How do Fintechs Address the Sustainability Challenge?

The term “Finance technology” (Fintech) is used to describe new technologies that serve the financial industry. They help for example companies and individuals to better manage their financial operations, to choose the right investment or to digitalize their account opening process. But, how do Fintechs address Sustainability ?

Fintechs, like other companies, can sell their services to companies such as banks or insurers (B2B Fintech) or to individuals (B2C Fintech).

The first Fintechs, which emerged mainly in the 2000s, initially focused on providing IT architectures for financial institutions, so-called “core banking” systems.

Gradually, their services diversified by offering, for example, automated investment for individuals (robo-advisors), collective investment platforms (crowdfunding) or applications to help individuals better manage their savings.

A growing number of Fintechs in the field of sustainable finance

In recent years, sustainable finance has become the norm in the investment world. The European Union has published numerous directives to classify financial products according to their impact on sustainable finance and to collect the preferences of individuals on the subject. Furthermore, the assessment of investors’ sustainability preferences will soon become mandatory for financial institutions according to European regulations.

Numerous Fintechs have emerged in recent years to respond to the growing interest of individuals in the subject and to these regulatory changes.

Examples of Fintechs in the sustainability area

B2B “Green” Fintechs

In order to “clean up the world of finance”, many Fintechs have recently emerged to offer directly to individuals products that have been scrupulously audited for their green impact. This is the case for Helios, Goodvest, Radicant or OnlyOne.

B2C “Green” Fintechs

In order to meet the new European regulatory requirements, other fintechs are intervening in the analysis of the impacts of financial products (Greenomy, Weefin, Fingreen…) or the evaluation of sustainability preferences, such as Neuroprofiler’s ESGprofiler module.

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