In the spirit of World Environment Month, Capitec’s Manager of Operational Resilience and ESG Oversight, Adrien Kotzé, highlights the opportunities for banking clients to contribute to a greener future by utilizing technology-driven banking solutions.
Here’s how banking technology enables South Africans to address environmental challenges:
Going Digital
The adoption of technology in the banking sector offers numerous ways for South Africans to address environmental challenges. One significant benefit is the shift toward digital payments, which require minimal resources and have a lower environmental impact compared to traditional payment methods like cash withdrawals.
Digital payments contribute to reduced resource consumption by eliminating the need for physical cash and coins, which saves natural resources such as trees, water, and metals. Additionally, digital payments generate less waste since there is no need to dispose of cash or cards.
Furthermore, the manufacturing and transportation of cash and cards contribute to air pollution, while digital payments eliminate the need for these processes, thereby reducing carbon emissions.
The ecological benefits of digital payments are countless, including:
Reduced resource consumption: Digital payments do not require the production of cash, or coins. This saves natural resources like trees, water, and metals.
Less waste: Cash and cards require disposal once they are retired, canceled, or removed from circulation, adding to landfills. Digital payments don’t.
Lower air pollution: Cash and cards must be printed or manufactured, then transported to banks or consumers. Digital payments do not require manufacturing and transportation from point to point, helping reduce carbon emissions.
Capitec has been proactive in promoting digital transactions to provide convenience for clients and contribute to environmentally friendly payments. Initiatives such as Google Pay and Apple Pay digital wallets enable contactless and cardless payments in-store or online.
The introduction of a digital “Pay bills” functionality allows seamless payments to registered Pay@ and EasyPay billers. These digital transaction channels significantly reduce the need for printing money, leading to energy savings and a reduced environmental impact.
Adopting Paperless Banking
Reducing paper in banking operations lowers carbon emissions and creates a significant environmental impact. Kotzé emphasizes that an average tree can only produce about 17 reams of paper and takes around 100 years to grow. Producing those 17 reams from one tree releases approximately 49kg of CO2 into the atmosphere. In contrast, if left alone, the average tree would absorb around 907kg of CO2 in its lifetime. Capitec promotes paperless banking by removing physical documents through an initiative launched in 2020.
Remote Onboarding
Digital advancements also enable remote onboarding, revolutionizing the process of opening client banking accounts. Clients can now open accounts remotely using their smartphones, eliminating the need for the traditional manual, paper-driven process.
By 2025, research predicts that digital onboarding will facilitate the opening of nearly 330 million new bank accounts, surpassing the 184 million accounts opened in 2020. Client remote onboarding offers sustainability benefits, including the convenience of opening an account without visiting a physical branch or completing physical paper documents.
Capitec implemented remote onboarding in 2021, resulting in 385,052 clients being onboarded digitally. This approach reduces travel-related carbon emissions and underscores the bank’s commitment to digital transformation and environmental sustainability.
Kotzé concludes by highlighting the significant role of technology in promoting environmental sustainability in the banking sector. “As we move towards the future, it’s clear that technology has a significant role in promoting environmental sustainability in the banking sector.
It’s not just about reducing the environmental footprint, but also improving operational efficiencies and supporting the transition to a lower-carbon economy. Banks, therefore, can help clients leverage technology responsibly to contribute meaningfully to ensure a sustainable existence for present and future generations to come.”