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Economy

It’s time to believe in banking again

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Sean Buchan is actively switching his banking choices. Whilst doing this, he reflects on why such a simple action faces so much resistance and inertia across the general public. He concludes that in the end, it is mostly due to ourselves.

When you hear the word ‘banking’ what is the first thing you think of? A vault where you store your money? Sky high yet undeserved bonuses to top executives? How about… an opportunity to do a good thing with relatively little effort?

Experience tells us that almost nobody thinks the latter, at least not immediately. That’s a shame, seeing as where you store your money might be the most powerful decision you can make.

The situation might have been grim before 2008, but ever since that, implicit distrust was transformed into an explicit shunning of all things money-related. Economics has drifted further into the realm of pseudo-science that nobody understands. Meanwhile, bankers and all those associated are not to be trusted.

Click here to read The Guide to Sustainable Banking 2013

It’s easy to see why people would think that. Even the IMF said 2008 was the biggest financial crash since Wall Street, and recently, unemployment levels in the UK hit their highest levels in nearly two decades. At the same time it appeared that those that were largely responsible, with the exception of a few high profile names, got away unscathed.

But that’s not the whole story of banking. The upcoming National Ethical Investment Week urges us all to cast our eyes away from headline grabbers – for unfortunately bad news still forms the majority – and consider an ever-growing fringe of banking in the hope that it will not be considered fringe any longer. This is the phenomenon of banking sustainably.

The delights of modern technology allows a plethora of information on ethical and sustainable banking options to arrive at our fingertips with very little research. Thanks to increasingly easy-to-use platforms such as Ethex and the Social Stock Exchange, as well as in-depth tools such as the Move Your Money scorecard, one can go from belligerent naysayer to having even a little shred of hope in under an hour.

Next, a few hours of more of detailed research, or perhaps consultation from an adviser, and finally, make the switch completely online or over the phone. It’s possible to have one’s banking life transformed with relatively little effort. That’s current account, savings and investment funds alike, with all that money doing good.

So what causes us to be so sceptical and inert in the first place? Well, it is true that mainstream information out there has been lacking. I personally went through an entire undergraduate degree in economics, including a placement in industry, without hearing the phrases ‘sustainable banking’ or ‘ethical banking’ even once.

Seeing as that’s a money-heavy profession it is a little hard to imagine the prominence of these concepts elsewhere. In recent times it seems, just as with I, one needs to search for it. This needs to change.

Fortunately press such as Blue & Green Tomorrow and bodies such as the UK Sustainable Investment and Finance Association (UKSIF), which is running National Ethical Investment Week, seek to make that change.

However, aside from a lack of mainstream prominence, our scepticism and inertia is mostly due to ourselves. Consider the self-fulfilling prophecy. If a gentleman approaches us in the high street and offers us an ethical banking option, our immediate thought is to probably think of him as a phony.

Firstly he is selling something, which involves making money; the very thing that is evil. Secondly he’s selling banking, which involves money; the very thing that is evil. This cannot be ethical or sustainable in any way.

In reality we haven’t given the man a chance. We haven’t considered that there is an opportunity to do good with our money. Realistically, every moment is an opportunity to do something good.

Guns don’t kill people; people do. Television isn’t trash; it depends what channel you watch. Money is not evil; it is what you do with it. There is no need to distrust something or somebody just because of a general association.

Anybody still reading this article is likely already converted or close to it. Thus this is more a call to everybody to realise how much this current status quo affects the position of sustainable banking today and actively challenge it whenever we hear or see it. In the end, it is we, and only we – the discerning members of the general public – that decide whether something is fringe or whether something is mainstream.

Wouldn’t it be great to see sustainable banking as the standard option? Don’t you think it’s time to believe in banking again?

Sean Buchan is a freelance writer specialising in the areas of economics, philosophy, principles and ethics. A principled person himself, he is the founder of www.TrueEfficiency.net and makes a point of only investing his time into projects he truly believes in. You can also follow him at @TrueEfficiency and www.facebook.com/TrueEfficiency.

Further reading:

An analyst’s view on changing banking culture from within

One responsible banking system to rule them all

Big five’s banking monopoly at risk, with 2.4m closing accounts in 2012

Small is beautiful: why alternative banks need to step up to the mark

The Guide to Sustainable Banking 2013

Economy

Report: Green, Ethical and Socially Responsible Finance

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“The level of influence that ethical considerations have over consumer selection of financial services products and services is minimal, however, this is beginning to change. Younger consumers are more willing to pay extra for products provided by socially responsible companies.” Jessica Morley, Mintel’s Financial Services Analyst.

