UK fintechs need to work on green credentials
97 per cent of UK fintechs are having a positive impact across productivity, financial inclusion, peace and justice, but just nine per cent are having a positive impact on the planet, according to a new report from Innovate Finance.
The fintech industry trade body has published a study into the impact that fintechs are having in the UK, judged against the United Nations Sustainable Development Goals (SDGs).
It found that 98 per cent of UK fintechs are positively impacting productivity, including economy and jobs, while 37 per cent are beneficial to people thanks to fintechs’ efforts in addressing inequality.
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This includes improving access to financial services, and alternative lending methods for people with thin credit files.
36 per cent of fintechs are positively impacting peace, the report said, by reducing illicit money flow and increasing accountability through enhanced know your customer and compliance solutions.
However, just nine per cent of fintechs were found to have a positive impact on climate, which the report said was “surprisingly low” given the focus on climate change and clean tech.
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Fintechs are empowering impactful consumer behaviour and boosting environmental, social and governance transparency for smaller businesses, but there is still work to do to improve the industry’s effect on the planet, the report said.
Fintechs have been urged to reduce the natural resources and critical minerals dependencies powering the tech industry, move beyond counting carbon to addressing wider biodiversity impacts, and encourage sustainable financing.
“In today’s dynamic financial services landscape, the fintech sector stands as a beacon of innovation and positive transformation,” said Innovate Finance chief executive Janine Hirt (pictured) in the report.
“Already significantly contributing to economic growth and employment across the UK, the sector has also demonstrated over the past decade its commitment to creating solutions for other critical societal challenges – from the financial crash of 2008, to the Covid-19 pandemic in 2021, to the challenges afforded by the current cost of living and climate crises.
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“By quantifying the fintech sector’s impact, our hope is that we will enable key decision- and policy-makers across government, industry, regulators, and the private and public sectors to ensure the right solutions are being developed to support the growth of this thriving ecosystem.
“As we face the global challenge of meeting the United Nations’ 17 SDGs, it is critical – now more than ever – that we better understand and harness the power of fintech to drive forward progress and solutions across these priority areas.
“I hope the findings in this report inspire further action to accelerate the continued positive growth of our UK fintech sector – a sector which I believe is truly transforming financial services, and the world, for the better.”