The third edition of Global Fintech Fest held on Sep 20th-22nd, 2022 focused on the key factors of sustainable finance methods and the role of fintech companies in accelerating financial sustainability. Financial decision-making that focuses on the environmental, social, and governance (ESG) aspects of society in order to maintain financial security for coming generations without harming the earth and its climate is sustainable finance.
The fintech market has shown tremendous growth over the last few years. In fact, the Indian fintech market has achieved the third position in the world. The market is at a place where it is very much responsible for the growth of Indian GDP and financial technology simultaneously. The companies did increase independence, convenience, and innovations for customers in the financial sector which encouraged them to include ESG factors in the sector.
There are few targets that the sector wants the fintech to follow in accordance with ESG,
As for the planet, the ambition is to bring sustainable growth to the table by investing in companies that center on the need to build environmentally sustainable projects. Such companies have a heart for reducing carbon footprints or encouraging renewable energy. Giving financial access to these types of companies will offer a great deal to the planet and living organisms.
By investing in companies that cater to provide equal opportunities to people in the health, education, and employment sectors, fintech can make a great impact on the sustainability of social aspects. The idea is to abolish poverty by inspiring investors to increase interest in equal opportunities for the people.
There is a need to hearten better governance for employees by including them in geed company agendas. There is a necessity to include investors with the ideas of companies that show interest in the prosperity of their employees so that everyone can enjoy good financial health and financial inclusion.
Role of financial technology
The proposal is to create a new world that is inclusive of not only climate change but of financial health and financial inclusion also. Financial inclusion is a state where individuals and businesses share equal and appropriate opportunities to access financial services while financial health is the ability of an individual to create a healthy financial environment for oneself, including control of finances, secure finance, freedom of finance, and financial resilience.
Fintechs need to participate in the innovations that help people of every class or genre to be a part of all accessible and affordable financial opportunities and services such as bank accounts, loans, savings, insurance, etc. The requirement for technological advancements, and digital transactions is one of the key takeaways that have made financial inclusion more convenient and faster. For example, UPI in India has reached a remarkable height of 6.57 billion transactions in the month of August 2022 whereas the economy of India has climbed up to the fifth rank leaving the UK behind with the continuous use of digital or Aadhaar-enabled transactions.
Other innovations like prepaid cards are continuously serving small to large businesses in saving and managing their funds. Prepaid cards allow individuals and businesses to acquire a savings account out of the bank, regardless of their position in society. The cards have helped various classes of people to feel inclusive in the financial sector by giving them the freedom to use their personal cards for every purchase or feel safe through government benefit cards.
Another aspect of inclusive finance is the rise of crowdfunding and peer-to-peer or social lending for rising businesses. P2P lending has helped many companies with low financial history or credit records in collecting the funds to increase their business. There is a dire requirement to invest in companies with creative goals to conquer but lack the capital to make it possible, and then it becomes the duty of fintech to cater to their services.
Moreover, financial inclusion built confidence in the people by making firm financial security for them in the health and education sectors. The population among the low-income groups and middle class from urban to rural areas can benefit from the facilities given by fintech companies, this makes financial inclusion more flexible.
Financial Inclusion in India
Recently, RBI announced the financial inclusion index of 2022, which stated an increment to 56.4 from 53.9 in 2021. The RBI index measures the accessibility, affordability, and availability of financial services and goods to the unbanked population of the country. It generally tracks access, usage, and equality of counted indicators which covers banking, investments, insurance, postal and pension sectors, with the index ranging from 0-100.
The point is to make the available and accessible services usable by the population equally regardless of the status of individuals in society. As the report suggested the accessibility index was at 73.3 but the usage and equality indices pull down the entire index result. The need to provide innovative services that would cater to the proper usage of services given by the government or other organizations is the critical issue that fintech companies are trying to work out.
Financial Inclusion by BankIT
BankIT through its various services came up with solutions for the financial inclusion of rural populations through digitalization,
- A Domestic Money transfer service that helps people to transfer money to any bank account in India without visiting any bank.
- Aadhaar enabled payment system works with a small hand-sized device that is used to withdraw money from anywhere.
- A utility bill service to pay for multiple bills including electricity, water, gas, FASTag, broadband, etc. anytime and anywhere.
- BankIT’s prepaid card service for everyone helps people with a wide variety of cards.
- Customized and personalized card services for the business to grow.
- LIC premium payment service and Credit card bill payment services with easy and faster access.
- IRCTC travel agent and Travel & Stay service for assured and cost-effective tickets and bookings.
- A 24*7 customer service for the queries of App and web portal users.