Current concerns over sustainability issues have heightened attention on the role of the financial system in supporting the transition to a sustainable economic model, which includes digital finance and FinTech. Leveraging on new technologies, FinTech firms may contribute to Sustainable Development Goals (SDGs) thanks to their ability to redirect financial resources toward more sustainable uses and to mitigate financial exclusion. We investigate if FinTech firms’ SDG-orientation has a strategic potential in establishing strategic alliances with banks, which could be crucial for FinTechs’ development and growth path. More specifically, we investigate if FinTech firms’ SDG-orientation facilitates bank-FinTech relationships and if there are differences among various types of agreement (equity or non-equity agreements). Using a sample of 124 Italian FinTech firms, our evidence shows that FinTech firms’ SDG-orientation positively affects the probability to observe relationships between FinTechs and banks. This holds for social and environmental dimensions introduced by Agenda 2030. FinTech firms that contribute the most to sustainability, and particularly the economic pillar, are more likely to strongly cooperate with banks through equity agreements, which usually imply a firm commitment of banks in sustaining FinTech firms’ activity. Based on these results, we conclude this study highlights important managerial (both for FinTechs and banks) and regulatory implications.
FinTech and Sustainability / Cosma, Stefano; Pennetta, Daniela. - (2023), pp. 113-134. [10.4324/9781003340454-8]