A Commerce-Driven Green Credit Score Wallet for Enhancing Green Banking Adoption and Customer Engagement in Retail Banking

Abstract

Due to the increasing environmental issues and pressure on financial institutions to ensure they finance sustainable development, green banking practices have become a necessity. Nonetheless, the gap between awareness and actual practice of green banking among customers is observable in the form of retail banking in the real world, and mostly in urban areas such as Chennai. Such a lag is based on the lack of individual incentives and concrete commercial advantages that are consistent with the daily financial experience of the customers. To overcome this problem, the proposed study introduces an innovative, commerce-oriented solution, namely, the Green Credit Score Wallet (GCSW), a digital solution that can be built into the existing retail banking apps and which measures the financial activities (continued online transactions, paperless statements, off-line purchases of environmentally friendly goods, payment of electric vehicle) adopted by customers to calculate their Green Credit Score in real-time. This is an algorithmically generated score based on a weighted formula that considers conduct and is directly linked to commercial motivation. This includes dynamic cashback, favorable loan interest rates, and partnerships with green merchants at the point of sale, offering a discount incentive based on the point of purchase. Using the transaction transparency provided by a blockchain and the incentive offered by reward-driven gamification, the GCSW would generate an objective, quantifiable system that induces self-interest among customers to engage with the GCSW and the network and be more responsible for the environment. The potential of the model is confirmed by information provided by a survey of retail banking customers based in Chennai, where there was a high degree of correlation between the score assigned to them through the Green Credit Score and their raised satisfaction, engagement, and the desire to use sustainable banking activities. It is concluded by the study that integrating commerce-based sustainability incentives into digital banking platforms can be a crucial step in furthering the adoption of green banking in general, not to mention the improved instantiation of the will to act on climate-friendly intentions, which is the primary gap to be filled by injecting digital banking systems with global sustainability incentives. This model provides a scalable pattern for banking organizations to blend green intentions with economic benefits in emerging markets.