Are Fintechs Exploiting the ‘For Good’ Mantra?

Many fintechs and financial institutions often make big claims that they can enhance support to the previously underserved, positively impact the environment, or improve people’s lives in many other ways. But often, firms fall short of these claims. To conclude our focus on ‘fintech for good’, The Fintech Times explores whether some firms are exploiting the concept.

In September 2024, the Australian Federal Court imposed an AUD12.9million fine on Vanguard Investments Australia, after the investment management firm made for making misleading claims about environmental, social and governance (ESG). 

The firm claimed its funds were screened to exclude bond issuers with activities in the likes of fossil fuels, although the Australian Securities and Investments Commission found that as much as 74 per cent of the securities in the fund (by market value) were not researched or screened against applicable ESG criteria.

Other examples include Robinhood, which claims to democratise investing with commission-free trades, which has received numerous fines related to regulatory and operational lapses – including $65million to the Securities and Exchange Commission, for misleading customers about its business.

Vanguard and Robinhood aside, you don’t have to look too far for other similar examples, and it’s not hard to believe that other firms, investment-related or not, could be guilty of ‘overcooking’ their ethical considerations and commitments. 

“Without metrics or even a definition, ‘positive social impact’ is meaningless; it simply encourages irresponsible businesses to cloak themselves in the fig leaves of DEI and ESG while making no meaningful changes to their operations,” explains Sunny Lu, founder of smart contract platform VeChain.

But how far widespread are these issues? How can we ensure fintechs are as ethical and ‘good’ as they claim to be? To find out, we hear from a number of industry experts.

Measuring success

Mary Beighton, director of people and culture at car finance company Zuto, explains firms need to carefully plan out their efforts to do good, to ensure they meet measurable goals and don’t mislead customers.

“There are many organisations that say they are committed to ‘doing good’, but implementing a meaningful strategy requires a re-evaluation of all aspects of the business – beyond product, growth, and profitability. It requires measurable goals and a clear path towards continual improvement.

“To address social and governance obligations companies need to understand what they can do to make an impact, all while ensuring the business is succeeding and making a profit.

“For Zuto, working within the B Corp framework has allowed us to see exactly where our efforts have moved the dial for our impact initiatives across local communities and the environment, as well as wellness and a sense of belonging internally. B Corp is a rigorous assessment that verifies companies have met high standards of social and environmental performance, transparency, and accountability: there’s absolutely no room for mere box-ticking.”

Backing enhanced transparency

Angela Yore, CEO of fintech PR firm SkyParlour, suggests there’s a role for third parties to play in keeping firms accountable and explains how it guides firms.

“As a specialist fintech PR firm, we recognise that the phrase ‘fintech for good’ risks being overused and, at times, exploited. Many fintechs market themselves as ethical or socially responsible, but without clear standards, these claims can fall short. Some companies have faced scrutiny over issues like data privacy and business practices, which can undermine their ethical image.

“To ensure fintechs live up to their claims, it’s crucial to advocate for third-party certification, independent audits, and transparent impact reporting. Regularly published reports on social and environmental contributions should become standard practice, holding companies accountable for their promises.

“Additionally, fintechs should prioritise strong governance and ethical leadership, ensuring ethical behaviour is embedded at the top. By collaborating with NGOs and other organisations committed to financial literacy and sustainability, fintechs can solidify their positive reputation.

“In our role, we guide fintechs to ensure their messaging is authentic and backed by genuine impact, helping them avoid ‘impact-washing’ and demonstrate real commitment to social good. Ethical communication is not just a trend—it’s a long-term responsibility.”

Fintech for profit?

“Being honest we have to recognise that most fintechs (and other businesses for that matter) pursue a ‘for good’ agenda for predominantly commercial reasons,” adds Alessandro Hatami, managing partner of Pacemakers.io, a consultancy specialising in digital transformation in finance. “Fintechs have an advantage over incumbents in being able to bypass legacy operating models, processes and mindsets that have made the incumbent banks less focused on doing good. 

