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ASEAN Journal on Science and Technology for Development

Abstract

Neo-banks in India are harnessing data analytics to address ESG risks, collaborating with various stakeholders, and striving to promote ESG values. Their endeavours not only enhance the customer experience but also contribute to a more sustainable and ethical financial system, with the potential to reduce the carbon footprint as digital banking gains traction in India. We examine whether ESG-rated banks can diminish customer effort and improve the overall customer experience, ultimately encouraging greater participation in sustainable financial practices. We employ text mining to analyse 2156 reviews of ESG-rated banks' digital services, from which we derive the Customer Effort Score. We find a linear relationship between the ESG values and the Customer Effort Score. The customer reviews suggest that neo-banks in India have the potential to revolutionize the banking industry. However, they need to address customers' concerns regarding the limited range of products and services offered and the high interest rates on loans. ESG-rated banks are more likely to take a customer-centric approach to their business. Banks with firm ESG commitments tend to uphold transparent supply chains, improving customer experiences and higher Customer Effort Scores. Consequently, banks are increasingly adopting ESG principles as an integral part of their business models. ESG ratings are a valuable metric for gauging a bank's commitment to long-term sustainability. We find that banks with a strong commitment to ESG principles are more likely to maintain transparent and ethical supply chains, thereby reducing the risk of their customers encountering privacy-related issues or questionable practices.

Keywords

Text mining, ESG values, Customer Effort, Neo-banks

Publication Date

2024

Received Date

23-Oct-2023

Revised Date

2-Jan-2024

Accepted Date

28-Feb-2024

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