Financial services institutions have been told they need to focus their use of technology to better provide valuable support to the United Nation’s Sustainable Development Goals (SDGs).
Digital advice technology specialist Ignition has produced a study which puts insures and financial institutions at the heart of the world’s sustainability efforts.
The report, Digital advice and social responsibility, outlines how more accessible financial advice can help to reduce poverty, improve wellbeing, contribute towards a sustainable economy, and decrease financial inequality.
Terry Donohoe, CEO – Europe of Ignition, said that there has been a merging of society’s values and its expectations of businesses, not least financial services businesses, following the outbreak of the COVID-19 pandemic.
“Consumers are increasingly pressuring shareholders and boards to improve their social responsibility. Organisations now have to prove they are thinking deeply and demonstrate they are acting on these issues. It’s a trend which was underway before the pandemic but which has significantly accelerated as a result of the outbreak.
“We have reached a moment in history where we should all be operating at a level where we collaborate to solve big sustainable goals and leverage technology to help us do it.”
He added: “One result of the acceleration in technology and digitisation which has not yet been fully explored is how it can help drive social responsibility initiatives such as those outlined by the UN’s Sustainable Development Goals. The paper is intended to help financial services organisations identify those areas where they can make a difference, and the steps they can take.”
Donohoe added the financial services sector can play a key role in driving four main SDGs:
- End poverty in all its forms, everywhere
- Ensure healthy lives and promote wellbeing for all at all ages
- Promote inclusive and sustainable economic growth, full and productive employment, and decent work for all
- Reduce inequality within and among countries
“Ending poverty is a really good example of where the financial service industry is perfectly positioned to make a big difference,” Donohoe explained. “Studies suggest that the COVID-19 pandemic is set to increase the number of poor by between 119 and 124 million people, and one particular group at risk is women retiring in poverty. This is a global trend and one we are certainly seeing in the UK. Research shows that on average, women will retire with £100,000 less than men which will make a significant difference to their lives in retirement. Women have also been disproportionally impacted by issues such as underpayment of pension entitlements which affected hundreds of thousands of women and totalled £2.7 billion.
“Women are also more likely to work in part-time and casual roles and in industries more greatly affected by lockdowns. They also carry a disproportionate share of unpaid care-related work, making it harder to access employment.
“Financial advice has a vital role to play in helping people make sound financial decisions. Raising financial literacy levels can help individuals create more prosperous futures, and institutions can help by using technology, such as digital advice, AI or open banking, to provide greater access to proactive financial education, calculators and financial health-check tools.”
He concluded: “Better use of technology can more easily and cost-effectively provide those at risk with the information, context, or understanding to develop a basic financial strategy that can improve their financial position and reduce overall poverty levels.
“These tools are essential to help people achieve a more stable and secure financial future.”