By Linda Eagle
It seems as though everywhere you turn, you can see the world trying to "go green." Cars, such as the "Smart Car" have been introduced to cut back on emissions, many supermarkets now offer customers reusable bags for their groceries and manufacturers are pushing "energy efficient" versions of common household items such as dishwashers and dryers. Even schools around the world are educating students about the importance of preserving the environment around them through acts such as recycling and electricity conservation.
Financial institutions around the globe are beginning to catch the green wave as well, by offering green products and services in an attempt to appeal to more environmentally-friendly consumers. However, many financial institutions in the U.S. are still unaware of the dramatic impact that they can have on their consumers and the environment. The U.S. can take a lesson from the many countries around the globe that are already going green by offering green products and services. By improving upon the efforts and strides that are already in existence overseas, financial institutions in the U.S. can make a huge difference in the consumer banking experience by contributing to the health of the environment that bank customers live in.
What the Customer Wants
As the globe continues to go green, the majority of customers appreciate financial institutions that are willing to offer products and services that have the welfare of the environment in mind and not just an end goal of making a profit. According to a 2007 poll conducted by the Yale Center of Environmental Law and Policy's Environmental Attitudes and Behavior Project, 81% of Americans feel that it is their responsibility to take action against environmental challenges, with these results suggesting that many Americans want greener products and they are prepared to spend money to try new technologies that will help to benefit the environment.
Energy-efficient mortgages, green car loans, eco-savings deposits, alternative energy venture capital, and green credit cards are at the forefront of innovative products and services currently being offered at financial institutions throughout the world. According to a report released by the North American Task Force (NATF) of the United Nations Environment Programme Finance Initiative, these products and services help the environment, save customers money, increase profit share and generate profits while improving brand recognition and enhancing reputation.
It is important that financial institutions educate customers on these types of products and services and train their employees on what is offered and how it will benefit the customer. Banking is a highly competitive business, and institutions must constantly offer a variety of new products and services to attract and retain customers. Offering a multitude of green products and services is a surefire way of ensuring that institutions not only maintain their current customer bases, but increase them as well.
Learning from Global Efforts
Foreign financial institutions have proven successful in the development of green products and services because they recognize the benefits to going green and the many opportunities that arise from doing so, rather than overlooking environmental risks like many U.S. banks sometimes choose to do. American banks usually gravitate towards community economic development instead of environmental initiatives. Although these actions have helped banks gain a large impact socially, many banks fail to realize that focusing only on the social side of banking drives away customers concerned with environmental issues. What financial institutions in the U.S. must do, according to the NATF report, is capitalize on green financial product and service opportunities.
Financial institutions in areas such as Europe, Japan and Australia are leading the way in the development and marketing of green products and services. One of the main reasons for this is due to the fact that the governments of these countries are more closely involved in the development of bank products that benefit the environment.
"Green" Steps
One of the first steps that a financial institution can take towards becoming green is instituting an Environmental Department, charged with designing environmentally-oriented products and services. Environmental issues are becoming increasingly more important to consumers across the country in these tough economic times as people are realizing the drastic difference that small changes can make. Establishing an Environmental Department will enable banks to help save the environment and make the world a better place for future generations, while simultaneously saving and earning their customers money.
It is vital that banks recognize the need to implement environmentally-friendly products and services before customers begin expressing a need for these services. Establishing these services before demand increases is an excellent way for financial institutions to stay ahead of the competition and maintain and expand their customer base. However, one challenge that financial institutions may face will be creating successful and extensive market-based solutions that cover a vast range of environmental issues while simultaneously pinpointing and acquiring new business opportunities that benefit consumers.
The key to properly marketing green products and services to customers is to package them like traditional products and services. A financial institution needs to evaluate what attracts its customers to the services it already offers and devise a way to turn these services green. It's important to remember that what customers want is low-risk banking with accessibility, flexibility, virtual access and the ease of being able to manage their finances on their own. According to the NATF report, an excellent way of introducing these new green products and services to customers is to offer them the opportunity to participate in green seminars and workshops. These seminars and workshops often host discussion forums that enhance customer knowledge, understanding and acceptance of these new services.
What is a "Green" Product or Service?
In order to qualify as a green product or service, the item must offer the customer a transparent option to reduce the indirect impacts of their banking activities, reduce negative environmental impacts or provide environmental benefits according to the NATF.
Energy-Efficient Mortgages (EEMs)
One of the most popular forms of a green banking product is a green home mortgage. In regards to retail banking, green home mortgages, or Energy-Efficient Mortgages (EEMs) as they are commonly known, offer a significantly lower interest rate for customers who purchase new energy efficient houses or invest in green power or energy- efficient appliances. In order for a financial institution to make this option even more appealing to customers, especially those in the market for a new home, it should promote green mortgages by covering the cost of switching a house from conventional to green power.
Green Credit Cards
Green credit cards are another new initiative that has begun to sweep the globe. The incentives to having a green credit card are infinite. Many banks in Europe offer emissions offset programs, provide discounts and grant low borrowing rates to customers who purchase green products and services. Strides have been made in the U.S. as well, with some banks offering to donate cardmember "rewards" to organizations that are dedicated to improving the environment or allowing cardholders to redeem these rewards for "green" products.
Deposits
Deposits are another bank product that is going green. For instance, some Australian banks offer environmental deposit products. According to the NATF, for every dollar spent, the bank lends the equivalent to support sustainable agricultural practices. Several banks in the U.S. are already ahead of the competition, offering fully-insured deposits to energy-efficient companies that strive to conserve natural resources and reduce waste and pollution. These banks have increased their clientele in offering such services and have attracted the attention of other financial institutions across the country.
The Final Word
Easing customers into the world of green financial products and services requires a financial institution to become more aware of any obstacles, such as insufficient product information, that could stand in their way of appealing to customers and remaining on top of these issues. It is vital for employees to be properly trained on the new green products and services that an institution may be offering. Having a knowledgeable staff will sustain customer confidence and heighten the institution's level of credibility as it makes the green transition.
Dr. Linda Eagle is Founder & President of The Edcomm Group Banker's Academy-a 22-year-old education and consulting firm dedicated to serving Banks, Credit Unions, Money Services Businesses (MSBs) and all areas of the Global Financial Community with thousands of generic and customized training programs in areas such as BSA/AML, Regulatory Compliance, Teller Training, Systems Training, Sales and Service Training, and many more.
Edcomm Banker's Academy is headquartered in New York, NY. For more information, email linda.eagle@edcomm.com or call +1.212.631.9400.
Article Source: http://EzineArticles.com/?expert=Linda_Eagle
No comments:
Post a Comment