More than three quarters (77%) of Malaysian consumers want their bank or financial institution to become more sustainable in the future, according to a new report from cloud banking platform Mambu.
“Is the grass greener on the sustainable side?” report also found that 65% of respondents would consider switching to a bank with a stronger commitment to sustainability.
The report 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% of Malaysian consumers and 67% of global consumers believing their current financial institution is guilty of greenwashing.
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 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.
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.
Adoption of green finance is far from mainstream. Just over 1 in 4 (26%) consumers globally, and 30% in Malaysia, have knowingly made use of a sustainable banking product or service. But, of those that have, the vast majority (84% globally, 81% 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 accountable. Globally, nearly three fifths (58%) would like more control over how and where their money is invested, to align with their personal values, and over half (55%) would like a say on the types of green financial products and services their financial institution develops in future.
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.
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.”
William Dale, Commercial Director at Mambu, added:
“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.”
