First International Conference on Economics and Banking (ICEB-15)

Innovation Green Banking in Banking Service

(Electronic Banking)
Resi Juariah Susanto
STIE EKUITAS, Jalan PHH Mustofa No. 31 Bandung, Indonesia

resi.juariah@ekuitas.ac.id

Abstract-The concern about environment is now even place where it is good consumer homes, offices and even on
more intensive than some time before. This concern comes the road though
from various organizations, one of them is from the bank
bringing the idea of Green Banking. Green banking is an In green banking can be explained again about green
environmentally friendly bank activity by considering three marketing green marketing which can save in terms of
aspects: 3Ps (profit, planet and people).There are two points of
advertising spending due to the use of green marketing in
view in defining Green Banking. First, Green banking is in the
implementation of credit or financing intended for use today is in terms of informative websites are also
entrepreneurs who are friendly to the environment. This is usually the main page or the so-called home usually
generally given to the SMEs as well as to agricultural and includes advertising or promotion that is being took place at
plantation sector. Second, there is also a thought that Green that time or in that period.
Banking is the bank using environmentally friendly tools in its
banking activities. Meanwhile, here in green financing bank made a
self-defense in the operations so that the ability of banks to
This paper is aimed at analyzing the relationship pay the risks safer and more secure long-term debt in the
between the electronic banking as operational support and the sense of not bankrupt. Green operations where operational
improvement of customer service. The bank can also facilitate
green taken here is in terms of innovation. Innovation is
and be more environmentally friendly for example by
reducing paper in each transaction or using recycled often used today is from the corner in the form of electronic
materials. Thus, this increases the bank’s service quality banking ATMs, internet banking and mobile banking. The
perceived by the customer. products here savings in terms of money and activities.
Electronic banking products to make savings in terms of
This is a qualitative research using descriptive method reduction of the deposit slip (paper), the reduction of fuel
and the analysis is based on the study of literature. The results emissions (the consumer does not need to come to the bank
of this research paper are intended for the banks who want to using the vehicle), do not need such a long queue at the
implement or have implemented Green Banking, for which the teller, can do a lot of transactions in one activity (toll
knowledge of this Green Banking is believed to increase
payments, telephone, electricity, etc.), in terms of the price
service quality.
of both banks and consumers do not need to spend a lot of
Key note: Green Banking, Innovation, Banking Service money for the operations of the bank's activities.

Green banking activity is highly influential on the

environment make the air cleaner vehicles effect of
A. Introduction customers who will go to the bank also reduces paper waste
and reduction of logging for kertas.keuntungan received by
Currently green banking is an issue that is being the people is to reduce the activities go to the bank just to
discussed in a crowded banking world from the viewpoint transact.
of various aspects of green banking. The aspects of green
banking can be a green marketing, green financing, green
operations and so on. Green banking itself is something B. Literature Review
pertaining to the 3p ie people, planet and profit where their
Definition of green banking is also diverse,
savings and also be environmentally friendly activities.
including green banking assume that similar to the ethical
Green banking activities in its own banking operations in
bank, where the bank has a social responsibility to the
terms usually change of habits of use of materials of paper
environment (Marzio, 2007). Actually, term green banking
to electronic transactions. Electronic transactions contained
has a broader scope than just green, which is associated
in banks in general, ie transactions at ATM machines,
with the development environment. However, the term also
mobile banking and internet banking. Aside from saving
cover community development towards a better social life.
paper material also saves fuel by mean when in the earlier
The basic principle of green banking is an effort to
period consumers abuzz with the bank approached the
strengthen the bank's risk management capabilities,
vehicle but today consumers can transact at home or in a
especially related to the environment and to encourage

