Across the region, a quiet change is taking place. Young people are rethinking what their money represents. They are choosing to align how they spend, save, and invest with the kind of world they want to live in.
This represents a shift in consumers’ mindset, one that is beginning to reshape retail banking from the inside out. Recent global data shows just how deep this shift goes. A 2025 Morgan Stanley study found that 99 percent of Gen Z investors are interested in sustainable finance.
Eight in ten Gen Z and Millennial investors plan to increase their sustainable investments this year. This demand for sustainability is also reshaping purchasing decisions. A study by Bain & Company found that nearly two-thirds of consumers are willing to pay more for products that reflect their environmental and social values. These attitudes are influencing how consumers make their day-to-day financial choices.
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Embedding sustainability into everyday finance
While retail banking has long been a channel for access to homes, education, savings and mobility, today it is being called to do more. Today, banks influence how people allocate their funds, how they manage risk, and whether they have the tools required to make values-based decisions in their day-to-day lives.
Yet in many cases, financial systems have not caught up. Most retail products remain designed for volume and efficiency, not values. Consumers may want to act on their values and principles, but the tools they rely on often leave them with no meaningful choices.
This gap between intent — the ‘want to’ — and action — the ‘can do’ — is a missed opportunity. And not just for individuals, but for banks. Financial institutions influence how people behave every day. That influence can accelerate sustainable progress or slow it down.
Call to action
Some banks are starting to respond. New features are emerging across cards, apps, and digital channels. Biodegradable cards are replacing traditional plastic. Carbon footprint trackers in mobile apps nudge customers with data and insights on the impact of their spending to help them make real-time adjustments. These developments reflect progress, pointing to a broader evolution in how banks support more responsible financial decision-making.
Alongside this, simple design features are shaping behavior in subtle but consistent ways. Nudges toward paperless bank statements, insights on lower-emission spending, or automated round-ups that direct spare change to environmental projects are becoming more common. These interventions do not require consumers to enrol in separate programs. They work because they are built into the daily experience of personal banking.
The great sustainability shift
Lending products are evolving in parallel. Retail loans with preferential terms for electric vehicles or home energy upgrades make sustainable decisions more financially viable. On the savings and investment side, products like green deposits and ESG-linked mutual funds allow individuals to direct their capital toward climate-positive projects. In the GCC, the growth of sustainable sukuk is extending responsible investing to a broader retail base.
This momentum is enabled by the maturity of digital banking in the region. Mobile platforms are now central to how most consumers manage their finances. Recent studies found that almost all of them used a mobile banking app in the past month, and nearly half manage their finances entirely through their smartphones.
These findings show that digital channels now offer a powerful way to directly engage with consumers in real time to help them understand the impact of their financial choices and offer guidance toward more sustainable financial options. When digital banking platforms are designed to support better choices, sustainability becomes a natural part of day-to-day financial activity.
At Mashreq, we are seeing this shift take shape. The adoption of carbon tracking tools, increased engagement with digital prompts, and growing demand for ESG-linked savings products all suggest that consumers are willing to act when they are given the right infrastructure.
Scaling with trust and collaboration
These early shifts offer a blueprint, but scaling will require broader alignment across the sector, including banks, regulators and fintechs. Shared taxonomies, certification frameworks, and transparent data will be key to unlocking progress. The bigger opportunity will lie in building systems that empower better choices without complexity or compromise.
The future of retail banking in the GCC will not be defined by access or innovation alone. It will be shaped by how intentionally products are designed, and how effectively they enable people to act on what they believe. The infrastructure built today and the way it informs, simplifies, and guides consumers will determine whether financial behaviour becomes a lever for social and environmental resilience.
Retail banking is becoming a behavior-enabling system. It now has the reach, the tools, and the mandate to help individuals act on their values. This shift is already beginning to define institutional relevance for banks in the GCC. Banks that design for purpose will remain central to the next era of finance and economic change.
Fernando Morillo is the group head of Retail Banking at Mashreq.
