Global

Sustainability – A Byproduct of Digitisation in the Finance Sector

March 07 2022

Part of our Banking, Financial Services, and Insurance Series

As more global climate-action strategies emerge, an increasing number of client-facing solutions encouraging sustainable behaviours for the finance market are gaining traction and achieving success. From online wallets that plant trees on behalf of their customers with every few transactions, to banks providing cashback rewards and discounted interest rates to cardholders purchasing more eco-friendly products, key players in the sector have found their own creative ways to bring positive change to the environment as well as to their clients. Impressive as that may sound, this way of promoting sustainability is not the only notable one. There’s a much more integrated approach that we don’t talk about enough – achieving sustainability with a digital-first operational approach.

Within many sectors exists a well-proven causality between going digital and enforcing efficient cultures as well as creating smoother workflows. In fact, 40% of executives believe that the top and primary benefit of digital transformation is improved operational efficiency [1]. What many of these leaders are missing out on, however, is that this digital-first approach also has the low-hanging fruit of the long-term sustainability they are searching for in different, commonly more exhaustive solutions [2].

“A systematic approach towards cost-savings in the operational side of the business is bound to encompass the lot, if not all, of the contributors to waste and pollution that hinders sustainability. Understanding this connection between cost-efficiency and sustainability is the first step towards eliminating their overlapping roadblocks and achieving success in a single sweep.”

Glenn Mindegaard Post, Engagement Director, Monstarlab Denmark

Technology is a powerful driver of sustainable organisational practices

Though more of us might be more familiar with how AI, for example, can be used in climate research to perform complex processes aimed at minimising global carbon emissions [3], there are many ways technology can promote significant positive change in more proximate settings such as the workplace.

Digitised processes are reducing resource consumption

Organisations in the sector are migrating data operations to cyberspace with their custom digital platforms, automated processes, and cloud services, among other valuable integrations. And this was primarily initiated to promote data management and operational efficiencies as well as cost-effective cybermarket penetration – as necessitated by the changes brought about by the COVID-19 pandemic in how clients now manage and interact with their finances.

According to a Gartner survey, 56% of CEOs say digital initiatives have led to increased revenue [4]

But there is a cherry on top of all of this; without additional effort, digitisation is also addressing the alarming overconsumption of material resources like paper and ink. Both of which are made and processed in increasingly harmful methods to which losses in biodiversity and pollution are also linked [5]. 

The average office worker goes through an estimated 10,000 sheets of paper annually [5].

According to research, each regular office worker generates an average of two pounds worth of paper products every day. With nearly 50% of all office-printed documents reaching the bins in just 24 hours [5]. This makes up over 70% of the total waste in the majority of companies. That being said, digitising processes and their implied promotion of paperless transactions directly counters resource overconsumption – not just of natural materials but also overspent budgets on paper and ink procurement and waste management.

10% of today’s banking transactions are still done manually - utilising analogue methods in loan processing, statement send outs, and account opening. This continued use of paper is costing employees up to 40% more time spent locating documents [6].

Remote accessibility is lowering transit carbon footprint

According to subject matter expert calculations, transit aversion from 3.9 million people working from home at least half the time can reduce greenhouse gas emissions equivalent to 600,000 cars on the road for a whole year [7]. In a recent report, the U.S. Environmental Protection Agency (EPA) has discovered that 28.2% of all greenhouse gas emissions are attributed to the transportation sector [7]. By enabling a mobile workforce with digitised operational systems and internal organisational platforms, companies offering their employees full or even partial remote access to their work are causing a significant reduction in greenhouse gases from transportation as well as a spike in employee productivity. 

An excerpt from The Environmental Implications of the Return to the Office by Sarah Holder of the Bloomberg CityLab published on March 29, 2021, 9:00 PM GMT+8 [8] “The average U.S. round-trip commute time is about an hour; for those who drive alone to work, like the vast majority of Americans, that equates to nearly 3.2 tons of carbon per year, per person. Global Workplace Analytics previously estimated that if all U.S. residents who could and wanted to work from home started doing so for half the week, “it would have the greenhouse gas equivalent of taking the entire New York State workforce off the road.” For a more localized example, take a San Francisco office of 2,000 employees that moves to a hybrid model of three in-office days. According to Watershed’s calculator, workplace emissions could drop by 13%.”Additionally, a recent survey of 2,100 people who worked remotely during the pandemic also found that 95% have observed higher or or equal productivity working remotely compared to working in the office. According to the respondents, the following advantages of remote access to work made possible by technology are what contributed to their increased productivity and performance [7]:

Additionally, a recent survey of 2,100 people who worked remotely during the pandemic also found that 95% have observed higher or or equal productivity working remotely compared to working in the office. According to the respondents, the following advantages of remote access to work made possible by technology are what contributed to their increased productivity and performance [7]:

Key Takeaways

“Sustainability need not be forced and is possible with a little mindfulness. Using technology to achieve it will catalyse its occurrence with the least amount of effort.”  

Saad Kamal, Managing Director, Monstarlab Singapore

  • 27% of companies say digital transformation is a matter of survival [9], and this is now translating into more meanings than one. Digitisation now will not only be necessary in future-proofing your business but in future-proofing the planet as well.
  • Tackling climate change is a multi-stakeholder task that firms in finance have to achieve together with their employees and not just clients.
  • The implied sustainability benefits of digital transformation in the sector are clear, and they are worth pursuing.

Meet the Experts

Saad Kamal
Follow on LinkedIn | saad.kamal@monstar-lab.com

Saad, Managing Director of Monstarlab Singapore,  has extensive experience in driving digital transformation for government and large multinational organizations alike. Delivering world-class and award-winning digital solutions for various industries including banking & insurance, transportation, and smart places.

Learn more about Monstarlab Singapore.

Glenn Mindegaard Post | BFSI Vertical Lead
Follow on LinkedIn | glenn.mindegaard.post@monstar-lab.com

Glenn has a solid economic & financial theoretical foundation strengthened with over a decade of experience working with Denmark and the Nordic Market’s largest banks and financial institutions. He has a deep understanding of the business challenges, needs, and goals and the acumen to translate those into future-proof digital solutions.

Learn more about  Monstarlab Denmark.

Read more about banking, financial services, and insurance here

Endnotes:

[1] PTC, “Digital Transformation Report by CorporateLeaders and PTC”, n.d.
[2] SAP, ​​“SAP Study Says Up to 93 Percent of Companies Consider Intelligent Technology Key to Digital Transformation”, 2019
[3] Diplo, “Digitalisation powering environmental protection”, 2021
[4] Gartner, “Gartner Survey Shows 42 Percent of CEOs Have Begun Digital Business Transformation”, 2017
[5] RoadRunner Smarter Recycling, “THE FACTS: OFFICE WORKERS & THEIR WASTE GENERATION”, 2021
[6] BusinessWorld, “Cutting Costs in Financial Services Starts with Paper”, 2017
[7] FlexJobs, “The Environmental Impacts of Remote Work: Stats and Benefits”, n.d.
[8] Bloomberg CityLab, “The Environmental Implications of the Return to the Office”, 2021
[9] Digital Marketing Institute, “The What, Why & How of Digital Transformation”, 2016

Author

Andrea Nalupa

Andrea Nalupa

Marketing Manager

Andrea is a Marketing Manager at Monstarlab, specialising in research and content focused on technical and business insights across various sectors.

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