Take, for instance, the incredible importance that younger demographics, particularly Gen Z and Millennials, place on corporate social responsibility (CSR). In light of this, it’s puzzling why more fintechs aren’t prioritising CSR within their core business strategies.

According to research from the New Standard Institute, 94% of Gen Z believe companies should address social and environmental issues. Similarly, the 2015 Cone Communications Millennial CSR Study found that “more than nine-in-10 Millennials would switch brands to one associated with a cause.” These statistics show that CSR is no longer simply a "nice-to-have" – it’s increasingly a key differentiator for companies aiming to build lasting relationships with younger consumers.

A growing incentive

This desire for companies with strong CSR ethos goes beyond just words. Research shows that 73% of Millennials are willing to pay more for products and services from companies committed to positive. Environmental, Social, and Governance (ESG) activities. Furthermore, 81% of Millennials expect companies to adopt public commitments to CSR. While these have long been goals for many businesses, the rising importance placed on them by younger generations has made them a necessity.

So, why aren't fintechs leading this movement? The sector has always been closely linked to younger generations, yet aside from the muted impact of the 'fintech for good' movement, the role of fintech in driving positive CSR and ESG initiatives has been largely lacking. As younger people shift from being "future" customers to present-day ones, fintechs must take more impactful actions to address this demand.

A path to impact

For fintechs looking to address this shift, the path to success isn't overly complex but does require determination and authenticity. Prioritising ESG and CSR performance means embedding these goals into the very foundation of the business. This might seem straightforward, but it often runs counter to conventional business wisdom, where financial metrics are valued far more than measuring the positive impact a company has on the world around it.

However, challenging conventional wisdom can lead to better outcomes. Building on the research mentioned earlier, capturing the long-term loyalty and trust of younger consumers necessitates this shift. Rather than being used merely as a PR tool, CSR is becoming integral to long-term growth strategies. It’s time for fintechs like Kixy to embrace this change, or risk being left behind.

Genuine action, measurable results

My advice for companies looking to navigate this new terrain is to establish strategic, community-oriented partnerships with reputable organisations. These partnerships are key to ensuring you’re making a real, tangible impact on the communities or causes you aim to support. Such organisations have the experience and deep knowledge needed to turn initiatives into genuine success stories.

It’s also essential to avoid superficial or performative CSR efforts. If there’s one thing younger generations dislike more than companies that ignore social responsibility, it’s those that overstate their commitments. We've seen several examples of companies failing in this regard, and it’s a quick way to undermine your efforts.

A new dawn for fintech

In theory, the fintech sector should be well-aligned with the values of younger demographics. However, in recent years, the industry has strayed, pursuing goals that diverge from these expectations. But as younger generations mature into powerful consumers capable of driving revenues, the urgency to meet their demands has increased significantly.

This won’t be “business as usual” for fintech companies. Younger generations clearly value different priorities, especially regarding the social responsibility of the businesses they choose to support. The time has come for a new era in fintech, one that prioritises ESG and CSR in meaningful ways. At Kixy, we are embracing this shift and positioning ourselves to lead this much-needed change.