• Mobiquity’s report reveals ESG challenges and shortfalls of Australian banks
  • The report provides a state-of-play on ESG in the Australian banking industry
  • Stockhead reached out to Mobiquity’s APAC head, Gus Quiroga

A recent report shows that cultural shifts, regulatory compliances, and sustainability are the top three challenges keeping Australian bank board members awake at night.

The report, conducted by digital transformation company Mobiquity, provided a state-of-play on ESG in the Australian banking industry, with comparisons to their counterparts in the UK, US and the Netherlands.

Mobiquity conducted a survey of 602 C-suite banking executives, which showed the level of concern for Australian banks is in fact comparable to those other countries.

The top ESG concern for Australian bank boards is “cultural shift in banking behaviours”, with 47% of executives saying it was a major issue for the board.

This shift reflects the changing demographics of Australian society.

“Digital initiatives allow banks to be able to accelerate time to value by developing new services and products that address the needs of small, yet important groups in our community,” said Mobiquity’s APAC general manager, Gus Quiroga.

Earlier this year, Mobiquity delivered an Islamic bank prototype (“Murabaha”), with an online car finance company to support the growing Islamic community.

Developed in a mere six weeks, the prototype enables any financial institution to enhance their offering with Shariah-compliant services through a technology stack that essentially plugs into the bank’s infrastructure.

“Projects such as this are proof that it is possible to meet the needs of smaller communities within Australian society,” Quiroga told Stockhead.

Mobiquity’s APAC General Manager, Gus Quiroga.

“The tipping point lies in the mindset of banking executives who need to broaden their thinking about what digital access means to their customers.”

Quiroga explained that it is no longer just about mobile and the web, digital has grown up and we’re seeing new channels such as the metaverse emerge.

“Banks need to look at ways to leverage and engage with customers using these platforms.

“This means not only addressing customer needs — such as translation services — but also ensuring that their services and products are present on platforms where these groups in our society reside to create truly frictionless experiences.”

What Australian banks are most concerned about

Mobiquity’s study also found several other concerns for Australian bank boards when it comes to sustainability, including:

  • The lack of universally recognised regulation and enforcement (31%)
  • Mitigating climate risks by assessing portfolios (31%)
  • Embracing emerging technologies to make digital services available remotely (30%)
  • Key sustainability initiatives including remote working (55%), digital solutions (48%) and investment in carbon credits (45%)


Top concerns at board level for banks.

Source: Mobiquity

What seems to be disappointing was that only around 50% of Australian banks are measuring sustainability as part of ESG targets.

This falls short of US counterparts where two-thirds (67%) admit to measuring sustainability as part of ESG targets.

It was also disheartening to see that only a third of Australian banks were willing to assess their portfolios as part of mitigating climate risks.

Quiroga explained that as a nation built on oil and gas, there are some industries in Australia that still rely on fossil fuels, and are lagging in the adoption of their own sustainability programs.

“However, it would be counterproductive to immediately restrict access to their funds as it could bring the economy to a halt, risk alienating shareholders and deprive the business in question of the funds they need for that transformation in the first place,” he said.

“Further, without sophisticated measurement tools, it’s still very unclear on what each company’s carbon footprint actually is.”

Quiroga says this makes it difficult for banks to discern investments, as they cannot accurately validate the carbon impact of an organisation and subsequent investment grade.

“This is something that will require addressing in the coming years as there’s only so much businesses can invest into carbon offset programs,” he added.

Quiroga also told Stockhead that in a vast geographical landscape such as Australia, we’re seeing many members of society miss out on access to services — such as banking — due to their geographic location.

“In this regard, digital initiatives help mitigate barriers to accessibility through the ability to scale services to all corners of the country, providing options to inclusive platforms that Australians can access banking services through,” he said.

However, Mobiquity’s research shows only one in three (30%) of banking executives agree that embracing emerging technologies to make digital services available remotely is a key priority.

“So, while it’s good to see this need recognised by some Australian banks, there’s certainly more that can be done,” Quiroga said.

How Aussie banks compare to overseas banks

Meanwhile, bank executives in the US, UK and the Netherlands gave responses around the same themes of efficiency and profitability, long-term investment, as well as customer loyalty and brand reputation.

Banks across those four countries cited lack of universally recognised regulation and enforcement as one of the main barriers to ESG adoption.

This seems to suggest that banks are not entirely persuaded, and wish for a regulatory level-playing field to ensure they are not competitively disadvantaged in adopting sustainability practices.

The US and UK banks in particular named lack of ESG talent and cohesive ESG strategy as the hurdles to successfully implementing a successful sustainability program.

For US banks, the top three sustainable initiatives were remote working, digital solutions, and digital processes (reduce and eliminate paper).

Australia, the UK and the Netherlands responded similarly, with addition of investment in carbon credits in the top three initiatives.

Some experts believe that carbon credit remains a problematic way to achieve net-zero carbon commitment, with many dubbing the practice as greenwashing.

Overall, Quiroga believes that Australian banks are keeping up with their counterparts in the developed worlds, and in some respects, we’re even ahead when it comes to sustainable banking priorities.

“For example, our report highlights that 94 per cent of Australian banks have a sustainability representative at a board level, which puts Australia ahead of the United Kingdom and Netherlands.

“As the pace of innovation increases, more can be done to create better sustainable outcomes across the industry globally, and our report confirms Australian banks are relying on digital solutions to do so.”