Why fintechs have a duty to ensure positive social impact

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 oftentimes 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 such as 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. Also, some policymakers are prioritising digitisation of payments to ease the implementation of their 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. What truly sets a 'fintech for good' company apart from the rest? Fintechs have the power to do good, but for a company to label itself 'for good, this must be a key business priority. Solve problems 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 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 stage, this will require tough decisions. For example, if a company wants to reach individuals in underserved or unserved 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 better social impact and will be suitable for a greater number of consumers. On the other hand, the company must make decisions it can afford today because if it doesn't consider profitability at all, it' not be sustainable in the long run. 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 own 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. The writer is the group head of corporate communications and marketing at Onafriq

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