Fintech’s Potential to Create Positive Change: A Closer Look at «Fintech for Good»

In the dynamic world of fintech, the catchphrase «fintech for good» frequently takes center stage. It’s the buzzword that resonates when fintech leaders convene, but the question remains: is this phrase a substantive concept or merely an industry idealistic aspiration?

«Fintech for good» embodies the notion of utilizing financial technology and its innovations to build a more inclusive and accessible world, writes Polly Jean Harrison for The Fintech Times. This encompasses addressing financial disparities like poverty and exclusion as well as global challenges such as climate change.

Greg Ott, CEO of Nav, a platform focused on small business financial health, offers his perspective on the term. He articulates, «It’s about prioritizing historically underserved groups, such as small business owners, and placing them at the heart of every decision. Embedding the concept of ‘good’ into products, rather than treating it as an afterthought for engagement or performative gestures, is the genuine way to achieve impactful ‘good’.»

Fintech’s innate potential to innovate and solve problems is undeniable. It flips industry challenges on their head, generating ingenious solutions that capture attention. With this propensity for innovative solutions and a collective can-do attitude, it’s logical for the fintech sector to channel its collective power toward positive change. However, the pertinent question remains: is it feasible?

The ubiquity of the phrase «fintech for good» may have desensitized its impact. The current state of affairs further fuels cynicism. Does the pursuit of good remain an elusive pipe dream? A tantalizing yet unattainable notion to uplift our spirits? Or could it be a mere marketing gimmick? A declaration of intent to «do good» that lacks substantive follow-through, achieved through token gestures like tree planting or occasional charity donations.

While cynicism is a natural response, numerous individuals within the industry remain fervent believers in fintech’s potential to enact positive change. Ashley Aydin, from VC firm VamosVentures, emphasizes that fintech can simultaneously drive business success and contribute positively. By streamlining financial experiences and democratizing financial knowledge, fintech can empower underserved individuals to accumulate wealth, facilitate seamless payments, foster business growth, and more.

Fintech’s most straightforward path to doing good involves extending financial opportunities to marginalized groups. This aligns with the core purpose of much of the industry. Nevertheless, James Galassi, from Acuity Knowledge, asserts that good intentions alone are insufficient. He contends that companies must be fueled by a higher purpose, one that seeks genuine and lasting change. This requires humility and a true understanding of customer motivations to develop products that genuinely resonate.

Philip Hart, from ClearBank, underscores that «fintech for good» isn’t a mere marketing facade; it’s a tangible force for positive transformation. To be effective, fintech must address existing issues and scenarios where it can make a meaningful impact. A prime example is the provision of financial services to the unbanked population, a segment at risk of being left behind in the digital payment shift. Fintech can pave the way for broader access and increased choice.

ESG standards play a significant role in this context. Gabby Kusz, CEO of the Global Digital Asset & Cryptocurrency Association, emphasizes that aligning with ESG principles is pivotal for any business vertical aspiring to achieve its own «for good» objectives. As ESG standards evolve, business sectors’ ability to contribute positively will also progress.

It’s worth acknowledging that fintech is already generating positive outcomes. The unbanked and financially excluded segments are experiencing tangible benefits. Fintech is playing a pivotal role in their lives, underscoring that the aspiration for good isn’t mere wishful thinking. Fintech’s impact is visible in providing free financial services access, enhancing decision-making through digital products, and catalyzing sustainable growth.

Fintech’s influence extends to financial education. Stuart C. Harvey Jr., from Rego Payments, affirms that fintech’s capacity for good is closely tied to education and experience. Addressing the lack of financial education is crucial, as studies show its impact on individuals’ financial well-being. Fintech services are stepping in to bridge this gap, equipping parents with tools to educate their children about personal finance.

While progress has been made, there’s still a long way to go. Global financial inclusivity and widespread investment knowledge remain elusive goals. However, even incremental advancements hold value. The ongoing debate about fintech’s potential for social good will persist, alongside its status as a buzzword. As demands for sustainability, accessibility, and inclusivity surge, fintech’s role in addressing these issues will continue to expand. The industry’s future lies in the nexus of innovation and purpose, driving progress toward a more equitable financial landscape.

Other articles
The Transformational Power of AI in Finance
Bluefin and Mastercard Click to Pay Collaborate to Elevate Merchant Checkout Experience
Ubuy and Nuvei Join Forces to Enhance Global Payment Solutions
Varo Bank Introduces Varo for Everyone: A Free Instant Payments Feature
Reducing Delinquencies: The Power of Personalized Payment Links
The Challenge of Big Tech Payment Solutions for Niche Merchants
SC Ventures Unveils audax Financial Technology: New BaaS Solutions
How Fintech Can Boost Business Efficiency
Game-Changing Technologies Reshaping the Landscape of Fintech for Small Businesses
Tuum and Paymentology Forge Strategic Partnership to Transform Financial Services Landscape
U.S. Treasury Releases Guidelines for Climate-Conscious Financial Institutions
The Power of BNPL: Why Merchants Should Embrace Buy Now, Pay Later
FreedomPay Joins Forces with Worldpay to Improve Global Payments
Enhancing Healthcare Quality: Overcoming Limitations of Clinical Audits with FinTech Solutions
Mastercard and Saxo Bank Revolutionize Banking with Open Banking Account Feature