The Concept of Sustainability and Innovation in Banking

Abstract

The paper seeks to understand and analyse the concept of sustainability and innovation in banking. It is obvious that as financial service institutions, banks have business relationships and investment that cut across all sectors of the economy. It is, therefore expedient for banks to incorporate sustainability principles as contained in Brundtland report 1987 both in their short and long-term business models. In fact, the drive for sustainable banking will depend on a conducive, healthy and prosperous socio-economic environment. This way sustainable innovative banking services will be tailored to meet the needs of today and future stakeholders, as well as environmental and social risks. Hence, banks are challenged to integrate the science of sustainability and sustainable development objectives in their business operations and services innovation, for the preservation of environment and sustaining the unity of nature for future generations. Thus, sustainable bank services innovation focus on strategies and business models that incorporates multitude of innovative financial services, e. g. digital finance, through robust financial technology and finance-related software ‘fintech’ companies and innovative financial service providers. To this end, the paper will conceptually analyse sustainability objectives and how it is entrenched in banking services innovation, credit and loan administrations, product offerings and general banking operations.