We often think about the ‘upside’ of social impact data—how it can show that an investment is doing more than a typical investment, because it generates both financial and social return.
But what about social impact data as a way to protect financial value?
This is the unique opportunity that presents itself today in fintech, an industry that is growing exponentially and that has huge potential for creating social value, but also potential to make things worse for vulnerable populations.
I wrote a piece for the Fintech Times on just this topic. Here’s the opening, click here to see the whole thing.
The global fintech market was described in a recent HBR article as investors’ “Goldilocks dream”. This is thanks to its promise of big investor returns and positive social impact. In 2021 a total of 113 new fintech “unicorns” were created. They had the potential of bringing the world’s 1.4 billion unbanked customers into the financial mainstream.
However, while financial access is increasing at a blistering pace worldwide – in Kenya 82.9 per cent of the population had access to high-quality financial services in 2019, up from 26.7 per cent in 2006 – access to digital financial products is neutral from a social impact perspective. Some products have a significant positive impact on customers’ lives. Others though, simply meet an immediate need (to make a purchase or pay off a debt). This results in people being left worse off.
