The Green Digital Finance Alliance and the Swiss Green Fintech Network, with support from the Swiss State Secretariat for International Finance (SIF), launch the final version of the world’s first green fintech classification. After having collected industry feedback on the first version of the report, formerly entitled ‘A Green Fintech Taxonomy and Data Landscaping’, the final version has been re-named to ‘Green Fintech Classification’. The role of the Green Fintech Classification is to be a tool to further mature and stimulate the green fintech market via enabling a harmonised approach for policy makers, investors, and market actors to analyse and segment green fintech markets. It shall also further mature the understanding of green fintech markets and thereby stimulate more innovation and adoption.
The time is right for the introduction of a green fintech classification, given how much the past year’s fintech market evolution has been marked by a new wave of fintech solutions with a green intent. In the initial years of fintech, there were many categories, such as digital lending and digital payment solutions. These categories mostly mirrored the established financial product segment, but were recast digitally. The second wave of fintech market innovation was defined by the use of new data sets, underlying infrastructure and entirely new digital financial products.
This landscape has evolved to include new types and applications that can be referred to as the third wave of fintech market growth. Fintech solutions that align financial systems and behaviours of their protagonists with green goals are the third wave. These solutions allow for new, more advanced green finance and align existing financial and capital flows better with green goals. Given this latest wave in fintech’s market evolution, an updated taxonomy is in order. This report identifies green fintechs and will continue to evolve.
This publication establishes for the first time seven green fintech categories.
- Digital payment solutions and green account solutions
- Green digital investment solutions
- Digital ESG-data and –analytics Solutions
- Green digital crowdfunding platforms and syndication portals
- Insure-tech and green digital risk analysis
- Green digital deposit and lending solutions
- Green digital asset solutions
- Green regtech solutions
This report also maps the main databases used by each type of green fintech. This database mapping gives an overview of data that, if made available, could help to drive green fintech innovation. Many green fintech innovations have been made possible by open-source datasets such as open-source Earth observation data from Copernicus and NOAA databases. Additionally, green fintechs heavily leverage the proprietary company databases managed and maintained by ESG data vendors. This can often be combined with web scrapping. IoT-generated, dynamic assets level data is one category that is least utilized. However, structuring IoT and data in infrastructures such as national or regional data hubs holds the potential to accelerate green fintech innovations across the Green Fintech Classification’s categories.