Why fintechs can’t afford to swipe left on ESG
While the fintech industry thrives on innovation and disruption, there’s a new buzzword making waves: ESG (environmental, social, and governance).
ESG isn’t just another acronym to throw around in meetings to sound smart
If you’ve ever questioned whether your fintech firm should embrace ESG or leave it to the traditional financial institutions, it’s time to take notice. It’s time to embrace ESG.
Why is ESG a perfect match for fintech?
Fintech is all about efficiency, transparency, and doing things differently. But let’s not forget the aftermath of the 2008 financial crisis. The public became skeptical of opaque financial practices. We’ve always claimed to be different, so let’s truly stand out by going beyond flashy user interfaces and low fees. By integrating ESG principles into our core operations, fintechs gain a competitive edge in the crowded digital space.
The value of ESG in fintech
Risk mitigation: Have you ever experienced a software glitch during a demo? Now imagine the magnitude of potential mishaps when you disregard ESG. Regulatory penalties, negative publicity, and loss of user trust to name just a few. ESG isn’t just about saving the environment. It’s about safeguarding your brand from potential disasters.
Attract and retain: In the digital age, customer acquisition costs are as unpredictable as dating app algorithms. But brands that reflect ethical and sustainable values? They have a special charm. Employees, customers, and investors are more likely to be drawn to fintechs that demonstrate genuine ESG commitments.
Steps you can take
Delve into the digital world: Begin with a comprehensive ESG assessment. Analyse your firm’s digital carbon footprint. Review partnership agreements for clauses related to social responsibility. The devil is in the details.
Shift your strategy: Integrate ESG objectives into your business roadmaps. Just as you wouldn’t launch a new app feature without a plan, don’t treat ESG as an afterthought.
Engage and enchant: Engage with your stakeholders. Host AMAs (ask me anything) on your platforms to discuss ESG goals. The fintech community thrives on innovation, so be open to their feedback.
Monitor and match: Fintech is data-driven, so treat ESG metrics with the same importance as your daily active users or conversion rates. Regular reviews ensure you’re not just paying lip service.
Educate and elevate: Continual learning is essential. Host webinars or workshops about ESG for your employees. Bring in certified experts. Heck, create a gamified app about ESG (after all, you’re a fintech innovator). The more you educate your team, the more deeply embedded ESG becomes in your company’s ethos.
The winning formula: technology + ESG
With the advantage of being tech-driven, fintech companies are uniquely positioned to lead the way in integrating ESG. We can use AI to predict ESG-related risks, blockchain to trace sustainable supply chains, or analytics to measure the social impact of investments. While traditional banks take baby steps, let’s leap forward with a tech trampoline.
Wrapping up
Dear fintech enthusiasts, ESG isn’t just another acronym to throw around in meetings to sound smart. It’s a crucial strategy, a differentiator for your brand, and above all, it’s the right thing to do. As we shape the financial future with technology, let’s ensure it’s a sustainable and ethical one.
Because when the history books are written (or should I say, when the blockchain records are reviewed), let’s ensure that fintech stands out not only for its disruptive technologies, but also for its commitment to creating a better world. Swipe right on ESG, and let’s create a fintech match made in heaven.
About the author
Gihan Hyde is the award-winning communication specialist and founder of CommUnique, an ESG communication start-up.
She has been implementing ESG campaigns in eight sectors, across six countries over the past 20 years.
Her campaigns have positively impacted over 150,000 employees and 200,000 customers and have closed over £300m in investment deals. Some of the clients she has advised include The World Health Organisation (WHO), HSBC, Barclays, M&S, SUEZ, Grundfos, Philip Morris, USAID, and the Saudi Government.
Get in touch with Gihan through LinkedIn or X @gehanam.
