How Banks can drive Customer Retention in times of uncertainty

The financial industry stands at the center of driving meaningful climate action, not just because of its reach, but because of the fundamental connection between money and behavior. 

Every individual financial transaction represents a choice that impacts both personal wellbeing and environmental sustainability. As consumers increasingly vote with their money, choosing products and services that align with their values, banks have a unique opportunity to facilitate positive change.

But this opportunity comes with a challenge. While transaction data provides powerful insights into environmental impact, data alone cannot drive change. Data itself will never save the planet, only humans can do that, and data can serve as a tool to help guide their behaviors. This insight points to a larger transformation in banking: the evolution from being simply a home of transactions to becoming a platform of transition, where banks can help shape the relationship between customers and their money in more meaningful ways.

The path to a more sustainable economy starts with information, but success depends on inspiring customers to not only act, but believe in their ability to create positive change.This is particularly crucial because financial services often feel abstract and disconnected from daily life. Customers know they can achieve more with their money but struggle to understand how. 

By connecting financial decisions to environmental impact, banks can make money management more tangible and purposeful. When sustainability features are integrated into banking apps, they transform routine transactions into opportunities for positive impact. This helps customers understand where they can do better next month, creating a cycle of continuous improvement rather than guilt or overwhelm.

The science behind this approach is compelling. Personal finances and climate impact represent two leading causes of customer stress, and research shows this stress literally reduces cognitive capacity for decision-making. When customers feel overwhelmed about money, their ability to make thoughtful decisions about sustainability, or just about anything else, diminishes significantly.

Understanding how these concerns interact is crucial for banks. When customers enter their banking environment, they're already thinking about finances and often experiencing worry. Adding climate considerations could feel like another burden—unless it's designed thoughtfully. The solution is to focus on creating features that build on each other rather than compete for attention.

Behavioral science shows us how to make this work. Rather than promoting abstract goals, successful banks help customers identify specific, achievable actions. Something as simple as bringing lunch to work to save a small amount every day can build confidence in making positive changes. While customers won't calculate environmental impact during busy shopping trips, simple tools that provide immediate feedback can guide better choices. 

For example, a family of four switching to vegetarian meals could save around 12 euros per day–money that could then be directed toward long-term goals like a child's future housing needs. At the same time, this simple change significantly reduces their CO2 emissions, creating a win-win scenario that motivates lasting behavioral change.

When customers see how sustainable choices benefit their financial goals, they're more likely to maintain those behaviors and build savings. The combination of environmental and financial benefits creates a powerful motivation that drives continued engagement.

This thoughtful approach creates a virtuous cycle of engagement and growth. It starts with digital engagement–customers check their banking apps more frequently when they can track both financial and environmental impact. As they begin making more mindful consumption choices, they typically discover opportunities to save. These discoveries can drive deposit growth while complementing competitive interest rates. Increased savings help reduce financial stress, making customers more receptive to additional initiatives such as sustainability efforts, creating multiple touchpoints for banks to deepen customer relationships.

The impact compounds over time. Working with behavioral science demonstrates a serious commitment to supporting customers, leading to more loyal relationships. Customers who actively engage with sustainability features show stronger loyalty to their banks, particularly among younger demographics who prioritize purpose-driven banking. This enhanced retention comes from helping customers align their spending with their values, creating relationships based on more than just transactions.

The integration of climate action and financial wellbeing through behavioral science isn't just about meeting ESG goals–it's about driving core business metrics. Banks that implement this approach are seeing increased digital engagement, stronger customer retention, and higher deposit growth from more engaged customers. Through partnerships with leading organizations like UNFCCC, WWF, and Mastercard, Doconomy helps banks transform sustainability features into tangible business value.