How FinTechs will drive positive social impact around the world

By Zama Ndlovu, Group Head Marketing at Onafriq

As unprecedented geopolitics this year stifles ESG efforts, FinTech companies could be the answer to delivering environmentally sustainable products and services. Not only good for the planet, but something the next generation of wealth holders want from their financial services.

The rapid growth of mobile money and other digital payment forms has transformed the way individuals and businesses of all sizes transact across regions. This has spearheaded the drive towards financial inclusion internationally – ultimately addressing socio-economic challenges.

The conversation around the potential of FinTechs to drive social impact has been expedited. Industries that experience the benefits of online payments have begun perceiving how financial inclusion transforms more than just the way people transact. Ultimately, it has the potential to positively impact other areas of people’s lives too.

Zama shared her thoughts below on how FinTechs can drive positive social impact, the challenges they may face and what to keep in mind to ensure that ‘greater purpose’ forms part of their overall business strategy.

Positive social impact is often only associated with governments or NGOs, organisations which are doing good without the motivation of profit or brand. However, FinTechs are often uniquely positioned to solve social issues through providing access to services, improved user experience and education.

Using various FinTech products, consumers can gain a better understanding of their financial situation. Products like savings pots, investment platforms and as well access to loans can all lead to financial freedom for those without it.

In developing countries, FinTechs are particularly responsible for social impact as there are often wider gaps to fill. Many communities are underbanked, which limits their access to other formal financial services such as savings, insurance and formal loans, ultimately limiting them to expensive informal products if that. Additionally, in some markets, policymakers are prioritising digitisation of payments to ease the implementation of a number of their policy objectives such as financial surveillance and lowering the cost of printing money. FinTechs can provide e-money products and facilitate digital transactions more cheaply than traditional players because of their leaner operating models.

Although not all companies will prioritise people over product or profit, in 2025, the world’s leading FinTech companies will play a vital role in solving key societal issues and increasing global financial inclusion.

FinTechs have the power to do good, but for a company to label itself ‘for good, this must be a key business priority. For many companies, social responsibility can feel like a ‘tick-box’ exercise to improve public perception. However, in a truly socially responsible fintech, the drive to improve lives and solve real-world problems is at the core of its business model, playing a role in every aspect of decision-making.

From planning and product design to branding and strategy, every part of a socially responsible FinTech’s strategy should be driven by its overall mission to solve a meaningful problem for individuals and businesses.

At some stages, this will require tough decisions. For example, if a company wants to reach individuals in underserved or rural communities, it must offer affordable and user-friendly products to facilitate financial inclusion. Although this may initially make a dent in profits as the products are cheaper, in the long run, the company will have a better social impact and will be suitable for a greater number of consumers.

FinTech leaders who are determined to do good must consistently focus on bringing the right people along on their journey. They can do this by highlighting the long-term benefits of creating ethical products with social impact, fostering financial inclusion and sustained awareness.

Creating socially responsible products can be challenging, as different stakeholders often have their priorities and prejudices which shape their personal goals, but when everyone is truly brought in on the common mission, finding each other in decision-making is easier.

Nevertheless, when it comes to dealing with investors and board members, FinTech leaders must balance their social impact ambitions with profitability, useability and affordability to essentially ensure that their products can survive in a competitive market.