How does FinTech join the green movement?
Today the world is changing rapidly, accelerating global transformations. The business has to adapt many times faster than it was even five years ago. In such conditions, it’s important to understand market trends to get into the right course in time.
Now researchers differentiate two obvious macro tendencies: the development of technologies and the desire to reduce environmental impact. Indeed, along with innovations, the negative impact on the ecology also increases.
Businesses must meet their needs without compromising the future. But how do they implement it today?
How can financial services help improve the environment?
Technological development in the financial sector can help significantly reduce the burden on the environment.
#1. FinTech can become part of a conscious lifestyle and part of a business strategy
FinTech product development makes it possible to conduct transactions in real-time and reduces the number of transactions with paper money.
Even Bill Clinton, as President of the United States, set a course for a “paperless economy”. The endless papers that we sign mean the destruction of the forests, and the production of paper pollutes the environment. Everything possible should be in an electronic form. Avoiding paper money will help to avoid environmental problems as well.
#2. FinTech stimulates changes in consumer behavior
FinTech helps transform customers into more conscientious buyers. Some apps track a user’s purchases, collect data on their carbon footprint, and then provide recommendations on how to reduce it.
The NetZero app shows users their high emission categories and suggests ways to change spending habits to reduce their carbon footprint. Atmos Financial provides savings accounts that are devoted to green projects – solar power plants, regenerative agriculture. Atmos itself is not a bank, but it works with them. The startup transfers customer money to Evolve Bank & Trust, an institution insured by the Federal Deposit Insurance Corporation.
#3. FinTech helps fight poverty and inequality
High-tech companies make finance affordable, help integrate different segments of the population into the financial system, which is important primarily for the most vulnerable people. Fighting poverty is part of a sustainable development strategy formulated in the UN Commission’s Our Common Future report. Economic growth shouldn’t lead to environmental destruction but address inequality and poverty. FinTech responds to these calls.
#4. FinTech and IT companies set environmental goals
For example, Microsoft wants to achieve carbon neutrality by 2030. To do this, the company is implementing a wide range of initiatives, from the use of electric vehicles to planting new trees. French company Helios has partnered with Solarisbank to print its cherry debit cards.
Mastercard founded the Priceless Planet Coalition in 2020, a global initiative whose main goal is to restore 100 million trees in five years. Ukrsibbank BNP Paribas Group has recently joined the initiative. The innovation provides that the bank’s clients will be able to contribute to the restoration of forests by making contactless NFC payments with their Mastercard from Ukrsibbank. For such settlements with Mastercard, the bank will additionally allocate funds for planting 75 thousand trees in the forests of Australia, Kenya, and Brazil.
Nevertheless, given the ecological situation, FinTech’s contribution alone is not enough. We can only hope that the evolution of blockchain, cloud technologies, big data, and other related innovations will transform the financial system, making it focused on inclusive and sustainable development.
Modern business must think about what impact it has on the environment. Without this, humanity simply cannot avoid harmful climate change.