Ethics have always been a difficult issue in the traditional banking world, which has resulted into stakeholders encountering various controversial situations throughout the years. But in the modern world, where attention towards ethics is higher than it has probably ever been, fintechs have shown strong competitive advantage over banks when it comes to avoiding relevant concerns from the side of the customer base. Any changes to the concept of ethics made by the society have a direct influence on the daily operation of fintech companies. Just like they now do on any new player that is willing to enter and become part of the banking system. This raises a logical question: do ethics fit in the dimensions of rapid fintech growth?

One of the latest trends in the investment sector is the idea of investing sustainably, ensuring that investments will not contribute to the destruction of global ecosystem and will not worsen the climate change situation. This is mainly popularized by millennials, who are now entering the world of big financial transactions with a highly concerned attitude about the ecological impact of their decisions. As the main client segment that the fintech sector is oriented at is millennials, in order to become more attractive for the latter and distinguish themselves among competitors, service providers have to prioritize the ethical component of their solutions.

But the spiel is not just about wisely incorporating the ethics aspect into a fintech company’s organization. Some of such companies, like MoneeMint, were created with an aspiration to pioneer ethical banking in the digital space. The services that this and other similar companies deliver are aimed at full transparency and efficiency in relation to ethics. Among the solutions they offer are biodegradable plastic debit cards, first created by the British bank Triodos. These ethical features move innovation even forward, incorporating important issues of global importance into the decision-making processes in the fintech ecosystem.

The main advancement that has been initiated to promote ethics in fintech is codes of ethics that are being established across the industry. For instance, the Association of Indonesian Financial Technology (Aftech) has established one for peer-to-peer lending, whereas in Australia there is a code that was developed to improve transparency and ethical behavior in fintechs that lend to small businesses. In UK there is an online guide for banks, called ‘Ethics in Banking and Finance’, which will soon hopefully be popularized among fintechs and traditional banking institutions.

When talking about the banking industry in general terms, it is rarely perceived as the one where ethical issues are a priority. Fintech, as one of the branches of the banking tree, can not be viewed as inherently more ethical, as it is still part of a larger ecosystem where the ethical aspect of practices is often put aside. Yet, times and generations change and fintech has emerged in order to earn the trust and serve the needs of modern customers. Given the great number of companies present on the market, fintechs have to convince their customers on a daily basis that the choice they have made in terms of service provider is best for them. This increased competition leaves little place for error, in particular unethical behavior and bad practices. All of this together with the new, more ethics-oriented mind of millennials gives much potential to the fact that fintech companies that want to stay ahead of their competitors will cement ethical behavior into their operations.