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March 27, 2024
Financial success and societal well-being go hand in glove.
Over the last decade, there’s been a change in the way people and corporations think, with a renewed focus on more than just the bottom line. So, while profits matter, companies must look at other aspects as well—especially those that contribute to the greater good of society. As a result, there’s been a trend toward advocating for a higher bottom line, where decision-making is driven by maximizing more than just financial gain.
As time goes by and tech evolves, companies increasingly recognize the interconnectedness of financial success and societal well-being, leading to innovative approaches that align with these dual objectives. Leveraging technology, financial institutions, and organizations are driving efficiency and accessibility, but they’re also increasingly mindful of their societal impact. This recognition highlights a growing awareness that profitability cannot be torn apart from its broader effects on communities and the environment. As a result, there’s a notable shift towards investments and initiatives that yield financial returns and contribute positively to society.
This holistic approach signals a pivotal moment in the finance industry’s evolution, where profit and purpose converge to redefine success in terms of a Higher Bottom Line.
Accounting and finance companies are adapting to new financial service trends by leveraging technology to transform revenue generation, accessibility, and innovation. This evolution reflects a dynamic shift in how these companies operate in response to changing market demands and opportunities. Let’s take a closer look:
The Sustainable Finance Phenomena
Climate change and environmental catastrophes are increasingly familiar phenomena in today’s world. As Greta Thunberg aptly stated, “Our house is on fire.” The future of the finance industry must acknowledge the impact of its activities on the planet’s sustainability. The Fintech sector, a significant player in 2024, will increasingly recognize the urgency of adopting sustainable practices to mitigate environmental degradation and ensure a habitable future for all.
In today’s business landscape, there’s a heightened expectation for institutions to prioritize sustainability and Environmental, Social, and Governance (ESG) factors. 2024 has witnessed a growing emphasis on supporting investments in green initiatives like renewable energy and carbon footprint reduction. As sustainable financial products gain traction, customers seek assurance that their investments contribute positively to the environment and society while accruing interest.
Sustainable finance, which integrates ESG factors into investment decisions, is increasingly shaping business strategies. Rather than mere marketing tactics, it’s becoming evident that prioritizing environmental and social performance yields tangible business benefits while fostering positive impacts on society and the planet. This paradigm shift demands new skills and competencies from professionals in accounting and finance. ESG thinking is reshaping the roles of financial professionals, offering opportunities for innovation in mundane tasks such as accounting of environmental impact, enabling individuals to adeptly navigate metrics like greenhouse gas emissions and gender pay gap results, analyze renewable energy investments, and assess climate risks. Embracing this revolution and driving value creation for companies while contributing to positive societal outcomes aligns with the ethos of achieving a higher bottom line for society and the finance industry.
| Talk to us about how Escalon’s FinOps can help you gain financial insights to make informed decisions. |
The Rise of Regulatory Technology
Regulatory technology, also known as Regtech, epitomizes the fusion of cutting-edge technologies such as big data, artificial intelligence, and blockchain to boost financial risk management, enhance regulatory compliance, and combat money laundering and fraud. It encompasses the utilization of AI, blockchain, and cloud computing tools to streamline compliance tasks for banks and insurers.
Regtech’s significance is projected to surge in 2024, driven by the escalating complexity and volume of regulatory mandates within the financial and technology services domain, mainly concerning personal data and privacy. By harnessing the power of innovative technologies, Regtech empowers financial institutions to navigate regulatory landscapes with greater efficiency.
Integrating technology into compliance processes reduces operational burdens. It also enhances the industry’s ability to safeguard against financial risks and fraudulent activities. Moreover, Regtech holds the potential to promote greater transparency and accountability, fostering trust among stakeholders.
As financial services evolve in tandem with technological advancements, Regtech emerges as a pivotal tool for achieving the industry’s higher bottom line. Regtech contributes to a more resilient and trustworthy financial ecosystem by facilitating smoother compliance operations and mitigating risks, aligning with societal well-being and sustainable growth goals.
Generative AI in Fintech
Fintech encompasses technological advancements to empower consumers to exert greater control over their financial activities, including management, spending, and investing. Generative Artificial Intelligence (AI) will play a prominent role in this arena, mainly through the emergence of chatbots. Chatbots enable customers to engage with banking apps in colloquial language, enhancing user experience and providing accessibility to personalized financial planning and bespoke investment strategies. This detailed customization improves customer satisfaction and promotes more informed and strategic decision-making regarding money management and investment.
By leveraging customer profiles and behavioral data, Fintech companies can tailor financial solutions to meet individual needs and preferences. Generative AI holds immense potential for revolutionizing the Fintech industry, driving innovation and efficiency. This, in turn, fosters greater financial literacy and empowerment among users, contributing to the industry’s overarching goal of achieving a higher bottom line for both society and the financial sector.
Transparency First: The Emergence of Open Banking
Open Banking operates on the fundamental principle of empowering individuals to control their financial data and its utilization. As a concept, open banking facilitates secure data sharing via Application Programming Interfaces (APIs), enabling seamless integration with various tools aimed at delivering valuable financial services. As we progress into 2024, Open Banking emerges as a pivotal trend, driven by an increasing awareness of the significance of comprehending who holds our data and how it’s utilized.
This paradigm shift not only fosters transparency and accountability but also incentivizes service providers to engage in competitive innovation. Furthermore, it promotes a more competitive landscape within the financial industry, driving organizations to enhance their offerings and customer experiences.
By leveraging Open Banking frameworks, Fintech companies can create a more inclusive, transparent, and accessible financial ecosystem, aligning with the broader goal of societal welfare and economic prosperity.
Key Takeaway
Recent trends in financial services highlight the importance of companies balancing profitability with societal betterment. 2024 this balance will become increasingly evident, showcasing how tech developments can drive meaningful change without compromising either bottom line. As companies navigate these trends, it’s clear that prioritizing both profit and societal benefit is not only feasible but essential for fostering sustainable growth and innovation in the tech-driven financial landscape.
Want to know more? In addition to HR, benefits, recruiting, and payroll through its PeopleOps, Escalon’s Essential Business Services include FinOps (CFO services, taxes, bookkeeping, and accounting) and Risk (business insurance). Talk to an expert today.
With 6 years of experience in copywriting and social media management across genres, Devayani's heart lies with weaving words into stories and visuals into carefully crafted narratives that’ll keep you wanting more. She carries with her, her pocket notebook, a trusted confidante that goes with her wherever she goes, and scribbles down into it anecdotes on the go. Her secret weapon for keeping all things copy interesting! Apart from writing, Devayani is huge on travelling. You'll find her booking her next adventure while she's on her current one. And while on those adventures, you'll find her devouring true crime books one after the other. Whether it's a low down on a recent case or one that occurred 70 years ago, she can cook up a story narration you'll never forget.
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