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Catalysing Fintech for Sustainability: Lessons from multi-sector innovation

October 2017 – This report presents recommendations on how to design collaboration between multinationals, financial institutions and start-ups in order to better harness fintech to help solve sustainability challenges in the real economy.

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Fintech ReportAbout the report

A major turning point may be within reach of leaders trying to evolve, for the better, the relationship between business and society. Specifically, there is a rising awareness about the potential for technology-driven innovation in finance (‘fintech’) to be harnessed to support sustainable development. If done well, this could be transformative.

This report is the output of the Fintech Taskforce (‘the Taskforce’), which was convened by the Banking Environment Initiative (BEI) in March 2017 for a six-month term. Its purpose is to share the Taskforce’s recommendations on how to design collaboration between multinationals, financial institutions and start-ups such that we better harness fintech to help solve sustainability challenges in the real economy. These recommendations represent insights gathered from an intense period of collaboration between representatives of these different communities. The findings are certainly relevant to these sectors specifically, but also to others such as governments, entrepreneurs and philanthropists who may have an interest in putting them into practice.

The Taskforce was created at a Chief Executive summit convened by HRH The Prince of Wales in early 2017. Its mandate was to address the practical dynamic of how to design better multi-sector collaboration to innovate fintech solutions for sustainability. The Taskforce agreed that its work could be judged a success if its recommendations led to: “interested parties having a space where together they can create, raise awareness of, and implement industry-level fintech solutions targeted at specific sustainability-related business issues”.

Findings

The Taskforce concluded that meaningful opportunities to harness fintech to help solve sustainability challenges in the real economy are being overlooked because multi-sector innovation does not happen easily on its own. ‘Fintech for Sustainability’ catalysts should therefore be established to trigger targeted, collaborative innovation between multinationals, financial institutions and start-ups. Every catalyst would support a portfolio of innovation projects, each focused on a specific challenge. Each round of innovation would be anchored by at least one organisation with the commercial motivation, and the ability, to implement the solution at scale and each would specifically aim to help more capital to become available to deliver at least one UN Sustainable Development Goal (SDG). Taking the time to design for industry-wide scale would be paramount.

Such catalysts would need to be located to benefit from physical access to as wide as possible a selection of multinationals, financial institutions and start-ups and would use well-established innovation practices to deliver professional governance, including of competitive boundaries and IP. Success would be measured by the delivery of commercially viable solutions, and an independent party, which has sufficient expertise in fintech, finance and sustainable development, would need to be awarded the mandate to structure the innovation process.

Realising the opportunities within reach will require new effort both from the current Taskforce members and many others around the world. The recommendations of the Taskforce could be delivered within existing collaborative structures, lead to the establishment of new structures, or a combination of both. The promise of both commercial and societal reward should provide the necessary motivation to all involved to put these design principles into practice.

Citing this report

Please refer to this report as University of Cambridge Institute for Sustainability Leadership (CISL). (2017, October). Catalysing Fintech for Sustainability: Lessons from multi-sector innovation. Cambridge, UK: Cambridge Institute for Sustainability Leadership.

Published: November 2017

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Author and acknowledgments

The authors of this report were Thomas Verhagen and Andrew Voysey (CISL). The report is based on work taken on by the Fintech Taskforce of the BEI. 

Disclaimer

The opinions expressed here are those of the authors and do not represent an official position of CISL, the wider University of Cambridge, or clients.