Financial institutions know that achieving an excellent customer satisfaction score is crucial for longevity and business growth.
As such, you may be considering any number of strategies to improve customer happiness, from deploying AI chat to implementing loyalty schemes. The trouble is, the majority of FSIs have their sights on a similar set of strategies. To draw customers away from competitors, you need something that truly stands out.
Transaction-based carbon emissions reporting is a bold, innovative approach that is sure to gain your customers’ attention.
In this article, we break down four ways customer satisfaction and carbon emissions data intersect.
First, let’s talk about how you measure customer satisfaction and why it matters.
Measuring Your Customer Satisfaction Score
A Net Promotor Score is one of the key ways you can gauge customer satisfaction. This system — designed in 2003 by Fred Reichheld, Bain & Co. and Satmetrix Systems, and widely adopted since — measures customer loyalty by asking:
“How likely are you to recommend our service to a friend or colleague on a scale from 0 (very unlikely) to 10 (very likely)?”
Respondents are categorised as Promoters, Passives or Detractors. Scores are calculated by subtracting the percentage of Detractors from Promoters. The result is in a number between -100 and +100.
In 2019, Monzo’s score was +80 at a time when most other UK banks were averaging +4 (as of 2023, Monzo scores +67). Trends show challengers tend to score more highly, which not only reflects customer satisfaction rates, but is a leading indicator of customers switching over to these newer players.
Why Should FSIs Care About Getting a Good NPS Score?
“Having a customer-centric culture is more than just a good thing — it’s become a matter of survival.”
— Jim Marous, financial industry strategist and co-publisher of The Financial Brand
You can expect a good NPS score to have tangible results.
For example, Bain researchers found that “Promotor” wealthy banking customers would allocate an additional 45% of their household deposit balances to their primary bank compared to “Detractors”, as well as purchasing 25% more products. Plus:
- Higher NPS scores are linked to business growth. In most industries, NPS accounts for about 20% to 60% of the variation in organic growth rates among competitors.
- NPS survey responses can be used to predict when a customer is likely to cancel their service. Younger customers are more likely to switch providers if they are not satisfied with the products and services they receive. Twenty-five percent of Gen Z adults plan to switch their bank account in the next six months, compared to 15% for the general population.
- You can compare NPS results to others in the same industry to forecast industry leaders as well as up and coming competition. For example, the average score for B2C banking is +23.6, and for B2B it’s +46. The average across all industries is +32, with the top 25% of businesses seeing scores of +72 and above.
The Intersection of Carbon Emission Data and NPS
Typically, banks will approach the issue of customer satisfaction by deploying strategies to improve service levels or otherwise enhance the digital or in-branch experience.
Following rounds of customer feedback from NPS, user groups, surveys or otherwise, they may choose to:
- Bolster their omni-channel presence
- Embed AI into the customer support mix
- Introduce loyalty incentive programmes
- Create more personalised experiences
- Bring in additional training for staff
- Or, launch new products or features
Sound familiar? While addressing fundamentals like introducing more account types should absolutely be on your roadmap, we suggest this addition as a priority: utilising transaction-based carbon emissions data.
At Connect Earth, we’ve found with our own clients that when banks ask customers about providing carbon calculation reporting on their platforms, what they find is there is demand. In one survey, we saw more than 85% of banking customer SMEs saying they had a “strong interest” in gaining insights to enhance the environmental friendliness of their operations.
In actual fact, the train is already leaving the station. Early to mid-stage adopters are recognising the consumer interest in this information. Ninety-three percent of people expect sustainable financial services to become the norm, with many anticipating this will be the case by 2025. Consumers are willing to pay a 9.7% sustainability premium and half of those surveyed by PwC in 2024 said they are making more sustainable buying decisions.
Banks that leverage this increasing interest in both sustainable finance data and changing purchasing behaviour take an innovative angle on customer satisfaction. Here are some ways you, too, can achieve a good NPS score by using carbon emissions data:
1) Bring Carbon Emissions Data Directly to the Customer
We are at the frontier of using transaction data to calculate carbon emissions. At Connect Earth, we enable FSIs to surface CO2 estimates for customer (retail and business) spend for all or a select segment of your customers. Using our verified carbon intelligence infrastructure and easy-to-integrate API technology, this is all embedded directly within your banking app and other platforms.
Embedding carbon footprint data aligns with customer values and helps people and businesses make more sustainable choices. It also aligns with where customers are interacting with banks, ensuring greater coverage and bigger potential impact on your NPS score. U.S. Bank CEO puts it plainly: “Our average customer visits a branch ten times a year. But they visit our digital platforms about 3,000 times a year.”
2) Support Business Customers to Meet Supply Chain Pressures
From 2025, the EU’s CSRD will require certain companies to report on sustainability, similar to the UK’s SECR. While targeting larger firms, these regulations, and others coming into play across the globe, indirectly affect SMEs as they are often part of larger companies’ Scope 3 emissions through the supply chain. Companies are increasingly seeking suppliers who can provide accurate carbon footprint data and demonstrate efforts to reduce environmental impact. Beyond this, you can expect regulations will tighten over time to include smaller firms directly.
For banks with business account customers, accurate carbon emissions reporting could be a real differentiator helping them solve this exact problem.
It is especially important that this kind of reporting is compliant with regulatory requirements, both in terms of its accuracy and completeness, but also formatting. Get this right and you can be sure business customers will rate their experience highly.
3) Provide Recommendations to Help People Be More Sustainable
Retail and business customers look to their bank to provide information to make more informed financial decisions, not just the contents of their accounts. Visa found that 99% of millennials have some interest in sustainable investing (up from 15% on the previous year), but need more information before committing, to illustrate this point.
The expectation that a bank be a source of insight extends to carbon emissions data. You can further support customer decision-making by integrating recommendations and actions to help them make more sustainable choices around energy use, diet or choice of transport.
4) Raise Awareness With Messaging and Staff Training
“We have found Net Promoter Scores have increased significantly where customers are engaging with bankers who are knowledgeable about green finance.”
— Dr Giles Cuthbert, Managing Director at the Chartered Banking Institute
We highly recommend, when bringing carbon emissions data into view for customers, putting this new feature in context. You can do so via an awareness campaign, aimed both internally and at the public.
Internally, that might look like training sessions around sustainable finance, the reliability of spend-based estimates, and how carbon emissions data integrates with the bank’s ESG goals and wider green financing opportunities.
Externally, put some resource towards marketing campaigns, FAQs and a knowledge-base centred on educating customers on sustainability. Here, you are positioning carbon emissions data as an enhancement to customer experience as well as a tangible representation of your FSI’s green commitments.
Take the Green Route to Customer Retention
When you measure and report on the carbon footprint of transactions, it’s clear you’re providing a big differentiator for a growing audience of planet-conscious customers.
So where should this feature sit in your roadmap?
New features have the greatest impact on NPS when they are implemented at a point in time when they are viewed as innovative, useful and different.
If you really want to achieve world-class NPS scores, then now is the time to integrate carbon emissions data into your customer satisfaction strategy.
