Financial Inclusion | July 10, 2019

The rise of impact-focused fintech

Amy Cortese
ImpactAlpha Editor

Amy Cortese

ImpactAlpha, July 10 – The mashup of finance and tech known as ‘fintech’ shows no signs of cooling: VC-backed fintech companies raised $39.57 billion across 1,707 deals globally last year, a 15% increase over 2017, according to CB Insights.

Among the top trends for 2019: The rise of “impact fintech.” The market research firm highlights growing demand for ESG and impact investing in its “2019 FinTech Trends To Watch.” Among the insights:

  • Impact inflows. ESG and impact investing are gaining recognition for their ability to generate alpha. Market volatility could drive more inflows into impact.
  • Wealth transfer. Platforms are emerging to cash in on the $30 trillion generational wealth transfer to sustainability-minded Millennials. Early movers include online banks such as Aspiration and Newday, investing platforms such as Motif, OpenInvest and Swell, and lending products like CNote.
  • Retail revolution. Investment platforms are emerging to democratize access to alternative assets for retail investors, including brokerages like Robinhood and Coinbase, platforms like PeerStreet and Fundrise, and marketplaces like Crowdcube and Equitise. One roadblock: Sustainable investing competitors are struggling to differentiate themselves – and to attract customers.

Retail platforms for sustainable investing struggle to differentiate themselves – and to attract customers