Green Banking Still a Concept, Not a Practice
A new report by Javelin Strategy & Research examines green banking issues, including consumer habits, green banking behaviors, and recommendations for financial institutions seeking to attract environmentally conscious consumers.
Researchers found that although most consumers expressed an interest in adopting green banking behaviors, three out of four consumers still receive paper statements. According to Javelin, if every U.S. household stopped receiving paper bills and statements, 687,000 tons of paper would be saved every year – enough to circle the Earth 239 times.
"Green banking clearly has a direct, positive effect on the environment, but the benefits go much further, reaching into security and cost," said Jim Van Dyke, president. "Banks will save money every time a customer switches to electronic statements and transactions, and consumers significantly reduce their risk of becoming a victim of identity fraud by going paperless and using online banking services – everybody wins."
While environmental issues have grown in importance with bank customers, green banking habits have yet to take hold. The report finds that this is largely because consumers are unaware of how they can make a difference, and financial institutions have yet to find incentives that compel customers to participate.
"Most consumers want to do the right thing, but if the process appears confusing or inconvenient, they simply aren't going to bother changing their banking habits," said Mark Schwanhausser, research analyst. "In many ways, it's up to banks to influence consumers. They must offer tangible, compelling 'green' options and make them as simple as screwing in a CFL bulb."
Greener habits include the following:
• Turn off paper statements.
• Switch to direct deposit. Bonus: In most cases, your money is deposited into your account earlier through direct deposit.
• Start using online banking. Save money on postage and reduce the possibility of identity fraud.
• Skip the receipt and deposit envelope. Recently, many banks have installed ATMs that don't require envelopes for deposits.
• Try mobile banking.
Javelin researchers believe availability, accessibility, and complexity are the central challenges stalling the adoption of green banking behavior. Financial institutions must focus on products and promotions that speak directly to environmentally conscious consumers, including "green audit" calculators to help consumers compute the environmental impact of their banking behavior, a one-stop paper statement shut-off option for all accounts, and green banking marketing campaigns that reward customers for eco-friendly practices.
The report is mainly based on data collected from a random-sample panel of 2,350 respondents targeting representative proportions of gender, age, and income as compared to the overall U.S. online population.