The financial technology (fintech) industry seems to strike investors’ goldilocks dream of doing exceptionally well while creating exceptional good. Based on the promise of positive social impact through financial inclusion, fintech has seen meteoric growth while also capturing more impact-related investment funds than any other industry.
How Fintech Can Deliver on Its Social Impact Promises
Digital financial companies are making big claims about financial inclusion — but are failing to disclose data that backs up their efforts.
July 15, 2022
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Summary.
FinTech companies are seeing enormous investor interest on the back of promises of providing services to the financially underserved — a clear example of social enterprise that can do well by doing good. Yet while the industry has increasingly become synonymous with impact potential, fintech companies and investors have little insight into whether the industry is actually living up to its grand promises. Without more rigorous approaches to identifying and measuring impact, investors will continue to guess at the impact these companies. The authors provide several pieces of advice for how FinTech can better disclose their social impacts.