By John Brown

Investors and customers support companies’ efforts to meet ESG criteria, which are increasingly essential business objectives. Furthermore, organizations such as the International Monetary Fund and the Nasdaq reflect the shift in interest in capital markets. 

By using tools like advanced data analytics, blockchain, or artificial intelligence, fintech can help businesses assess and lessen their environmental impact. It can also assist investors in directing their focus toward more sustainable assets. By 2030, sustainable business models could produce nearly 400 million jobs worldwide, mostly in developing nations, and economic opportunities worth $12 trillion annually.

How Fintech Implements a Green Economy

Using innovation to appeal to environmentally conscious consumers

By nature, the fintech industry is a greener substitute for the traditional finance industry. The days of driving to your bank branch to print a paper bank statement or having one mailed and delivered to your home are long gone in the newly revolutionized digital banking world. 

For example, when it comes to lending, online loans allow you to get the money you need today without having to leave your home. Online lending platforms provide a paperless, easy, and fast lending process, which most traditional lenders don’t offer. After your loan application is a success, the money gets credited to your bank account in mere days.

There is a persistent trend toward going digital: in 2020, 76% of UK citizens will regularly use online banking, up from 42% in 2010. Numerous advantages exist for the consumer, including improved convenience, a smaller carbon footprint, and improved personal financial management. 

Fintech is already tapping into the consumer demand for greener products, and it will keep investing in green projects to increase its market share in the current competitive finance industry.

Application of more environmentally friendly technologies

The legacy hardware and systems that traditional incumbents rely on are less eco-friendly than the agile technologies that fintech typically uses. In addition, on-site data centers need a lot of energy to operate, besides additional hosting resources and ongoing maintenance.

The popularity of cloud computing and cloud vendor services like AWS and Microsoft Azure, which are leading the charge in reducing carbon emissions, are being tapped by fintech companies. According to a report from October 2019, switching to the AWS Cloud can help businesses cut their IT operations’ carbon footprint by up to 88% by taking advantage of environmental economies of scale.

What Does The Future Look Like?

The development of blockchain technology is a crucial area for growth and investment because, when used effectively, the technology has significant implications for the future of green finance. For the benefit of people and the environment, the fintech industry is well-positioned to compete in this area and make significant environmental impact reduction efforts as we advance.

The average consumer should still think carefully about where their money is going and how it is being used; greenwashing, in which a company exaggerates the environmental credentials of its products, is still a significant worry. However, as was previously mentioned, blockchain offers a solution to the problem of ecological ambiguity.

Author’s Bio:

John is a financial analyst but also a man of different interests. He enjoys writing about money and giving financial tips, but he can also dive into relationships, sports, gaming, and other topics. Lives in New York with his wife and a cat.