Sustainable finance focuses on financial investment in the long-term. Its essence has to do with funding businesses contributing to sustainable development as a way to use the economy to drive positive change. This involves lending support across healthcare, education, and even to small businesses. There’s no better time when this is needed than now.
Today, the pandemic has had a scarring impact on households and small businesses. Many people have lost their jobs, and a lot of small businesses are shut down for good. There is no better time for financial institutions to work to provide relief for less fortunate households and businesses. Not doing anything to make a positive impact on society at this time is not only unethical, but it could adversely affect the business in the long run.
This is evident from an EY research, which revealed that many consumers (more than half) value responsible banking and that their “purchasing patterns and financial institution loyalty will be impacted by financial institutions actively supporting the community.”
This research makes it evident that financial institutions investing and providing support to the community is not only ethical but will benefit such companies, business-wise.
Many consumers (more than half) value responsible banking and that their “purchasing patterns and financial institution loyalty will be impacted by financial institutions actively supporting the community.”
No longer business as usual
In the face of adversity caused by the pandemic, and the accelerating digital revolution that has already taken the world by storm, financial institutions must be at the forefront, taking measures to enhance the nature of their business. In a post-pandemic world, consumers will prefer to stick with the newer models of business since they’re less stressful and offer more comfort. In addition, they will provide strong support to companies that contribute to the betterment of the society and future generations.
Overall, this is a huge advantage for financial institutions as they can cut down on expenses and overhead cost of maintaining physical branch networks. The savings to be had as a result of these efforts can then be channeled towards driving sustainability initiatives that benefits everyone. There’s no better time to take advantage of technology and invest more in digital solutions in banking than now. It’s no longer business as usual everywhere, and financial institutions must leverage on these changes for the benefit of all.