Over the decades, the financial sector has also been one of the primary adopters of cutting-edge technology and saw the rise of FinTechs, using smartphones, application of artificial intelligence (AI) and machine learning (ML), data analytics, the Internet of Things (IoT), distributed ledgers (blockchain) and the likes, have entirely disrupted the way financial institutions operate and service their customers.
In a post COVID-19 world of financial services, green and sustainable finance is increasingly getting due attention, and is now moving into the mainstream through policy, regulation, market forces and, most importantly, through consumer demand – both Corporate and Retail.
In order to achieve the UN’s Sustainable Development Goals (SDGs) and the Paris Agreement on Climate Change, it is estimated that approximately US$5-7 trillion in Environmental, Social and Corporate Governance (ESG) investments will be required annually. The FinTech industry, with its emphasis on agility and innovation in technology, is increasingly supporting the scaling up of ‘green finance’ to help achieve these goals, suggesting the potential to raise public and private funds to do so.
Green Finance
In fact, green finance has become a key policy concern for many emerging economies. Green FinTech is a combination of finance and technology, with the added benefit of contributing to the protection of tourism and is emerging in the UK and other countries. It is also being used as a platform for realizing the idea of green finance.
One example is the creation of a mobile bank account, which is a paperless system that eliminates plastic cards and paper statements and allows users to complete all their transactions on their smartphones. Beyond that, there are also services available that allow you to convert your consumption into a carbon footprint, helping you to see what part of your lifestyle, including your shopping and consumption, is impacting climate change.
FinTech and Green Finance
New financial technologies (fintech) offer the potential to unlock green finance technologies, such as blockchain, the Internet of Things and big data, developed over the same time frame as the Paris Agreement and the SDGs.
Recent years, FinTechs going green is a popular subject among investors, startups, software development specialists, and users alike. Sustainable FinTech companies are not a buzzphrase anymore. It’s a strong trend that grows and fuels another revolution in the finance world. A green one; literally and figuratively speaking.
Summary
In finance, being green may take several forms. Top fintech companies USA aggressively support good customer behavior change to reduce wasted expenditure and, by extension, carbon emissions. Companies focusing on environmental projects may apply for green loans and investments. By definition, microfinance organizations and money transfer services help to relieve poverty and socioeconomic inequality. There are also other initiatives, such as converting to biodegradable cards.
However, given the status of the globe, this is certainly inadequate. Blockchain, cloud computing, big data, and other related discoveries have enormous potential for causing a fundamental change in the financial industry toward more fair and ecologically responsible development. Even though the demand for eco-consumption is still in its infancy, top environmental startups in this sector should be guided by mindful production principles.