Could banks ‘nudge’ customers to make more sustainable financial decisions?

Banking is no longer only about balance sheets and compliance. A new question hangs over the sector: what kind of future are you financing? Increasingly, the answer is framed through sustainability — not as a marketing slogan, but as a core strategic principle that cuts across credit, investment and client engagement.

The shift is not just about green products. It is about influence. Banks hold a unique position in the economy: they sit at the crossroads of money, data and decision-making. With that vantage point comes the ability — and some would argue the responsibility — to steer behaviour. Subtle nudges, embedded in everyday banking, are becoming the means by which financial institutions turn climate ambition into action.

The logic is straightforward. Shifting customers from “brown” to “light green” assets delivers the greatest environmental impact, while protecting long-term collateral value and reducing credit risk. Preferential rates for energy renovations or sustainability-linked loans are no longer fringe; they are becoming standard. Lending criteria, once purely financial, are increasingly moral as well. A green mortgage is not just cheaper finance — it is a signal of what the bank believes the future should look like.

Technology and influence

Technology has accelerated this transition. Digital tools can place sustainability insights directly into the palm of a customer’s hand. Spending dashboards that reveal carbon footprints, AI assistants that anticipate when a boiler should be replaced, gamified apps that reward low-carbon choices — these are not gimmicks. They are the subtle nudges that weave climate consciousness into the fabric of financial life. Yet they also pose a dilemma: how far can a bank go before a nudge becomes a shove?

The urgency of the climate crisis argues for stronger interventions; the demand for trust and autonomy requires restraint. Successful institutions will find the balance, embedding sustainability seamlessly without eroding client choice. The art lies in persuasion, not prescription.

Lessons from the pioneers

Some banks are already showing how this balance can be struck. ING, working with climate-tech partner Cogo, has embedded Footprint Insight into its mobile app. Customers can see the emissions tied to their spending, benchmark themselves against national averages, and receive personalised tips for improvement. The feature is not bolted on — it appears next to routine spending categories, making climate data as familiar as a monthly grocery bill.

ABN AMRO has chosen housing as its arena for nudging. Its Energy Savings Check translates a home’s energy label into a menu of possible upgrades, complete with costs, payback times and available subsidies. Pair this with sustainable mortgages, and the once daunting task of retrofitting becomes manageable, even attractive.

Belgium’s KBC has gone a step further. Its digital assistant Kate does not wait for customers to ask; it prompts them. Poor energy ratings are flagged, financing options are surfaced, and nudges towards greener behaviour appear in natural conversation with the bank’s AI.

Rabobank, true to its roots, applies similar thinking to agriculture. Farmers can track their emissions in real time, adjust practices accordingly, and secure preferential financing to support the transition.

Not every nudge comes from an algorithm. Cooperative banks are betting on education and inclusion. They are keeping branches open in rural areas, teaching financial literacy, and tailoring mortgages to the least efficient homes. For them, the transition is not just about climate—it is about fairness. Sustainability cannot be the preserve of the privileged; it must be accessible to all.

The future of nudging

For the industry as a whole, the direction is clear. Banks are expanding ESG-linked products at pace, and global institutions are projecting billions in revenues tied to climate services. Nudging is at the heart of this evolution. It reduces friction, makes the sustainable choice visible, and aligns financial security with environmental impact.

Done well, nudges build trust, deepen relationships and accelerate the shift to a low-carbon economy. Done poorly, they risk fatigue, exclusion or greenwash.

The sector’s future licence to operate is fast becoming a licence to lead. And leadership will not be measured by glossy brochures but by the quiet, everyday prompts that shift real behaviour — one decision, one transaction, one nudge at a time.