Chinese banks use personal carbon accounts to increase user engagement

A growing number of Chinese commercial banks are providing personal carbon account services amid ongoing efforts by the central government to use green finance to reduce carbon emissions.

Banks in China that have already launched their own personal carbon account services include China Construction Bank (CCB), China CITIC Bank, Ping An Bank, Shanghai Pudong Development Bank and Bank of Guilin.

These personal carbon accounts involve using the banks’ own programs to record users’ “green behaviour” and reward them with merit points based on their cumulative carbon reductions. In the future, users can exchange green points in banks for gifts, consumer discounts on bank cards, discounts when paying, as well as discounts on loans.

In the case of CCB’s personal carbon account services, customers use the CCB app to record carbon reductions when it comes to using public transport, such as buses or trains, or in other areas of commercial life. Points accumulated for reducing carbon emissions are then exchanged for special discounts from the bank.

Insiders note that banks’ introduction of personal carbon accounts could be beneficial to their business interests when it comes to customer retention.

“At present, many banks have already launched their personal carbon accounts, but their functionality is different from that of online platforms,” ​​said Yu Baicheng (于百), head of Linyi Research Institute (零壹研究院), China Securities Journal.

“When we compare them, the ‘green energy’ (结果花力) provided by Alipay are virtual points based on low-carbon behavior that have broader implications for public benefit.

“Personal carbon accounts provided by banks effectively integrate carbon behavior with financial services, helping to encourage users to tie their everyday fees to these banks, increasing flexibility between users and banks.

“It extends the relevant service applications for the bank itself and has significant transactional value.”

Yu goes on to note that personal carbon accounts are still in their infancy in China.

“In the field of carbon finance, commercial banks are still in the testing phase and have not yet formed mature operating models or closely integrated them with financial scenarios,” Yu said.

“When it comes to transaction channels, they mostly rely on mobile banking apps or credit card apps. Looking to the future, more commercial banks will join those who are “testing the waters” of personal carbon accounts.

“This can lead to an increase in high-frequency services for customers, which contributes to the formation of green ecosystems of low-carbon commercial banks.”