Voice of the Industry

Sustainable payments – what does that mean exactly?

Wednesday 10 July 2019 07:33 CET | Author Melisande Mual | Voice of the industry

David Lais, OfnK’s CEO, presents his view on how modern technologies within the payments and finance industry can also be environmentally friendly

Nowadays, more and more companies talk about “sustainability” and start looking into options to change their products to become more environmentally friendly and create a positive impact on the society. The market is adapting to the consumers, who are increasingly looking for sustainable alternatives, while purchasing new products.

Generation-Z (mid-90s to mid-00s) is demanding that companies should be accountable for their environmental impact. They seek sustainably sourced fair trade products, which also take into account decent working conditions. According to Forbes, Gen Z is already on track to become the largest generation of consumers by 2020 and will account for USD 29 to USD 143 billion in direct spending. Moreover, Forbes also says “ninety-three percent of parents today say their children influence family and household purchases, according to a report by CASSANDRA, meaning a significant portion of overall market spend is because of these youths.” No wonder companies are looking to adapt to the “sustainable trend” and to the new consumers‘ needs.

Taking these large numbers into account and the buying power they will have, I believe it is flat out wrong to refer to this change in consumption as a trend. Like it or not, we are in the midst of a socio-economic change and sustainability is at the forefront of this change. More importantly, we should be paying closer attention to how the market is changing. Let me explain why.

For the planet and for the sake of our customers, we, as an industry, need to adapt

Gen Z is the first “digital native” generation and has adapted to the mass of information and technology. They are able to filter out the “noise” and use the information and data to become active content creators shaping the ecosystem directly. Experts even compare this shift, similar to the generations after the first book print. What this means is that our world is getting more and more transparent. The previous generations did not have the tools and possibilities we have today and had no choice, but to become a more passive consumption-based generation. The main message was simply that happiness depends on our social & financial well being. Whether or not this increased our level of happiness can only be answered by ourselves, but as a result, our consumption habits have had a devastating effect on our planet and within our lifetime, we will feel the negative impacts.

Whatever the exact motivation behind Gen Z is, might actually be irrelevant, because the direction of the market and scientific research studies are showing a clear trend, which means, we as an industry need to adapt as well - for the planet and for the sake of our customers.

We, the financial industry, are the layer between consumers and day to day consumption, as we provide the fuel and the rails for the modern economy

If you are now wondering what a bank, payment institution or technical service provider in the financial sector can do, you need to bear in mind that we are the “layer” between the consumers day to day consumption, as we provide the fuel and the rails for the modern economy. This not only gives us depth insides which can be used to drive an environmentally friendly economy, but it also enables us to promote and boost markets in the right direction. Pioneering financial institutions are already starting to change their investment portfolios and guidelines, ensuring that all their loans consider - first - the environment, before they look at profit models. Nokia just announced to have signed a EUR 1,5 billion multi-currency revolving credit facility. What makes this an unusual deal is, that the costs are linked to the efforts matching their environmental targets. According to McKinsey, those mechanisms are enhancing returns and strengthening risk management. Banks and their lending/investment strategy are at the forefront of an environmentally friendly society.

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To tackle climate change, we, as a species, need to work together, regardless of our origin, skin colour, religion or whatever unfortunate reason we find to differentiate from one another. And this is where we as an industry have an absolute sweet spot. We provide the rails of modern consumerism and thanks to modern technologies like machine learning and AI we are now able to use this vast amount of data to help build transparency and guidance for consumers to act more environmentally friendly. More and more startups are using payment data to build the necessary transparency consumers demand, in order to change their behaviour. Newcomer banks like Tomorrow from Germany, the Baltic Sea Card project, or organisations like Doconomy and the Organization for Sustainable Consumption are at the forefront to transform payment data into something insightful, that can be used to tackle climate change. Due to technological advances and digitization, banks and payment providers have the tools to build products that can change the world for the better. At the same time, we have the opportunity to fulfil the requirements of tomorrow’s consumers to build a banking or payment product they ask for.

We provide the rails of modern consumerism and thanks to modern technologies we are able to build transparency for consumers to act more environmentally friendly

Regardless if you believe in climate change or if you just want to work on your career, the Gen Z is knocking on our door and will be the customer and workforce of tomorrow. If companies don’t follow, they won’t only fail on selling, but also on acquiring and maintaining the best minds. Whatever your motivation is, we need to adapt to the new environmental needs - first because of our planet and secondly because of the market demands. Or to put it into Benjamin Franklins words “When youre finished changing, youre finished.”

About David Lais

src=/images/david-lais.jpgDavid is a serial entrepreneur and the founder of several innovative start-ups in the payment area. After a life changing event in 2015 he decided to change his focus and use his knowledge for good to start fighting climate change. His focus is on consumer education and the usage of modern technologies such as machine learning to help consumers understand their global impact based on their purchases by analyzing the underlying payment transaction. During the day he helps banks and financial institutions to adopt to the digital area.

About OfnK

vspace=2OfnK - Organisation fuer nachhaltigen Konsum (Organization for sustainable consumption) is a German non-profit organization dedicated to educating consumers about their impact on the environment based on their personal consumption habits. OfnK’s goal is to empower consumers to make a more conscious decision on what they purchase, making them more aware of their impact. At the same time OfnK provides alternatives and the possibility to directly improve on our actions to reduce our individual impact.


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Keywords: sustainable payments, David Lais, OfnK, banking, financial services, machine learing, AI
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