The way personal financial management tools are built and used can have a big impact on the planet
Dolphins exploring the Bosphorus strait in Istanbul. Pollution and noise levels falling sharply in Paris. New Delhi experiencing its longest spell of clean air on record. Over the past few months, the Covid-19 lockdown has had some curious and unexpected consequences. While humans stayed indoors, nature has thrived. Those images have prompted many of us to be more mindful of the way we live and to try and find ways to reduce our carbon footprint.
Over the last year, tech giants like Amazon and Microsoft have stated their purpose of becoming carbon-negative or carbon-neutral. This goal might seem difficult to achieve for smaller firms, but there are a few things every software company can do to reduce their carbon footprint. In this post, we will focus on how FinTech software firms can develop more eco-friendly platforms, and how personal financial management (PFM) solutions can empower people to live a more conscious, sustainable life.
Developing a sustainable PFM
While most professionals within the FinTech space aren’t traveling, burning fuel, or delivering packages all the time, the way software is developed can have a massive impact on the planet. Digital pollution may not be as visible as Beijing’s smog, but its consequences are just as real.
The first thing FinTech companies should do is make sure that they work with eco-friendly server providers. Many software companies won’t list the environmental impact of a website or platform as a priority when selecting a hosting provider. Big mistake. By using a sustainable hosting platform, a personal finance management tool can be carbon-reducing.
Another good idea is moving to the cloud. Signing up with a cloud-based server provider is not only cheaper than having an in-house infrastructure, but it also reduces energy consumption and waste, lowering the company’s carbon footprint. For instance, Oracle Cloud data centers deliver a sustainable computing platform that is efficient, renewable, and aligned with the circular economy.
Focusing on accessible, inclusive design should also become a priority. On how digital designers can reduce carbon footprint, UX researcher Vaida Pakulyte and Strands’ Lead Product Designer Guillem Espias agree: “Inclusive design is at the core of sustainable design, simply because it makes our solutions more universal, and as a consequence, more efficient. Making things easier for 10 people saves more time and energy than doing it only for 7.”
Providing a smooth customer journey delivers cost-effective energy savings. After all, customers will face fewer barriers and will be able to get things done swiftly. Other eco-friendly ideas include allowing a dark theme, setting a shorter duration for an active display, or developing software features that allow users to automate tasks and prevent avoidable extra energy expenditures.
By keeping the environment in mind while building PFM tools, developers can integrate features that will not only allow customers to make the most of their money but aligning their spending power to their values.
Let’s take a look at some of the ways PFM can empower banking customers to take action and offset their carbon footprint.
Taking control of our money and our impact on the environment
Values are our compass in life. They remind us what’s important, inform our words and actions, and govern how we behave. In other words, a value system allows us to prioritize where we spend our time and money and provide us with clarity and awareness when making decisions.
PFM platforms allow us to get a full, categorized view of what we do with our money. As such, they are a great resource to make sure that we’re supporting the right businesses and spending in a sustainable way. There are many PFM systems available in the market, and most retail banks provide their customers with a free online banking app.
Identifying where our money goes is a major step towards a conscious life. This also means taking into account where our investments lie. At the end of the day, aligning the way we spend money with our ideas is not only incredibly rewarding, but it makes it easier to take ownership of our money, manage it more effectively, and reach our financial goals. Think of spending power as like voting, a way we can make our voices heard.
Thanks to Open Banking, individuals can choose to give banks and third-party companies access to their data. This is a total game-changer and can turn a PFM into a hub for good. For example, PFM users can connect their banking platform to third-party apps that allow them to round up every purchase to the nearest whole number and invest their spare change in sustainable companies. Or they can set a fund and donate to causes that resonate with them.
Lastly, there’s a number of carbon footprint calculators available. By connecting them to a PFM platform, it’s easier than ever to work out how much carbon our various actions emit and get tips on out how to reduce it.
There is a growing market need for tools that enable a sustainable lifestyle, which has resulted in a thriving entrepreneurial ecosystem, with startups such as Doconomy, Aspiration or NetZero working on eco-friendly FinTech solutions.
“PFM can be used to educate users on responsible consumption and empower them with tools not only to track their carbon footprint but also to have an impact on a personal level by helping them to reach carbon neutrality,” Strands’ Guillem Espias says. “We also have to consider that this is a fast-growing trend and consumers are becoming more and more conscious about it. Besides, the technology is already here,” he points out.
Do you work in a financial institution and want to empower your customers to take control of their finances? If you are interested in finding out how Strands can help your bank, or if you would like to get a Free Demo of our AI-powered Financial Management solutions, please fill out this form and one of our Sales Reps will get back to you as soon as possible.