How The Fintech Sector Can Make A Sustainable Difference And How Wallex Is Doing Our Part

Conversations around sustainability are gaining traction as more people feel the effects of climate change – an important topic that needs greater awareness and discussion as its effects begin to intensify and be felt by millions.  

Singapore Fintech Festival 2023 has taken a significant step in championing the change we need to see in the sustainability journey towards Net Zero by being the “first SFF to be powered by renewable energy entirely from the Festival venue at Singapore Expo”.

How Can Fintech and Sustainability Go Hand-In-Hand?

Beyond SFF 2023 and beyond, a collective effort is needed on the part of every individual and sector, fintechs included. Today, fintechs are well-positioned to be a positive force for change, contributing to greater awareness of climate initiatives and promoting more eco-friendly practices. Let’s look at some ways our industry can make a positive impact.

Drive financial inclusivity and literacy

We don’t often think of financial literacy and inclusivity as contributors to sustainable development but they are certainly capable of empowering communities by establishing infrastructure and helping them access work and improve economic growth, all of which are identified as sustainable development goals (SDGs) by the United Nations.  

Fintechs can help increase financial inclusion by providing innovative products and services that are accessible to more people. Wallex is already doing this by helping businesses in Indonesia perform cross-border transactions online instead of doing them at banks. This allows them to cut down on their carbon emissions in constant travelling between the office and bank, and also reduces the paper waste generated with each physical transaction.  

Being specialists in both finance and technology means fintechs are in a strong position to improve financial literacy worldwide, in both urban and rural communities too. By developing apps, platforms, and collaborating with non-profits, fintechs can educate individuals about how they can better access and manage their finances, paving the way to a more inclusive financial ecosystem that welcomes everyone.

Make it easier for sustainable products and services to access financing

As individuals and businesses become more conscious of their responsibility to contribute to sustainable development, they will seek out ways in which they can take action and make a tangible difference.  

Fintechs can step up by making financing easier for organisations or businesses actively building solutions or running programmes that address pressing climate challenges. One way of doing so is by committing a percentage of their revenue to charity, or to a non-profit cause of their choosing.

Another way fintechs can step up is by developing new financial instruments and marketplaces, such as facilitating the issuance of green bonds and climate-related financial instruments. Fintechs can also help to develop new carbon markets, which can provide an important tool for reducing emissions.

Promote responsible investing practices

Fintech firms have a wealth of data and analytics tools at their disposal and these can be very useful in providing comprehensive insights into ESG (Environmental, Social, and Governance) factors. This includes tracking the carbon footprints of companies and assessing their exposure to climate-related risks.  

To make responsible investing more accessible, the industry can look towards the usage of robo-advisory services as a launchpad to encourage more individuals to take action. Building sustainability-focused robo-advisors that focus on businesses who meet ESG best practices and criteria is one way of doing this.

Streamlining compliance with regtech solutions

Sustainable finance, otherwise known as green finance, has witnessed a surge in interest in recent times, driven by a growing understanding among businesses and investors about the significance of marrying financial goals with ESG objectives.  

Branching out into this niche, however, may prove to be a considerable challenge – considering how new the field is. Understanding the sustainability criteria can also be a task in itself, much less meeting them.

Regulatory technology (regtech) solutions offer a solution. Fintechs are in a position to help businesses to become more compliant with green finance criteria by contributing to the development of regtech solutions, and empower them to deliver more sustainable financial products.

Simplify cross-border remittances

Plenty of individuals and communities on our planet have limited or no access to financial services and cannot be part of the wider economic system. Simplifying cross-border remittances can help to bridge this gap by allowing them to open a bank account, developing a credit score, or gaining access to capital to start a small business.

For example, harnessing blockchain technologies to develop digital identities that streamline bank account opening and KYC checks. By breaking barriers to financial platforms, businesses and overseas workers can move money across borders home more seamlessly and cost-effectively, enabling rural economies to better tap on opportunities within the global marketplace.

🔑  Read More: Remittances 101: Understanding How Money Moves Across Borders

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Driving change is a collaborative process

The rise of sustainable fintech initiatives is a clear indication of the growing interest in ethical investments. Innovative fintech companies and platforms that prioritise sustainability and ESG principles can have a significant impact not just within the financial sector, but far beyond it.  

Collaboration between fintech companies, financial institutions, and regulators is key to creating a sustainable fintech ecosystem. Sharing knowledge, resources and best practices can drive positive change in the industry and address environmental and climate challenges.

Wallex understands this and is committed to playing our part for a more sustainable future by adopting a multi-faceted approach, working alongside M-DAQ Group to be a LowCarbonSG participant. We’ve embarked on a number initiatives, including beach clean ups and volunteer work to prepare and deliver food to the less-fortunate.

On the social front of ESG, we've also made significant efforts to create and maintain a diverse workplace. With M-DAQ, we've built a multi-cultural workforce that has nearly 20 different nationalities. The biggest driver for this is our belief that diversity is a source of strength.  

However, attaining a more sustainable future is a journey and not a destination. We’ve pledged to achieve net zero emissions by 2023 as part of our sustainability strategy, and hope to motivate our peers to take action on climate change.