Across the globe, financial institutions are facing a profound shift. Consumers—especially younger generations—are demanding more than just digital convenience and competitive rates. They want their banks and insurers to take a stand on sustainability, offering products and services that align with their values and contribute to a greener future. This is not just a passing trend; it’s a fundamental change in how trust and value are built in financial services.
Australia stands at the forefront of this movement. Recent research shows that 75% of Australians support banks committed to green initiatives, with this figure rising to 87% among those aged 18-28. The message is clear: younger customers expect their financial partners to play an active role in addressing climate change and social responsibility. Notably, 40% of Australians overall—and more than half of those under 45—are willing to pay more for access to socially responsible banking products. However, as green products become the norm, the expectation is that they should not cost more, with nearly half of respondents believing sustainability should be a baseline, not a premium feature.
As demand for sustainable financial products grows, so does consumer skepticism. Customers are increasingly wary of “greenwashing”—the practice of making sustainability claims without meaningful action or impact. For banks and insurers, this means that simply labeling a product as “green” is no longer enough. Institutions must provide tangible evidence of their commitment, ensuring that green products genuinely contribute to environmental goals. Transparency, measurable outcomes, and clear communication are essential to building trust and avoiding reputational risk.
Digital transformation is a critical enabler in the creation and delivery of genuinely sustainable financial products. By leveraging advanced data analytics, automation, and digital platforms, financial institutions can:
For example, digital tools can help banks monitor the carbon footprint of their lending portfolios or enable insurers to offer discounts for customers who adopt sustainable practices. These innovations not only meet regulatory and societal expectations but also create new revenue streams and operational efficiencies.
Sustainability is no longer a “nice to have”—it’s a driver of customer loyalty and long-term profitability. Research shows that consumers, particularly millennials and Gen Z, are willing to switch providers to support brands that share their values. As these generations become the dominant customer base, their preferences will shape the future of financial services. Institutions that act now to embed sustainability into their core strategy will be best positioned to attract, retain, and grow customer relationships.
Moreover, investors are increasingly scrutinizing environmental, social, and governance (ESG) performance. Financial institutions that demonstrate strong sustainability credentials are more attractive to both retail and institutional investors, further reinforcing the business case for green transformation.
While Australia is leading the charge, similar trends are emerging worldwide. In Europe, North America, and Asia, consumers are expressing a willingness to pay more for sustainable products, and regulators are raising the bar for ESG disclosures. The lessons from Australia—where consumer expectations are rapidly evolving—offer a blueprint for banks and insurers everywhere:
The green horizon presents a unique opportunity for financial institutions to lead with purpose, innovate with technology, and build lasting value for customers and shareholders alike. By making sustainability a core part of their business strategy—and backing it up with real action—banks and insurers can earn the trust of the next generation and secure their place in a rapidly changing world.
Now is the time to move beyond greenwashing and deliver the sustainable financial products and experiences that customers demand. Those who do will not only help shape a better future but will also unlock new avenues for growth and profitability in the years to come.