Just one in 10 FinTechs in the UK are having a positive impact on key issues such as climate change, responsible consumption, water usage, and land management, according to a new report from Innovate Finance and Vested Impact.

The research, produced in partnership with Accenture, found that while the proportion of FinTechs negatively impacting the planet has decreased from the 86 per cent recorded in the previous report to 73 per cent this year, the overall negative impact has increased.

Innovate Finance, the independent industry body for UK FinTech, says that positive contributions from firms in the sector are currently not enough to offset the growing negative effects on emissions.

“UK FinTech has been empowering industry and society with research, development and innovation, and this report helps to quantify the sector’s transformative role in the UK year-over-year, while highlighting the need for greener practices," said Jon Williams, global financial services sustainability lead, Accenture. "As a first of its kind in the FinTech community, we hope that it accelerates the drive towards adopting sustainability principles in the design and the implementation of new technology systems.”

The study, which analysed over 3,500 companies in the industry, did however find that 98 per cent of UK Fintechs are having a "significant" positive impact on productivity.

It found that FinTechs are driving productivity and digital infrastructure, increasing access to finance and financial resilience of the vulnerable.

There was however a drop in investment by 37 per cent in the first half of 2024 from the previous period.

Economic secretary Tulip Siddiq said: "The UK FinTech sector is a powerful engine for economic growth. I want to work with the sector to unleash its potential – driving innovation, boosting investment and supporting financial inclusion.”

The research also revealed that 39 per cent of firms are helping to reduce inequality by increasing financial inclusion and promoting financial education.

A further 26 per cent are positively contributing to the protection of fundamental freedoms around data privacy and access to information, the report says.

"Thanks to the inherent innovation in our industry and the remarkable efforts of our FinTech leaders, we are well equipped to face our biggest societal challenges," said Janine Hirt, chief executive of Innovate Finance. "It’s essential for industry, government, and regulators to collaborate in supporting our leading FinTech community, driving even more positive impact and paving the way for the next wave of productivity and growth in the sector.”

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