Sustainable finance has emerged as a key driver of operational efficiency, risk management, and long-term profitability in the banking sector. This study aims to examine banking customers’ perceptions and awareness of sustainable finance practices and to assess their impact on internal banking operations, risk management systems, digital banking services, technological integration, and financial performance. Primary data were collected from 384 banking customers through a structured questionnaire and analysed using descriptive statistics, reliability testing, one-way ANOVA, Pearson’s correlation, and multiple linear regression. Findings reveal that customers exhibit a moderate to high level of awareness and a willingness to support eco-friendly banking initiatives. The survey instrument demonstrated high reliability with a Cronbach’s Alpha of 0.819. ANOVA results indicate significant demographic variations in customer perceptions, while correlation and regression analyses confirm that sustainable finance practices, environmental sustainability initiatives, digital banking services, and banks’ engagement with NGOs and green start-ups significantly influence internal operations and long-term profitability. The study concludes that sustainable finance is a strategic tool that enhances operational efficiency, technological integration, and financial performance, offering valuable insights for policymakers, banking institutions, and regulators to promote a resilient and sustainable banking ecosystem