The Green Digital Finance Alliance (GDFA), in collaboration with the Swiss Green Fintech network, has launched the world’s first green fintech taxonomy at the Building Bridges Summit in Geneva, according to media reports. A report titled ‘A Green Fintech Taxonomy and Data Landscaping’ aims at arriving at a final taxonomy during the first quarter of 2022. The primary role of green fintech taxonomy will be to nurture and stimulate the green fintech market by enabling a proper approach for policymakers, investors and the market to assess green fintech.
Experts say that the time is right to introduce green fintech taxonomy, especially after last year’s fintech market evolution that has been marked by a new wave of fintech solutions in line with green finance. During the formative years of the fintech market, various taxonomies like digital lending, digital payment solutions, and digital wealth management have emerged. This largely mirrored the established financial products segment, just recast in digital forms.
Currently, the landscape has further evolved to encompass new types of commercial applications which collectively can be thought of as the third wave of fintech market development. The third wave is defined by fintech solutions designed to better align the behaviours of the financial system with green objectives; either by unlocking new and more green finance or by better aligning existing financial and capital flows with green objectives. Since this is the latest wave in fintech’s market evolution, an updated taxonomy is in order.
The report also mentioned that the green fintech taxonomy will have green fintech categories like green digital payment and account solutions, green digital investment solutions, digital-ESG data and analytics solutions, green digital crowdfunding and syndication platforms, green digital risk analysis and insure-tech, green digital deposit and lending solutions and green digital assets solution.