Fintech
Industry Favorites: Emerging Ethical Fintech Solutions
Now, with a focus on social and environmental impact, the term “fintech for good” has evolved from its initial meaning of charity. But it doesn’t stop there. This July, we’re on the hunt to discover how the fintech sector is doing “good” for local communities and the world, revealing current and future plans to make changes.
The terms ethical finance and ethical banking often go hand in hand with climate awareness and a focus on net zero. However, they are not limited to climate. In our next subtopic, we explore ethical fintech on a broader scale, starting by hearing from industry experts about their favorite companies paving the way for a more ethical future.
Algbra, Zumo and Bloom Money
For Zahra AlubudiCOO and co-founder of Levenuethe European market that offers financing to businesses, there are three companies that stand out.
“1) Algebra is an ethical finance app that, among other features, allows users to monitor their ecological footprint and offset it, for “ethically managing their money” since they do not include high-risk investments or unethical investments. Another thing that struck me is that they donate 10 percent of their annual profits to charity.
“2) Zumo: their business model is to build a sustainable and compliant future for digital assets. I was interested when they launched “Oxygen” last year, to provide ESG-aligned digital asset solutions. It helps clients mitigate environmental challenges related to their digital assets.
“3) Blooming moneywhich specifically targets immigrants to the UK and helps them build wealth for future generations. It was created specifically for ethical pooling of funds and community support.”
Origin, Everledger and Kiva
Giving consumers the tools to make informed decisions in line with their ethical values is very important to identify Peter Woodtechnical director at Spectrum Researchthe web3, crypto and blockchain recruitment agency.
“One of my favorite ethical fintech solutions is the use of blockchain technology for transparent supply chains. Platforms like Origin AND Evergreen textbook use blockchain to ensure the authenticity and ethical sourcing of products.
“By providing an immutable record, these solutions allow consumers to verify a product’s journey from source to shelf, ensuring it adheres to ethical standards such as fair labor practices and environmental sustainability. This not only promotes corporate responsibility, but also enables consumers to make informed decisions that align with their values.
“Another noteworthy aspect ethical fintech initiative is a peer-to-peer (P2P) lending platform that focuses on social impact. Platforms like Kiva facilitate micro-lending to entrepreneurs in developing countries, often those without access to traditional banking services. These platforms provide much-needed capital to individuals, fostering entrepreneurship and economic growth in underserved communities. Borrowers’ success stories often ripple across entire communities, making P2P lending a powerful tool for social good.”
Aspiration and Tandem Bank
Quentin FillingCEO of Qoverthe integrated insurance orchestration platform, explains how ethical finance also applies to the “S” of ESG: social.
“One of my favorite ethical fintech solutions is Aspiration. I am impressed by its commitment to sustainability and its model that allows customers to align their finances with their values. It ensures that deposits do not fund fossil fuel projects and plants trees with every debit card purchase.
“Another great example is Tandem Bankthat 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 LebecFounder and CEO, Lebecthe innovative finance and philanthropy firm, emphasizes the importance of a diverse board and team, while also stressing the importance of prioritizing “social” goals.
“My favorite fintech solutions are reshaping industries to better serve all consumers, with sustainability and inclusion at the heart of their efforts. Centaura US startup specializing in financial education founded by a diverse team, is a clear example of this.
“In a time of rising inequality where too many families are left with excessive debt and low credit scores, Centsai is leveraging technology and AI to democratize access to dynamic financial literacy education, partnering with financial institutions and educational ecosystems to do so.
“Another example is ElenaLatin America’s largest social commerce platform that has quadrupled the earnings of women entrepreneurs in Colombia and Mexico who traditionally relied on informal sales channels to sell their products. Elenas has improved these women’s door-to-door and catalog sales model by moving operations online, offering a more sustainable and scalable approach.
“Aflorala Bogota-based fintech company, uses technology and an innovative business model to provide vulnerable and middle-class families with access to formal financial services. In Latin America, where 65 percent 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 percent of Aflore’s clients are women, a significant statistic in a region where women drive 70 percent of consumer spending.”
Cogo, Emitwise and Bunq
FinTechs have the task of enlightening users and thinking differently about their finances and for Steve Morganworld leader in the banking sector at Pega Systemslow-code platform provider, these companies are pioneering alternative ideas and offerings.
“There have been some good examples of companies creating carbon footprint trackers, which I think are great for raising awareness about the personal and business impacts we have. A great example of an impact tracker or offering would be Cogoor a more accounting-focused solution like Emit wisely.
“These solutions really help businesses and individuals increase their understanding and think about alternative options. I set up my checking account to connect to Cogo and was really interested in seeing what impact my spending habits were having on emissions.
“Other solutions focus on providing ethical banking solutions, geared towards investments, ESG products or environmentally friendly rewards. For example, Bunq which focuses on freedom of choice on how to invest deposits and plants a tree every time a customer spends a certain amount.”
