Bringing Social Impact to FinTech

Earlier this month, Boston FinTech Week took place - a week of events convened by FinTech Sandbox and organized by Boston’s accelerators, institutions, startups, and firms to build the local FinTech ecosystem. Commonwealth was excited to lend our voice on social impact, financial security, and debt to the conversation by speaking at three events. It was encouraging to see that there is a real appetite from this community to tackle the hard financial challenges faced by many Americans. And there is still more work to be done to build an ecosystem that is inclusive and tackles these challenges head on.

Boston FinTech Week included over 30 events from different stakeholders in the Boston FinTech ecosystem. Commonwealth brought a social impact lens to three panels - a discussion on FinTech and social impact co-hosted by the Federal Reserve Bank of Boston; a funding roundtable for emerging startups; and a discussion on the intersection of debt and technology co-convened with the Aspen Institute and Cinch Financial. While we were encouraged by the positive response to our perspective, the conversation about social impact is still siloed. All actors in the FinTech space - including firms, investors, startups, and advisors - can enable products and solutions that support people in building financial security. Social impact needs to be not just a niche topic designated by a special interest panel, but an integrated element of the Boston FinTech ecosystem.

FinTech entrepreneurs interested in including a social impact perspective also need access to more diverse perspectives than what exists in the Boston FinTech ecosystem today. For example, entrepreneurs at our events had questions about how to structure their companies in order to take on consumer financial challenges that may require a long-term commitment in an ecosystem that moves quickly and expects short-term returns. These startups need additional guidance in creating sustainable business models and new and innovative funding structures that match their social impact goals. In short, a wider range of investors with broader understandings of the time horizons necessary to see social impact need to invest in FinTech.

The Boston FinTech community should also encourage, invest in, and hear from a more diverse group of stakeholders. For FinTech to truly address the most challenging problems Americans face, the voices in the room need to better represent the diversity of this country.

Commonwealth has joined with other nonprofit leaders to found nLIFT, Nonprofit Leaders in Financial Technology, dedicated to ensuring that FinTech innovations meet the needs of low- and middle-income households. We are excited to continue the conversation and partner with the local FinTech community in harnessing the power of FinTech to address the most pressing financial challenges faced by all, including the most financially vulnerable.

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