© 2015. The authors - Published by Atlantis Press 169

banks to increase financing portfolio of environmental protect the environment and are controlled by the same
friendly such as renewable energy, energy efficiency, authorities. Green banking, compared to normal banking,
organic agriculture, eco-tourism, environmentally friendly attaches more importance to environmental factors. Its aim
transportation, and various eco-label products. (Yuniarti, is to provide good environmental and social business
2013) practices. It checks all the factors before considering a loan
whether the project is environment-friendly and has any
Green marketing is used to expres a responsible implictions on the future of people and planet. One would
corporate marketing activity which regards environmental be awarded a loan only when all environmental safety
issues as the opportunities for further developing and standards are followed. Basically, green banking avoids as
growing, and validates them in all operation areas. In other mch as paper work as possible- from go-green credit cards
words, green marketing consistsof all activities designed to and go-green mortageges to all transactions done online. It
generate and facilitate any exchanges intended to satisfy creates awarness around business people about
human needs or wants, while integrating all short- and environmental and social responsibility, enabling them to
long-term, direct and indirect environmental implications of adopt environment friendly business practices, and follows
these exchanges, and minimishing the negative environmental standards for lending. When a person is
enviromental implications of these exchanges (Polonsky awarned a loan, the interest is less thn normal banks
2000). because ethical banks give more importance to
environment-friendly factors – they do not operate with
Green banking is becoming a long-term business high interest rates only. Over all, green banking is a good
strategy, which in addition to the pursuit of profit is also way of making people aware of global warming. Each
building sustainability in nature and society. From here, it businessman will contrbute to the environment and make
can be explained that green banking is marketing in the this earth a better place to live and enjoy. (Rashid, 2015)
banking sphere. Marketing is based on the values and the
human spirit and not just the pursuit of profit, but also care By implementing this policy banks intend to
for people and the planet. (Yuniarti, 2013) accomplish certain definite objectives which are: (1)
Increase goodwill or improve brand image by showing their
The principle of sustainable development should commitment to save and protect the environment; (2)
ensure that the balance between economic development, reduce giving loans to certain environmentally harmfull
social life, and environmental preservation (profit, people, projects; (3) check the necessary environmental due
planet). In this context of financial institutions became one diligence factors before lending a loan/investment; (4)
of the important pillars in the mainstream of sustainable make efficient and effective use of resources and channel
development, so as to contribute actively to the protection financing in an anvironment friendly manner; (5)
and management of the environment. Green banking policy introducing new technology in banking perations that
will be poured into bank regulation that will ensure the would not only benefit our customers but also increase the
bank as a financial institution to consider the principles of productivity of our employees; (6) reduce carbon foot print
sustainable development and improve the ability to manage in all branches and head offices of all bank; and (7) create
credit risk impact on the environment. (Yuniarti, 2013) awarness amongst the stakeholders about environmental
and social responsibility enabling them to adopt
In a word we can say that green banking refers to the environmental friendly business practices. (proquest report,
attempt of the banking sector to consider social, ecological 2015)
and environmental factors with an aim to protect the
environment and conserve natural resources. The banking Green Economy is one whose growth in income and
sector plays a major role in fnancing investment for employment is driven by public and private investments
commercial projects, which is one of the most important that reduce carbon emissions and pollution, enhance and
economic activities for economic growth. Hence, by taking resource effiency, and prevent the loss of biodiversity and
various measures to save the environment the banking ecosystem services. These investments need to be catalysed
sector can play a crucial role in promoting enviromentally and supported by targeted public expenditure, policy
sustainable and socially responsible investment. As such, reforms and regulation changes. This is why green banking
Green Banking is also known as Ethical Banking and initiatives by all banks are a moral obligation to save the
Sustainable Banking. The purpose of green banking people. And the time has come for all lenders to “go green”
initiatives taken by the central bank is to ascertain required and “think green” by setting their mindset taking remakable
measures to save the environment and reduce pollution footsteps thrugh successful green banking initiatives.
while serving or financing our customers and improve in- (proquest report, 2015)
house environment management through efficient and
effective use of resources in all the branches and head C. Research Method
offices of the banks. (proquest report, 2015)
Green banking in banking service include many
Green banking, which considers all the social and aspect and we can see how the green banking making great
environmental factors, is also called “ethical banking”. service to consumer and making great innovation. This
Ethical banks started with the aim of protecting the
environment. These banks are like normal banks that aim to

