ineligible, providing a significant opportunity for banks to serve these homeowners. Offering loans to support renovations that seek to improve the energy efficiency rating of properties can help FS institutions embed consumer-focused initiatives into their offerings, rather than having them as an afterthought. “Customers of retail banks have shown strong demand for green finance products, with seeking sustainable credit & debit cards, and seeking green loans and mortgages.” 45% 31% Fron t Cove r Fea t ur e 10 Finance Monthly.

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