Digital banking and environmental impact: How Fintech supports carbon footprint reduction

Abstract

This study explores the impact of adoption of digital banking, digital payment volume, and customer awareness of green banking features on environmental sustainability, focusing on carbon footprint reduction in Asia. The findings indicate that digital banking is crucial in minimizing paper usage and reducing energy consumption, significantly lowering the carbon emissions associated with traditional banking operations. The research employs Structural Equation Modeling (SEM) to analyze data from 520 respondents, providing a comprehensive view of the direct and indirect relationships between digital banking practices and environmental outcomes. The results demonstrate that increased digital payment volume, combined with higher customer awareness of sustainability, reduces the reliance on paper-based banking and helps achieve broader environmental goals. The study highlights the mediating role of paper usage in lowering carbon footprints and underscores the importance of digital transformation and customer education in driving sustainable banking practices. This research contributes valuable insights for policymakers and financial institutions aiming to integrate fintech with sustainability initiatives.