A new consumer survey from PA Consulting (PA) shows that 93% expect sustainable financial services to become the norm. Almost half see this happening by 2025. However, it also appears that consumers are struggling with a knowledge gap regarding the possibilities. Financial service providers should address this by offering better information and innovating in the area of ethical and sustainable financial products.
Responses from 3,500 European consumers (including 500 Dutch) indicate that all respondents want to live more sustainably. 63% are looking for more sustainable options for products and services, while over half prefer to buy financial products from providers who prioritize sustainability. Despite these good intentions, most consumers do not realize how much influence their financial decisions have on the climate. Only a third of people believe that their personal financial choices impact the climate, and only 42% see investing as an option to positively influence the environment.
The research identifies several key barriers to the acceptance of sustainable financial products:
- Lack of information: 57%
- Pricing: 62%
- Consumer trust: 57%
- Availability: 56%
- Accessibility: 55%
Additionally, 55% of consumers find it unfair to pay a premium for sustainable financial products or services. And while 64% believe that financial service providers play a critical role in the movement towards sustainable living and conscious consumption, 53% feel that they do not engage sufficiently in the public debate.
Since the majority of consumers (53%) indicate that there is an urgent need for new, sustainable financial products, financial service providers must address the lack of knowledge and trust among consumers. Only then can they transition to sustainable financing while strengthening their position as positive societal forces.
Mark Griep, head of PA Consulting Netherlands: "It makes us think that this research shows a gap between consumer expectations and their trust in and understanding of available options. Consumers do not realize how significant the impact of their financial choices can be on the climate. This impact is many times greater than other lifestyle changes, but there is a lack of knowledge and choice. Nevertheless, they want to make choices that matter. Service providers must therefore act quickly and seize their opportunity to attract and retain conscious consumers and take on a socially responsible role."
Hans Burg, Agile & Digital Transformations Lead at PA Consulting: "The pressure to make sustainable financing mainstream within a few years is coming not only from consumers. Non-financial reporting obligations and rules to prevent 'greenwashing' are on the horizon, while other banking regulations will likely also focus on sustainability and ESG.
"This research underscores that there is an underlying demand for financial products and services with a positive societal impact. If service providers do not meet these expectations, customer retention, compliance, profit, and growth potential are at stake. We see three core initiatives that companies can take to make the greatest impact: build their credibility, provide more information, and continue to innovate. This requires investment and ingenuity, but it is crucial that the sector makes the shift now."
The report, Financial Services can change the world, can be downloaded here.
