What makes a fintech company a ‘fintech for good’?

Can fintech really be a force for good? Whether its blockchain, cryptocurrency or even simply advances in online banking, financial services and technology have become irreversibly linked. Fintech companies have brought much-needed disruption to the financial world, redefining banking and financial services, but this rapid disruption has also led to many financial organisations feeling the need to play catch-up, putting innovation and profit above the needs of the end user.

Fintech companies are of course playing a powerful role within the financial services sector, advancing financial equality globally, facilitating easier cross-border payments, and allowing start-ups access to the same crucial accounting technologies as multinationals’ finance departments. But their inherent connection to technology and the risk of individuals being left behind in the rapid march towards digitisation has caused some to reflect on what attributes fintech companies need to keep in mind if fintechs are ever to be considered truly ‘good’.

The Financial Times asked whose responsibility it was to ensure those excluded by financial services’ rapidly advancing focus on digitisation don’t get left behind. As financial services and technology become ever more ready bedfellows, rapid advancement without adequate safeguarding is a concern. It is certainly the case that today’s digital services don’t work for everyone, with those without ready access to digital tools facing financial exclusion.

Thankfully, building pressure from investors is pushing many fintech companies to focus on sustainable, tangible outcomes, rather than short-term raw profit. But what makes a fintech a ‘fintech for good’? Rather than blindly striving to solve a problem at all costs, fintechs should look inwards and analyse what it is they’re hoping to achieve, asking who their new innovations are hoping to benefit, and putting purpose alongside profit as key orientation principles for their business.

Nkosi Moyo, head of global payments and mobile sales at Crown Agents Bank (CAB), spoke to the Fintech Times about what being a ‘fintech for good’ actually means, commenting: “Fintech, at its core, is technology which enhances financial services. It facilitates opportunities for innovation and creates new channels to deliver financial services and products. However, fintech for good is about harnessing the power of this technology to provide end-users, partners and other stakeholders with sustainable and truly transformative services that address key challenges within the financial landscape, such as financial inclusion.

“What sets a ‘fintech for good’ company apart from the rest is not just an intent to actively and sustainably address the biggest challenges in finance, but the ability to demonstrate positive impact. Plenty of fintechs purport to be ‘good’ but only a few can provide real-world examples of that good in action.”

Ultimately, fintech companies must not lose sight of the basics. They should reflect on the purpose of their business, the problems they are trying to solve, and the incentive their technological advancements offer to the end-user and wider financial market as a whole. Fintech can certainly be a force for good, they just need to keep an eye on the bigger picture.

At CAB, we work with some of the world’s most vibrant and exciting financial technology companies, believing in the power of payments technology to connect the world. Embodying the ethos of a ‘fintech for good’ organisation through partnerships with humanitarian and international development organisations. Our solutions have been specifically developed to support multilateral, government and non-governmental organisations in some of the world’s most challenging environments, including delivering FX and payments to and from hard-to-reach regions such as those suffering the effects of war, disease or natural disasters.

As a UK-regulated provider of wholesale foreign exchange and payments services, we’ve been supporting clients around the world for nearly 200 years. To hear more about how we’ve striving to improve the payments sector through our FX and cross-border payments efforts, please get in touch.