Now encapsulating a focus on societal impact and the environment, the term ‘fintech for good’ has evolved from its initial meaning of charity. But it doesn’t stop there. This July, we are on the hunt to find out how the fintech industry is doing ‘good’ for local communities and the world, revealing current and future plans to make change.
The terms ethical finance and ethical banking often go hand in hand with climate awareness and focusing on net zero. However, they are not restricted to the climate. In our next sub-topic, we explore ethical fintech on a greater scale, starting by hearing from industry experts about their favourite firms paving the way to a more ethical future.
Algbra, Zumo and Bloom Money
Zahra Alubudi, COO and co-founder of Levenue
For Zahra Alubudi, COO and co-founder of Levenue, the European marketplace providing firms with financing, there are three companies that stand out.
“1) Algbra is an ethical finance app which amongst other features enables users to track their carbon footprint and offset it, to ‘manage their money ethically’ as they do not include high-risk investments or unethical investments. Another thing that stood out to me is that they commit 10 per cent of their annual profits to charities.
“2) Zumo: their business model is to build a sustainable, compliant digital asset future. I became interested when they launched ‘Oxygen’ last year, to provide ESG-aligned digital asset solutions. It supports customers to mitigate the environmental challenges linked to their digital assets.
“3) Bloom Money, which specifically targets immigrants in the UK and helps them build wealth for future generations. It is purpose built for ethical pooling of funds and community support.”
Provenance, Everledger and Kiva
Peter Wood, CTO at Spectrum Search
Empowering consumers to make informed decisions that align with their ethical values is very important identifies Peter Wood, chief technical officer at Spectrum Search, the web3, crypto and blockchain recruitment agency.
“One of my favourite ethical fintech solutions is the use of blockchain technology for transparent supply chains. Platforms like Provenance and Everledger utilise blockchain to ensure the authenticity and ethical sourcing of products.
“By providing an immutable ledger, these solutions enable consumers to verify the journey of a product from origin to shelf, ensuring it adheres to ethical standards such as fair labour practices and environmental sustainability. This not only promotes corporate accountability but also empowers consumers to make informed decisions that align with their values.
“Another noteworthy ethical fintech initiative is peer-to-peer (P2P) lending platforms that focus on social impact. Platforms like Kiva facilitate microloans to entrepreneurs in developing countries, often those who lack access to traditional banking services. These platforms provide much-needed capital to individuals, fostering entrepreneurship and economic growth in underserved communities. The borrowers’ success stories often ripple out to benefit entire communities, making P2P lending a powerful tool for social good.”
Aspiration and Tandem Bank
Quentin Colmant, CEO and co-founder at Qover
Quentin Colmant, CEO at Qover, the embedded insurance orchestration platform, explains how ethical finance also applies to the ‘S’ in ESG: social.
“One of my favourite ethical fintech solutions is Aspiration. I’m impressed by its commitment to sustainability, and its model empowers customers to align their finances with their values. It ensures deposits don’t fund fossil fuel projects, and plants trees with every debit card purchase.
“Another great example is Tandem Bank, which focuses on offering green mortgages that help homeowners improve the energy efficiency of their properties. These platforms are excellent examples of how fintechs can drive positive environmental and social change.”
Centsai, Elenas, and Aflore
Alix Lebec, founder and CEO, Lebec
Alix Lebec, founder and CEO, Lebec, the innovative finance and philanthropy firm, notes the importance of a diverse board and team, also emphasising the importance of prioritising ‘social’ goals.
“My favourite fintech solutions are reshaping industries to better serve all consumers with sustainability and inclusion at the centre of their efforts. Centsai, a US-based financial literacy startup founded by a diverse team, is a standout example.
“In a time of rising inequality in which too many families end up with excessive debt and poor credit scores, Centsai is leveraging tech and AI to democratise access to dynamic financial literacy education, partnering with financial institutions and education ecosystems to do so.
“Another example is Elenas, Latin America’s largest social commerce platform that has quadrupled income for women entrepreneurs in Colombia and Mexico who traditionally relied on informal sales channels to sell their products. Elenas improved these women’s door-to-door and catalog sales model by moving operations online, thus offering a more sustainable and scalable approach.
“Aflore, a Bogotá-based fintech company, employs technology and an innovative business model to provide vulnerable and middle-class families with access to formal financial services. In Latin America, where 65 per cent of the population is unbanked, Aflore’s approach focuses on recruiting, training, and managing a network of mobile-enabled financial advisors for the middle class. Notably, 57 per cent of Aflore’s clients are women, a significant statistic in a region where women drive 70 per cent of consumer spending.”
Cogo, Emitwise and Bunq
Steve Morgan, global banking industry lead at Pegasystems
Fintechs have a role to enlighten users and think differently about their finances and for Steve Morgan, global banking industry lead at Pegasystems, the low-code platform provider, these companies are leading the way for alternative thinking and offerings.
“There have been a few good examples of companies setting up carbon footprint trackers which I think are great for raising awareness on personal and business impacts we make. A leading example of a tracker or impact offering would be Cogo, or a more accounting-focused solution such as EmitWise.
“These solutions really help companies and individuals increase their understanding and make them think about alternate options. I set up my current account to link to Cogo and was really interested to see what impact my spending habits had on emissions.
“Other solutions focus on delivering ethical banking solutions either skewed towards investment, ESG linked products or rewards that are environmentally friendly. For example, Bunq which is focused on giving freedom of choice of how deposits are invested and they plant a tree every time a customer spends a certain amount.”
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