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UK fintechs as a force for good

The latest UK FinTech Impact Report 2024, highlights how fintechs are a force for good and contribute positives to the UK economy.



Published by Innovate Finance, Accenture, and Vested Impact, sheds light on how the UK's FinTech sector contributes to economic growth, community development, and sustainability. The report evaluates 3,560 FinTech companies and numerous financial institutions based on their contributions across five categories aligned with the United Nations’ Sustainable Development Goals (SDGs): Productivity, Place, People, Planet, and Peace.


Here are some of the most insightful findings:


With a net positive impact score of 24, the UK FinTech industry outperforms many sectors, including construction and retail, though it falls behind telecommunications and education. The report emphasizes that 90% of UK FinTech companies contribute positively to social and economic goals, demonstrating FinTech’s role in driving inclusivity, financial accessibility, and innovation​


Growth, innovation, and job creation

Nearly all UK FinTechs (98%) contribute positively to productivity, focusing on economic growth and digital infrastructure improvements. FinTechs enable financial inclusion by providing easier access to credit and tools that foster financial resilience among vulnerable populations. Yet, a 37% drop in sector investment in early 2024 raises concerns about the UK’s ability to remain a competitive global FinTech hub​

Local infrastructure and sustainable development

The "Place" impact category shows 14% of FinTechs positively affecting local communities and infrastructure, with only 3% having a negative impact. FinTechs contribute to sustainable urban development by increasing access to affordable financial services and infrastructure, supporting safe and sustainable communities. This focus on local empowerment highlights FinTech’s potential to address social issues directly within communities across the UK​.


Improving financial access and inclusion


About 39% of FinTechs have a positive impact on people by promoting financial inclusion and education, which is offset by a 17% negative impact rate. By providing underserved communities with safer financial options, FinTechs help reduce financial inequality and enhance financial literacy. The report also reveals that while traditional financial institutions have broader influence due to their customer reach, FinTechs tend to offer a deeper, more tailored impact on vulnerable groups, outperforming traditional financial institutions by 7% in this area​


Challenges in sustainability


FinTech's impact on the environment remains an area of concern. Only 10% of UK FinTechs contribute positively to environmental goals, while 73% still have a negative environmental impact, a slight improvement from the previous year. Despite progress, the sector’s contributions to emissions reduction, responsible consumption, and sustainable resource use are insufficient to offset negative impacts. Addressing these environmental challenges requires a more robust focus on sustainability initiatives within the sector, particularly as the demand for greener financial products grows​


The UK FinTech sector’s contributions to productivity, financial inclusion, and community development demonstrate its transformative impact on society. However, challenges remain, especially in sustaining investment momentum and addressing environmental concerns.  We look forward to seeing these addressed. Moving forward, greater collaboration with policymakers and an emphasis on sustainable innovation will be crucial for FinTechs to realize their full potential as drivers of economic and social progress.


 

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