Ainsley Ward

Vice-President, Payments Consulting Services

As an industry, we’re well aware that our essential activities have an environmental impact, and a majority of banks want to reduce that. In fact, according to our latest CGI Voice of our Clients data, 55 percent of our corporate and transaction banking clients view sustainability as core priority in creating future value. However, many banking executives don’t know where to start. There is a tendency to pursue low-hanging fruit when striving for payments sustainability by, for example, replacing plastic cards with wood or metal cards.

But, is there more to payments sustainability than this? Can a bank truly move the needle on sustainability in payments infrastructure? The answer, of course, is yes. So, how and when should banks pursue net-zero payments? 

As the banking industry evolves, technical teams that support financial institutions are being asked to do more. Though timelines and priorities may vary, chief technology officers in banking have a strikingly similar laundry list of tasks to accomplish:

  1. Make sure that the bank complies with ISO 20022 deadlines.

  2. Enable money to move faster, more securely and to more people than ever before.

  3. Revamp bank operations to cope with more change and with fewer resources.  

  4. Meet a host of other regulatory deadlines that impact the ability to do business.

Added to this imposing list of deliverables is the expectation to achieve net-zero emissions by 2050—a goal set forth by the United Nations that has fueled the collective agendas of governments and businesses alike.

The European Union, the UK, Canada and the U.S., for example, are part of the 70 countries that make up the United Nation’s Net-Zero Coalition. As part of this initiative, thousands of municipalities, educational institutions and companies—including more than 400 financial institutions—have made a commitment to achieve net-zero carbon emissions by 2050.

While many financial institutions have published an environmental, social and governance (ESG) strategy, many are now asking how a bank can genuinely reduce its negative impact on the environment and contribute to sustainability efforts, including within the payments area.

Why act now?

Twenty-seven years is quite a lead time, but if we’ve learned anything from payments modernization, it’s that big changes are not made overnight. The EMV cryptography and ISO 20022 financial messaging standards, for example, were both initially introduced roughly 20 years before we began to see widespread adoption. Even more importantly, there are logistical, financial and reputational incentives for getting a head start.

Strategic importance of payments modernization and sustainability

The combined impact of ISO 20022 with the adoption of real-time payments and request-to-pay is pressuring financial institutions to overhaul their legacy payments processing. If they handle their climate commitments apart from this core digital transformation, they’ll miss a tremendous opportunity to align these two strategic undertakings.

Choices about how to integrate legacy infrastructure will impact how financial institutions deliver payment services to their customers in the future. As they make these choices, decision-makers have an opportunity to not only digitally transform, but also make headway on their ESG commitments at the same time.

CGI Voice of Our Clients data shows that more than 96% of banks believe that legacy core infrastructure is hampering their digital transformation, and more than 58% are working toward sustainability targets. The importance of each is clear, while the benefits of handling each concurrently versus consecutively also are significant.

Fiscal benefits

Capital investment in payments modernization is an opportunity to create a lasting reduction in operational expenditure. For example, CGI is currently helping a North American bank achieve at least $3.5 million in annual savings by implementing CGI All Payments via a cloud delivery model. These savings are possible through reduced staffing and reduced power consumption as a result of increased operational efficiency and upgraded legacy hardware and infrastructure.

ESG benefits

If you need more convincing, consider this; your clients, particularly the emerging Gen Z client base, are purchasing electric vehicles, installing solar panels on their rooftops, and pushing for greater sustainability in food and service retailing. They feel a sense of responsibility to help create a more sustainable future. Aligning with their efforts will resonate with them—especially as brands are increasingly graded on their ESG values and performance.

Because climate commitments are a high priority for many clients, beginning the journey toward net-zero today will help banks attract and retain business in 2023 and beyond.

Including net-zero strategies in your payment modernization plan

To best align your ESG and payments modernization efforts, we recommend that you examine three key issues that impede ESG goals: high levels of power consumption, inefficient processes and the unnecessary movement of people. Our new white paper, Net-Zero Payments: Reaping the Environmental and Financial Benefits of Payments Modernization, covers these issues in depth and provides insight on and recommended actions for integrating net-zero payments with payments modernization.

We invite you to read the paper and reach out to us for a conversation. If you have questions about how to meet ESG goals while delivering the future of payments to your customers, please contact me.

About this author


Ainsley Ward

Vice-President, Payments Consulting Services

With more than 20 years of international banking and payments experience, Ainsley Ward is a recognized industry thought leader who oversees business development for CGI's payment solutions. Previously, he worked on modernization and open banking initiatives in Canada and served as a banking subject matter ...