How banks can support customers to save money and carbon

How banks can help customers save money 

Financial literacy is the foundation of making informed financial choices regarding saving, investing and borrowing. Yet, only 1 in 3 adults globally are financially literate. Banks can help bridge this gap by offering customers educational resources and financial planning tools. Beyond education, banks can also provide practical support through financial products, such as flexible loans and credit options. These offerings help customers address immediate financial pressures as well as invest in long-term saving opportunities. By combining guidance with actionable solutions, banks can play a transformative role in improving customers' financial wellbeing. 

A less obvious but increasingly important way banks can support their customers is by encouraging sustainable choices—decisions that not only reduce environmental impact but also help customers save money. This dual focus enhances customer value and aligns with the growing demand for financial institutions to take climate action. 

‍Addressing misconceptions around sustainability 

There is a common misconception that adopting a sustainable lifestyle is expensive. While some 'green' products do come at a premium price, many impactful actions, such as conserving energy, eating less meat, and using more public transport, can actually save money. For example, replacing meat with plant-based meals just once a week could save £133 and 69kg of carbon annually. 

However, many individuals lack the carbon literacy needed to recognise how their everyday choices affect the environment and their finances. This is where banks can step in. By equipping customers with actionable insights and tools, banks can empower individuals to make decisions that foster financial and planetary wellbeing. 

Leveraging data to encourage sustainable behaviour change  

With access to customers’ spending data, banks can calculate the carbon emissions associated with different purchases and share these insights in real-time through digital banking platforms. This allows customers to understand the environmental impact of their spending and compare the carbon footprint of different actions. Consequently, improving individuals’ carbon literacy and informing more sustainable choices.

Banks can also use data to show customers the potential savings associated with different actions. For instance, if a customer frequently purchases petrol, banks could provide insights into the related carbon emissions and recommend more sustainable and cost-effective alternatives, like taking public transport. By linking these recommendations to both financial and environmental benefits, banks can engage customers more effectively. Also, combining savings from various actions can significantly contribute to customers’ overall savings goals and carbon reduction targets that customers are encouraged to set.

Making significant savings possible with green finance 

For larger investments, such as installing a heat pump or switching to an electric vehicle, the high upfront costs can be a significant barrier, especially in today’s economic environment. For example, installing a heat pump costs between £3,000 and £7,000, but it could save households £206 annually while reducing carbon emissions by 1,666kg. Banks can support customers by offering personalised green finance solutions and connecting them with trusted suppliers. ‍

The importance of personalisation 

In recent years, many banks have introduced campaigns to encourage home retrofits with attractive incentives. However, broad targeting has limited their effectiveness. For instance, a customer living in an older, energy-inefficient home might receive the same retrofit advice as someone in a newly built, energy-efficient property. Without tailoring recommendations to individual customers' unique circumstances, preferences, or financial capacities, these efforts can miss opportunities to resonate with and engage them effectively.  This is why offering customers personalised carbon insights, recommendations, and financial solutions is critical.

Achieving the level of personalisation needed to drive impact requires banks to consolidate and analyse both financial and non-financial data about their customers. While this is no small task, partnerships with green fintechs, like Cogo, present opportunities for banks to overcome challenges, create tailored solutions, and enhance customer engagement in their sustainability efforts.

Why supporting sustainability is a win for banks 

Helping customers save money and carbon creates a mutually beneficial outcome. Customers enjoy tangible savings and a better banking experience, while banks gain increased engagement, adoption of green products, and strengthened customer relationships.

These efforts also resonate with Gen Z—a key demographic that is both environmentally conscious and disproportionately affected by the cost of living crisis. Gen Z expect banks to provide more value than traditional financial services, in fact 70% expect banks to support their sustainability journey. Therefore, offering carbon and cost saving insights help attract this demographic.

Furthermore, helping customers reduce their carbon footprint contributes to banks’ own decarbonisation goals. With financed emissions averaging 700 times higher than direct emissions, it is crucial that banks encourage their customers to reduce their environmental impact. This is also critical for meeting regulatory requirements, where evolving regulations, like the EU CSDR and the UK Companies climate-related financial disclosures regulation 2022, require banks to evaluate climate risks and opportunities and report on the carbon emissions of their entire value chains. 

Ready to help your customers make savings?

At Cogo, we partner with banks to deliver impactful carbon management solutions that empower customers to make smarter financial and sustainable choices. With our tools, you can enhance customer engagement, build loyalty, and drive positive change for your business and the planet.