FinTech, a portmanteau of “financial technology,” represents a transformation in the global financial landscape. It has challenged and modernized the traditional paradigms of financial services, offering innovative solutions that cater to the evolving needs of consumers and businesses alike.
It is a broad field encompassing various products and services. This includes blockchain, crowdfunding, cryptocurrency, digital banking, insurance, mobile transactions, personal finance management, regtech, robo-advisors and stock trading, amongst many others
FinTech companies are playing a bigger role in making the world a better place. Many successful FinTech companies are contributing vastly to align their goals to long-term positive impact, paying attention to environmental, social, and governance (ESG) factors, enhancing their contribution to the Sustainable Development Goals.
Investors are increasingly drawn to opportunities that promise financial returns and positively impact society and the environment.
Digital wallet is an application, or a form of online financial service that facilitates its users to make payments without the need of using their actual wallet. Commonly used digital wallets include Google Wallet, Apple Pay, PayPal, Venmo and Cash App Digital wallets are predominantly used on mobile devices, using technological features such as Near Field Communication (NFC), Magnetic Secure Transmission (MST) and QR codes. These digital wallets are not just advantageous to adults, but the specialized features like peer-to-peer transactions, borrowing, check deposits, cross-border payments and phone support makes it a convenient payment gateway to the younger generations too. Putting aside its digital perks, it is necessary to highlight how the functionality of digital wallets contribute towards sustainability. As the traditional payment methods require the production and distribution of paper bills, receipts and other documents which will shift towards an environment of unnecessary waste and it will also contribute to deforestation as there is a need for continuous supply of paper. The traditional debit cards and credit cards too are often made using non degradable materials, contributing towards plastic pollution. The transition of digital wallets will significantly minimize deforestation and plastic pollution and therefore increase air quality, contributing to the ecosystem.
Cryptocurrency, or crypto is a form of currency that exists digitally. A process called mining is used to generate cryptocurrencies. A specific cryptocurrency has a specific universal value, therefore, there is no need to worry about exchange rates. Lets explore three of these eco-friendly cryptocurrency options and their involvement in changing the game for sustainability. Tezos Tezos Proof-of-Stake consensus mechanism offers a more energy-efficient and cost-effective solution for building sustainable blockchain applications. Chia Chia is a greener, more decentralized blockchain that offers the same security as Bitcoin without the massive energy costs. Algorand Algorand boasts a significantly lower carbon footprint, with annual emissions 7 times less than Ethereum PoS and 300,000 times less than Bitcoin
Contactless payments or tap-to-pay, are proven to be much more convenient and efficient in comparison to the traditional payment methods. Further, contactless payments favors a sustainable ecosystem. Contactless payments reduce the need for physical money. Thus, directly influencing the reduction in paper manufacturing, indirectly reducing deforestation for a greater extent and contributing to a reduction in carbon emissions Contactless payments can enhance brand trust by showcasing a commitment to environmental responsibility
Open banking is the system of allowing access and control of consumer banking and financial accounts through third-party applications i.e. application programming interfaces(APIs) Open banking plays a crucial role in promoting sustainability by reducing paper consumption, enhancing resource efficiency, fostering sustainable financial practices, and increasing access to sustainable finance. By embracing open banking, individuals and businesses can contribute to a more sustainable and environmentally friendly future. It also has a greater influence in combating global warming, CO2 emissions and water pollution to a greater extent. Since the digital era is here to stay, it is vital to opt for technologies that would change the pressing environmental, social and governance dilemmas. Fintech platforms and technologies offer individuals the power to contribute to a greener future with a few simple taps. From the convenience of their homes, users can make sustainable choices and support environmentally friendly initiatives.