ESG and FinTech: Are they connected?

Abstract

Due to the growing focus of institutional investors on sustainability, investment decisions in the financial sector are increasingly focused on environmental, social and governance (ESG) aspects. In this scenario, together with technological progress, sustainable finance, unlike traditional finance, directs capital towards operations that generate positive impacts for the environment and society. FinTech, considered an accelerator of sustainable economic growth, is part of the technological innovations related to sustainable finance. Through the analysis of an exploratory case study of international importance, represented by the bank BNP Paribas, this article uses the unified theory of acceptance and use of technology (UTAUT) to investigate the factors that influence technological innovation in the banking sector. The results show that social influence, reinforced by ESG factors, is a variable that encourages technology adoption in the banking sector. Collaborations with FinTech companies support banks in achieving sustainability objectives more efficiently. This study makes an important contribution to the academic literature. It expands knowledge on the determinants of financial technology diffusion by analysing the effect of ESG factors not considered in previous literature. The study also presents practical implications for banks and policy makers. It is appropriate for banks to plan training activities for managers and employees on FinTech to promote understanding of these subjects and facilitate better institutionalization of sustainability practices.