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research is a qualitative and descriptive research using The adoption of green banking strategies will help
literature study as the method of analisis. the bank to deal with these risks involved in their business
operation. To manage environmental risk, the banks have to
D. Result and Discussion design proper environmental management systems to
evaluate the risks involved in the investment projects. The
Green benefits of online banking by vilano risks can be internaized by introducing differential interest
(2011:38) it should come as no surprise that the financial rates and other techniques. Moreover, bank can withdraw it
industry represents a significant percentage of paper use self from financing high-risk projects. The second
worldwide. But according to PayItGreen, a consortium of component of green banking entails creating financial
financial companies designed to promote electronic products and services that support commercial development
banking, the numbers are downright staggering. In one with environmental benefits. These includes investment in
year, by switching from paper to electronic billing, renewable energy projects, biodiversity conservation,
statements and payments, the average American household energy efficiency, investment in cleaner production process
would save 6,6 pounds of paper, eliminate 171 pounds of and technologies, bonds and mutual funds meant for
paper of greenhouse gas emissions, avoid the release of 63 environmental investment etc. (sahoo and nayak, 2008)
gallons of wastewater into the environment and forgo the
need for 4,5 gallons of gasoline to mail paper items. In Chadical and Misra (2015) a bank is a financial
institution engaged in so many financial transactions and
The main goal of green marketing is to transform activities through its website, like monitory transactions,
enviromental benefits to competitive advantages through manage banking campaigns, helping an enterprise to
the creation and selling of new, greener products and identify and target their best customers, formation of
services. Green marketing also helps corporations to find individualized relationships with customers, customers
new ways and methods for satisfying existing market satisfaction and maximizing profils etc. Website of the
necessities or generating them, to achieve leader position in banks is ensuring its e-service quality by supporting the
the competition, and to increase enviromental awarness customers in their banking transactions with which the
inside and outside of the given corporation.(Pinter, Deutsch customer feel better relationship management through the
& Ottmar: 2006) institutional website. Internet banking, online banking or
website based banking services concepts are new in
Internet banking it has given banks a wider reach at emerging counry like india and are poised to change the
a marginally higer cost and has helped improve customer face of banking services. The diffusion of new technologies
experience bye providing banking services at their with user-friendly service dissmination models is supposed
fingertips. Customers can now handle transactions like to improve the banking services and developing customers
payments, remittances, trading, wealth management and relationship. Service quality is found to be a strong
portfolio management online. This has significantly reduce predictor of customer satisfaction (Cronin an Taylor, 1992;
customer footprint at the branches. (manohar & kumar, Cronin et al., 2000; Dabholkar et al., 2000; Spreng and
2013) Mackoy, 1996). In traditional retail banking service quality
dimensions of reational performance, core perfomance and
Mobile banking make custmer can check their
features performance were found to be significant
account balance, transfer funds 24 x 7, bill payments,
predictors of customer satisfaction (Levesque and
booking of bus/flight tickets, recharge prepaid mobile and
McDougall, 1996). Various studies have been conducted in
do a lot more effortlessly and securely. Banking through
similar area, where in banking service quality dimensions
cell phone benefits the banks too. It cuts down on the cost
have been tested as predictors of customers satisfactions
of tele-banking and is more economical. (manohar &
(krepapa et al., 2003; McDougall and Levesque, 2000;
kumar, 2013)
Ndubisi and Wah, 2005). In case of automated banking
ATM is designed to perform the most important service quality dimensions have been found to affect
function of bank. It is operated by plastic card with its customer satisfaction (Al-Hawari and Ward, 2006)
special features. The plastic card is replacing cheque,
Green banking can be efficiently implemented
personal attendance of the customer, banking hours
through the use of technology. A bank can make
restrictions and paper based verification. ATM itself can
improvement in the operational area by replacing the daily
provide information about customers account and also
courier service whith scans and electronic delivery.
receive instructions from customers/ATM card holders.
Employees can be sent paychecks and reimbursement
(manohar & kumar, 2013)
checks electronically to save paper. Implementation of
The banking operation and investment by financial online banking system can also lead to an increase in
institutions should take care of environmental management customer convenience, reduction in the costs incurred by
of these polluting industries by improving the overall the banks and an improvement in the banking performance.
environment, the quality and conversation of life, level of (Chadichal and Misra, 2015)
efficiency in using materials and energy, quality of services
Green banking functions in two ways. First, it
and products. (sahoo and nayak, 2008)
concentrates on the green renovation of the inner operations

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of all banks. It defines that banks, in their activities, must Yuniarti, Sari. 2013. Peran Perbankan Dalam
implement proper ways of utilising renewable energy, turn Implementasi Bisnis Hijau dan Pembangunan
to computerisation and additional procedures to reduce Berkelanjutan. Jurnal Keuangan dan Perbankan
carbon dependence. Second, all banks must agree to
ecologically sensible financing, emphasising ecological
hazards of assignments before making funding judgements.
Online fund transfers, paying bills online, remote deposit
and online statements are presently a few steps towards
green banking. Online banking may generate savings from
less paper, less power, and less expenses of natural assets
from banking activities. Any of these individual banking
performances can assist in environmental protection.
(shamir, 2015)

E. Conclusions

That green banking is a program that is beneficial

for all parties concerned both banks, consumers and the
environment, because of the presence of green banking
makes the whole aspect of being more concerned about
saving raw materials, especially paper and fuel for
transportation, so the presence of green banking,
environmental conditions more awake again and also
allows consumers to access their needs with their electronic
banking.

F. References

Polonsky, M. J. (2000): Green marketing

Pinter, Eva. Deutsch, Nikolett. Ottmar, Zoltan.

(2006) New Direction Line of Sustainable Development
and Marketing in Green Banking. Social Sience Research
Network

Marzio, R. 2007. Green Banks, Ethical Banks, Seed

Banks: Too Many Eco Something Banks’. Covalence
Analyst Papers. Geneva: Covalence SA.]

B. Manohar, CH. Vijaya Kumar. 2013. Green

Banking : Bye-bye cheques, hello electronic payments. Vol
1 pg. 60

Chadichal, Shilpa Santosh. Misra, Sheelan. 2015.

Exploring Web Based Servqual Dimensions In Green
Baning Services Impact on Developing e-CRM. ProQuest

ProQuest Report. 2015. Green Banking: Go Green,

Think Green. ProQuest

Rashid, Mamun. 2015. Green Banking. ProQuest

Shamir, Ahmed. 2015. Green Banking for Sound

Environment. ProQuest

Sahoo, Pravakar. Nayak, Bibhu Prasad. 2008. Green

Banking in India. Indian Economic Journal

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