Consumer awareness of the impact consumerism has on society and the planet is increasing. In addition, the link between doing good and feeling good has never been clearer. Just 19% of people claim to not participate in any socially responsible activities.

As a result, the level of attention that people pay to the green and ethical claims made by products and providers is also increasing, meaning that such considerations play a greater role in the purchasing decision making process.

However, this is less true in the context of financial services, where people are much more concerned about the performance of a product rather than green and ethical factors. This is not to say, however, that they are not interested in the behaviour of financial service providers or in gaining more information about how firms behave responsibly.

This report focuses on why these consumer attitudes towards financial services providers exist and how they are changing. This includes examination of the wider economy and the current structure of the financial services sector.

Mintel’s exclusive consumer research looks at consumer participation in socially responsible activities, trust in the behaviour of financial services companies and attitudes towards green, ethical and socially responsible financial services products and providers. The report also considers consumer attitudes towards the social responsibilities of financial services firms and the green, ethical and socially responsible nature of new entrants.

There are some elements missing from this report, such as conducting socially responsible finance with OTC trading. We will cover these other topics in more detail in the future. You can research about Ameritrade if you want to know more ..

By this report today: call: 0203 416 4502 | email: iainooson[at]mintel.com

Report contents:

OVERVIEW
What you need to know
Report definition
EXECUTIVE SUMMARY
The market
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
The consumer
For financial products, performance is more important than principle
Competition from technology companies
Financial services firms perceived to be some of the least socially responsible
Repaying the social debt
Consumer trust is built on evidence
What we think
ISSUES AND INSIGHTS
Creating a more inclusive economy
The facts
The implications
Payments innovation helps fundraising go digital
The facts
The implications
The social debt of the financial crisis
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
PUTTING FINANCIAL SERVICES IN AN ETHICAL CONTEXT
An ethical economy
An ethical financial sector
Ethical financial services providers
GREEN, ETHICAL AND SOCIALLY RESPONSIBLE ISSUES IN FINANCIAL SERVICES
The role of investing
Divestment
The change potential of pensions
The role of trust
Greater transparency informs decisions
Learning from past mistakes
The role of innovation
Payments innovation: Improving financial inclusion
Competition from new entrants
The power of new money
The role of the consumer
Consumers empowered to make a change
Aligning products with self
THE CONSUMER – WHAT YOU NEED TO KNOW
For financial products, performance is more important than ethics
Financial services firms perceived to be some of the least socially responsible
Competition from technology companies
Repaying the social debt
Consumer trust is built on evidence
Overall trust levels are high
THE ETHICAL CONSUMER – SOCIALLY RESPONSIBLE ACTIVITIES
Payments innovation can boost charitable donations
Consumer engagement in socially responsible activities is high
Healthier finances make it easier to go green
SOCIALLY RESPONSIBLE COMPANIES
37% unable to identify socially responsible companies
Building societies seen to be more responsible than banks….
….whilst short-term loan companies are at the bottom of the pile
CONSUMER TRUST IN THE BEHAVIOUR OF FINANCIAL SERVICES COMPANIES
Overall trust levels are high
Tax avoidance remains a major concern
The divestment movement
Nationwide significantly more trusted
Trust levels remain high
CONSUMER ATTITUDES TOWARDS GREEN AND ETHICAL FINANCIAL PRODUCTS
For financial products, performance is more important than principle
Socially conscious consumers are more concerned
CONSUMER ATTITUDES TOWARDS TRANSPARENCY
Strategy reports provide little insight for consumers
Lack of clarity regarding corporate culture causes concern
Consumers want more information
THE ROLE OF FINANCIAL SERVICES FIRMS IN SOCIETY
The social debt of the financial crisis
THE SOCIAL RESPONSIBILITIES OF FINANCIAL SERVICES FIRMS
For consumers, financial services firms play larger economic role
Promoting financial responsibility
CHALLENGER COMPANIES AND SOCIAL RESPONSIBILITY
Consumer trust is built on evidence
The alternative opportunity
The target customer

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Economy

A Good Look At How Homes Will Become More Energy Efficient Soon

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energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.

1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.

3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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