ICYMI: Understanding how Open Finance impacts sustainable development
With this in mind, I was grateful to attend the joint Experience Club and United Nations Global Compact event in Manhattan last month. I had the opportunity to join a panel to discuss the intersection of Open Finance and sustainability and partake in several insightful conversations on the impact Open Finance has on our sustainability and inclusivity goals.
GFT Open Finance solutions for sustainable infrastructures
Organizations that commit to sustainability and carbon reduction need first to consider their infrastructures and the ability for their daily operations to affect their environments. GFT isn’t a stranger to this process and believes this initiative requires a complete team effort.
An example of this is our internal hackathons, which the Americas region of GFT often promotes. These events offer a chance for fun collaboration and the creation of exciting projects. During one particular hackathon, most of our programmers focused on projects to provide better solutions for urban issues, such as how to increase the amount of garbage that residents recycle. The winning project, named “Suschainable,” was an app supported by blockchain and gamification. This application acts as a liaison for the recycling chain, connecting consumers, logistics, recycling plants, government offices and non-governmental organizations (NGOs) to promote the recycling of more viable materials.
Financial inclusion empowerment via Open Finance
Open Finance, pushed by Open Banking, has been promoted worldwide as a financial inclusion tool. Brazil's central bank, Banco Central do Brazil, uses the term “reduce the asymmetry of the system,” which provides equal conditions for banks to compete while promoting democratized access to all levels of financial products and services.
Though this hackathon focused on solutions for urban communities, we also have global experience in utilizing Open Finance to promote financial inclusion and sustainability. In Brazil, thanks to technology that supports Open Banking, it was possible for the government to establish an emergency funding program during the pandemic. The program enabled millions of users to access government funds through a completely digital account.
Digital access to financial accounts not only decreases the need for bank commutes and energy consumption, but also promotes financial inclusion. In India, Open Banking and instant payments give more than a billion people access to affordable banking services by reducing fees to make instant payments. Markets in the U.S. and Canada are likely to witness the same effect as instant payment systems continue their rise in popularity. Currently, there’s a significant inequality in access to proper banking services. According to the 2021 Federal Deposit Insurance Corporation (FDIC) National Survey of Unbanked and Underbanked Households, 5.9 million American households are unbanked, and reported that no household members owned a checking or savings account at a bank or credit union. This needs to change.
How Open Finance can reduce corruption
Open Finance offers tools to improve financial inclusion, so it’s helpful to also consider the possibility of corruption and how it’s affected sustainability and inclusion in the past. An indirect effect from the rise of money circulating digitally is that it decreases the amount of bricks-and-mortar currency exchanges. This shift increases the level of traceability, monitoring and fraud detection for money transfers, ultimately decreasing the systemic risk of corruption.
How Open Finance influences responsible consumption
The UN Global Compact has 17 sustainable development goals (SDGs) that the UN promotes in order to raise awareness about specific areas in which both individuals and organizations can consider improving our society. SDG 12 ensures sustainable consumption and production patterns. As Open Finance encourages financial inclusion, this solution absolutely has the power to affect consumption and general consumer habits.
One of the main benefits of Open Finance is expanding the customer value chain, which we named the “Life Moment”. A financial moment is a minor part of the customer’s life moment. It’s a method to enable a purchase or exchange, but it’s not the end of the consumer’s action. However, when the customer value chain is enriched with data, it becomes more valuable than just a transaction in an operation. It can help the customer to make the best financial decision based on intelligent algorithms. It can also provide a better service as a whole when all the parts are seamlessly connected: the merchant, bank, credit card, fintech, etc.
When consumers experience this process, they can enjoy the freedom and security of Open Finance and use their financial data to recognize spending patterns and priorities. As a result, consumers can enjoy more options when it comes to completing a transaction. This freedom can open opportunities for consumers that they may not otherwise have, ultimately allowing them the choice to prioritize goals, such as only interacting with organizations that share their sustainability goals.
GFT’s carbon-reduction mission
What’s important to our clients and partners is important to us—and following sustainable practices is in everyone’s best interest. We are committed to reducing our carbon footprint by 50% from 2020 to 2030.
As a technology and services company, we help our clients become more energy efficient through the solutions we deliver. Our work in the manufacturing industry to transform energy through digital strategy, has resulted in projects and processes that take into account carbon reduction. We leverage our team’s creativity and passion to create solutions that can reshape operational approaches.
One of the best examples of this type of solution is our offering, GreenCoding. We use GreenCoding in projects both for internal purposes and external goals. GreenCoding is based on three pillars:
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Logic: Every decision matters in a developer’s experience. We approach programming with a zero-waste mindset to develop more efficient software.
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Methodology: With rapid feedback and reusable output, our developers analyze metrics to consider the environmental impact of each development decision. This agile and lean method can make it more efficient to adapt software.
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Platform: For optimum energy efficiency, the infrastructure that code runs on, is as important as the code itself. This is why we study how cloud infrastructures and technologies like machine learning (ML) can positively impact the environment.
Want to learn more?
As a company with a global presence, we understand how important it is that we commit to sustainability and carbon reduction goals. If you’d like to learn more about our practices, visit our Sustainability page.
