Finextra Research: Latest fintech news, analysis, interviews, features and opinion by industry experts

Report

Fintech, ESG and IFCs: Embedding Sustainable Business Models

A Finextra Research Impact Study in association with Jersey Finance. While the landscape for financial services is currently being re-shaped by the twin trends of digital technology and the rapid rise of sustainable finance, leading international finance centres (IFCs), always nimble and adaptable, are seizing on the opportunities. Close analysis of these trends highlights an even more significant intersection at play with both these mega trends converging symbiotically, leading to fintech playing a part in the scaling up of sustainable finance, while the latter in turn accelerates innovation in fintech. Adoption of AI is improving the ability of financial service providers in leading jurisdictions, such as Jersey, to meet compliance needs, while also driving down process costs that might act as a barrier to sustainable finance. Equally, the growth in sustainable finance leads to greater demands for fintech solutions, adapted to the specific needs of IFCs. Evidence of these major trends and their impact on IFCs are included in the findings of this latest Finextra report, a study which Jersey Finance is pleased to support. As an IFC facilitating cross-border investment through our expertise in areas such as fund governance, fiduciary and administration for private wealth, we are focussed on enhancing our capabilities in the digital space, while sustainability is already integrated into our core offering. Furthermore, this symbiotic convergence is becoming a notable factor in firms’ service delivery within Jersey’s financial ecosystem. Firms such as Apex and IQEQ are tailoring their fund solutions to include new data-driven propositions, developing new tools that deploy the latest technologies to collect, evaluate and report ESG data. Sustainable finance solutions like this are seeing strong take-up by managers, keen to meet both the growing investor demands for transparency on the impact of their portfolios and to streamline their regulatory compliance under emerging frameworks, such as the EU’s Sustainable Finance Disclosure Regulations (SFDR). It’s clear IFCs have a vital role to play during this global transition and leading jurisdictions such as Jersey, with long standing expertise in supporting cross-border capital flows and a flourishing fintech cluster, can call upon both these strengths as we gravitate to a more sustainable future. Download your copy of the paper below to learn more.

06 May 2021 290 downloads

Report

Sustainable Finance Live - Reimagining Risk Modelling ESG Solutions

A Visual Record from the Sustainable Finance Live workshops 8-9 December 2020. Debunking the myth that revenue cannot be generated through trustworthy implementation of ESG measures, this co-creation event focused on real-time forward-looking measurement of climate change and nature loss to address transitional and physical risk, following a lean back, lean in and learn by doing model. The workshop detailed how alternative data from sources such as satellites and sensors can augment traditional risk systems and provide insights for the future of sustainable financing. Diving deep into the practical challenges of risk management, the sessions considered using alternative data to inform credit decisions, with speakers providing advice on how to embrace sustainable finance. The interactive forum welcomed a set of cross-functional skills from individuals spanning the technology, business and finance sectors. Initially taking a generalised approach to understand reporting across ESG finance sectors, it became apparent that specific use cases were needed. Richard Peers, founder of ResponsibleRisk and contributing editor for Finextra Research, outlined the key questions for the event: What are the issues and opportunities for risk management working with alternative data to inform credit decisions? How can these decisions be quantified against physical and transition risk? With a top-down approach, a clear focus of the sustainability components and trying to infer the process of assessing the following, the workshop focused on: Using alternative data to inform physical and transition risk How satellite and sensor data can provide insights for investment and governance professionals Plotting the steps to resolution of existing problems and mainstream use of data Identifying how to prevent lack of proper pricing of ESG risk Download the full report below to find out more.

16 April 2021 71 downloads

Report

The Future of ESGTech 2020

Finding value in the data web of sustainable finance. While environmental, social and corporate governance considerations have always been a matter of importance for financial institutions, there is now greater scrutiny than ever of the ESG impact of assets, investments and lending. The adoption of United Nations’ 17 Sustainable Development Goals (SDGs) in 2015 formed a framework for sustainability in the global economy, setting out aims to reduce poverty and hunger, promote good health, wellbeing and education and protect biodiversity and the climate. SDGs do however present complexities given their wide scope and the difficulties in addressing them in equal measure. Additionally, new and different public pressures can develop such that the priorities of businesses and economies are forced to pivot as the global backdrop does. It has been commonplace in recent years, for example, for the World Health Organisation to label climate change the greatest risk to human health around the world. This now seems a debatable summation given the events of 2020, and it is likely that the threat of pandemics and poor health will receive greater attention in the years ahead. The benefits for financial institutions of undertaking ESG-driven activity are well understood but remain clouded in uncertainty due to unknown risk and reward. They, therefore, need practical solutions to work to sustainable goals that can help to bring returns while also delivering positive environmental and social impact. Initiatives that enable this are emerging in the worlds of innovation and technology that harness the data that financial institutions have at their disposal to deliver additional value for clients and stay relevant in a constantly evolving space. However, there remain many unanswered questions about the standardisation of data to make it digestible for firms across the industry, how the user experience of reported data can be transformed to improve knowledge of risks and opportunities and what role technologies such as AI and blockchain can play. This report sets out to answer those questions. Finextra Research has combined opinions and commentary from sustainability experts at Citi, Standard Chartered, BNY Mellon, Moody’s, HSBC, Latham & Watkins, Tandem Bank, and BBVA with original insights and analysis to explore the tools and processes that can assist organisations in developing their ESG offering and driving growth through meeting sustainable goals in the years ahead. Download your copy of the report below now to find out more.

21 December 2020 425 downloads

Report

Sustainable Finance Live - Investment and Asset Management ESG Solutions

A Visual Record from the Sustainable Finance Live workshops. In June 2020, Finextra Research welcomed industry experts to Sustainable Finance Live, the first virtual, interactive workshop to discuss how financial services firms and technology companies can achieve the UN’s Sustainable Development Goals (SDGs) by 2030. Debunking the myth that revenue cannot be generated through trustworthy implementation of ESG measures, this co-creation event targeted the subsector of investment and asset management and explored specific challenges and opportunities, following a lean back, lean in and learn model. The workshop defined what investors require in order to track and securitise with confidence and what asset managers need to build portfolios that institutional investors will select. Diving deep into the practical challenges of investment and asset management, the sessions considered data access and reporting, with speakers providing advice on how to embrace sustainable finance. With a top down approach, a clear focus of the sustainability components and trying to infer the process of assessing the following, the workshop focused on: The investment gap in new technologies and models Information acquisition through third party suppliers to help the risk function Incentivisation schemes to promote better sustainability norms The role of technology in validating ESG activities Download the full report below to find out more.

27 July 2020 271 downloads