“For example, fintechs can create new businesses that are moral, inclusive, non-discriminatory as well as profitable. Some examples of fintechs that are doing this include Brazilian bank Nubank which aims to service unbanked consumers, Aspiration in the USA which offers climate-friendly banking, Wise in the EU which offers cheaper international transfers – key for remittances, Monzo in the UK which offers advice on budgeting and saving money. 

“Today we have no real way to be sure that our favourite fintech is as ‘ethical’ and ‘good’ as it claims to be. It would be great if fintechs (and other businesses that claim to do good)  could be reviewed by a reliable ‘auditor’ that would actually score their ethical behaviour making sure that they do no harm to the people and businesses they serve. Like having Food Standard ratings, we should have a ‘Doing Business for Good Rating’. A standardised rating would provide consumers with a reliable source of information when deciding which fintech actually deserves their business.

“Fintech investors, shareholders and boards need to increase their scrutiny of ethical business practices. The media also has to play its role in questioning ‘fintech for good’ claims and requiring hard evidence that fintechs are delivering what they promise.”

A regulatory responsibility 

Peter Wood, CTO of Spectrum Search, also comments: “Much like greenwashing in the environmental space, it can be hard to tell who’s actually driving change and who’s merely hopping on the trend to boost their image. When done right, fintech can transform lives, but if it’s misused, the phrase loses its credibility, leaving consumers sceptical.

“There have been several fintechs that positioned themselves as ethical disruptors but fell short in practice. Some payday lenders, for example, entered the market with promises of fairer terms but were later criticised for charging exorbitant interest rates and preying on vulnerable individuals. Similarly, certain blockchain projects promoting decentralised finance have faced backlash for being opaque or indulging in speculative activities that ultimately harm consumers. These instances highlight a gap between well-intentioned branding and actual execution, often due to a lack of oversight or governance.

“To hold fintechs accountable, they need to be clear in their communication about algorithms, lending terms, and fees. Regulatory bodies must go beyond compliance checks and actively promote positive outcomes, like financial inclusion and responsible lending practices. Independent audits, open data initiatives, and partnerships with community groups can help verify claims and ensure alignment with societal needs. Additionally, consumers play an important role by demanding transparency and questioning whether a company’s actions match its ethical claims.”

Are industry-wide standards the answer?

“In my experience leading a mission-driven fintech, I’ve observed how companies can adopt the language of social impact without implementing the necessary operational structures to deliver it,” explains Dale Pfeifer, CEO at Giving Compass, an online platform guiding donors toward the latest strategies and giving opportunities to create lasting social change.

“True ‘fintech for good’ requires five essential elements:

1. Measurable social impact goals integrated into the business model
2. Transparent impact measurement and verification systems
3. Ethical operational practices including fair AI implementation
4. Public accountability through regular reporting
5. Continuous improvement driven by community feedback

“Without these elements, companies can easily drift into performative social impact while their actual practices may harm vulnerable communities through hidden fees, biased algorithms, or predatory terms.

“The solution lies in industry-wide standards that define and measure ‘fintech for good.’ Companies really need to demonstrate their commitment through board-level accountability for social impact, transparent fee structures, regular independent audits, and community representation in decision-making. Only by holding ourselves to these concrete standards can we ensure that ‘fintech for good’ delivers on its promise of using technology to create genuine positive social change.”

Transparency is key

Sam Taylor, senior business advisor at LLC.org, concludes: “Honestly, based on my professional experience, ‘fintech for good’ mainly serves as a marketing slogan rather than reflecting real dedication to ethical practices. Fintech companies promote financial inclusion objectives yet their high interest rates of 18 per cent along with predatory subscription fees reveal their true operations.

“A fintech that charges hidden fees to low-income users while claiming to assist the underbanked represents a counterproductive approach. The solution requires fintechs to demonstrate their effectiveness by using quantifiable performance indicators.

“To secure public trust fintech companies should focus on transparent operations and delivering measurable results. Releasing comprehensive yearly performance reports that display key metrics such as cost reductions for vulnerable populations or the provision of affordable loans to people helps build genuine credibility. A fintech company can create significant differentiation by dedicating resources to donate five per cent of its profits towards financial education initiatives or by making no-cost services available to 100,000 users. Independent organisations provide audits or certifications to help support these claims through partnership.”