Regulators are increasingly requiring banks to track the impact of their lending on the environment, which requires better data and analytics.
The United Kingdom’s leading banks are actively talking about their purpose. As a principal partner, NatWest is heavily involved in the 2021 United Nations Climate Change Conference (COP26) in Glasgow, Scotland. In fact, NatWest is the conference’s only banking partner.
NatWest’s proclaimed ambition to become the world’s leading bank in addressing climate change manifests itself in offering financial support for the transition to a net-zero carbon economy and committing to its own goals: making its operations climate positive by 2025, cutting the climate impact of its financing activity by 2030, and reaching net-zero financed emissions by 2050.
Alison Rose, chief executive of NatWest, has spoken at length about the importance of building purpose-led banks.
“The way people live their lives has changed,” Rose said. “And their expectations of companies are changing too, looking for us to deliver not only financial performance but a positive contribution to society, benefitting customers and communities as well as shareholders. The future of this bank depends on us successfully delivering on both.”
Any organization interested in rising to these challenges would benefit from digital transformation. Whether expanding financial inclusion, connecting with customers, gauging investments or responding to climate change, financial institutions are more effective with rich, dynamic data and cloud computing.
A bank’s response to a customer’s plea for help, especially during distressing times, might not unilaterally change the public’s perspective of a particular bank or industry, but it might change the perception of that individual. Regardless, financial institutions shouldn’t be driven to have a positive impact on the world to win fans or favor—although that is nice. They should aim to leave the world better than they found it. The accolades and positive press will be byproducts.
The banking sector needs to return its focus to people and society. By harnessing new technologies, it can do just that.