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There’s no doubt that, globally, we are seeing a significant shift towards sustainability across the whole of society, with an increase in interest in more sustainable practices in relation to climate change, the economy and social inclusion.

Beyond the buzz: green finance in practice

While sustainability used to be a ‘nice to have’ in business, an increased focus on ESG metrics means that embedding sustainability into business practices is now an essential component of any strategy.

The financial services industry has an important role to play in shaping the green economy and particularly in enhancing financial resilience to climate risks. But just what does ‘green finance’ mean? To understand this emerging type of banking, let's look at some of the green financial offerings that are in the market already – products like green loans, green bonds, climate bonds, transition bonds, and sustainability-linked loans or green equity funds.

These products aim to incorporate environmental, social and regulatory issues, driving benefits for the whole of society.

Asian financial institutions leveraging green finance for growth

In Asia, we’re seeing increased efforts from organisations in all industries to evolve their businesses to encompass greener technology and business models. By providing green financial solutions through their core expertise – from lending to catalysing capital markets – financial institutions can tap into an immense opportunity, while also creating positive impact.

Reflecting the critical nature of this space, three of Singapore’s largest banks have recently launched new green products to market - OCBC’s Eco-Care Loans to promote sustainable living, UOB’s Green and Sustainable Deposits solution for its corporate and institutional customers, and DBS’ Green Guarantee products. UOB has also pledged to stop backing new upstream oil and gas projects – the first major bank in Asia to turn its back on oil and gas.

How technology can help banks go greener, faster

In order to truly embrace the ‘green finance’ movement, it is imperative that banks and financial institutions have a digital transformation plan in place. By adopting digital solutions, banks can harness technology to acquire and process information at a greater pace, with reduced operational costs, and less negative impact on the environment.

A cloud-native, technology-enabled approach will also allow banks and other financial institutions to build a strong reputation within the financial services industry.

Alongside the existing financial and fintech ecosystems, there is a growing ‘green fintech’ ecosystem in Asia, which has already produced a number of innovative green solutions, including green digital payments, investment solutions, lending and even green digital asset solutions. As this green fintech ecosystem grows and develops, collaborations and partnerships across the entire industry will continue to grow in importance.

Mambu - an enabler of green finance

Mambu recognises that climate change is one of the biggest challenges the world is facing today, and we are proud to be an effective enabler of green finance. Our cloud-native banking platform enables a 40% carbon footprint reduction when compared to on-premise computing equivalents.

In the financial services industry, it is vital to continuously evolve in order to meet shifting consumer and market demands; implementing ‘sustainable digitalisation’ by adopting automation, artificial intelligence and blockchain can both boost operational efficiency and improve performance against ESG metrics.

With the right technology in place rapid change can occur, leading us swiftly towards a radical new future of sustainable banking.

Revisit our Disruption Diaries report on sustainable banking Is the grass greener on the sustainable side?

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Jay Kie Tan
Head of Business Development, Mambu APAC
Jay Kie Tan