When you hear the phrase “going green,” you probably think about a certain angry superhero or a fun, cartoon ogre that lives in a swamp – or maybe that’s just us. But what do you think of the fintech industry? It may be surprising to learn, but fintech has begun to drive a greener economy. In fact, it has become so popular that “Green Fintech” is now a coined phrase for organizations or programs that have an environmentally beneficial influence – think things like initiatives to reduce emissions or ways to increase biodiversity!
But what, exactly, are some actual examples of this in Fintech? Let’s take a look below.
- AI and Data – With the recent boom of AI usage, such as ChatGPT, you may be wondering how AI could have any sort of role in influencing a green economy. Back in 2015, the United Nations established a list of 17 Sustainable Development Goals created as a “blueprint” for “peace and prosperity” heading into the future. The goals emphasized the environment and sustainability. Thanks to the usage of AI and data, however, monitoring the impact of these goals has increasingly become simpler.
With the power of artificial intelligence on our side, we now have the ability to monitor various scenarios in real-time, such as determining whether certain companies have a positive or negative impact on the environment. Data gathered by AI can be used to make decisions and calculate a carbon footprint.
- Blockchain – Over the past several years, blockchain has become a major part of economies across the world. However, “blockchain” and “green” don’t typically go together. When you think of blockchain, your mind likely drifts to the act of crypto mining, which uses thousands of wattages daily. But crypto mining isn’t going anywhere, so it’s time we embrace it!
Several companies are doing just that, as they work to cut down the number of carbon emissions that are released during the mining process. One of the good things about blockchain is its transparency across the market, thus encouraging the use of renewable energy. Because users are able to measure their impact, companies will be able to see their carbon emission data in real-time and work to improve their sustainability.
- Digitization – Perhaps the most obvious of the three, by digitalizing most customer services, many companies have cut out their need for paper entirely. In 2021, the United States consumed about 6 million metric tons of paper and paperboard, an increase of more than three percent from the previous year. However, it was still a major drop in paper consumption from the year 2000, in which 93.4 million metric tons were consumed.
Along with the obvious benefits that come with cutting the usage of paper, digitization also reduces the use of document transportation and couriers. This will likely result in lowered greenhouse gas emissions.
The bottom line? Even if you don’t hear it talked about often, Fintech is heading in the right direction – it’s getting greener! The world of financial technology is here to stay, which means you can either accept it or you can make it like that famous pink starfish that lives under the sea and hides away under a rock. Many companies have (rightfully so!) chosen to embrace the world of Fintech and work to continue making it, and the world, greener for everyone.