M-RCBG Associate Working Paper No. 194

Strategic analysis and recommendations for measuring and communicating the impact of
fintech products and services

Zoe Bulger


Executive Summary

Stakeholders increasingly favor companies that can link their business model to impact—that is, companies that can show that their core products have a positive impact on the environment and society. This means that there is a competitive opportunity for businesses to demonstrate where their products have impact and continuously evolve products to drive impact aligned with business priorities.

This paper focuses on the opportunity for financial technology (fintech) companies to adopt more rigorous approaches to product impact in the context of increased focus on corporate impact. Strategic recommendations focus specifically on PayPal, given the company’s position as one of the largest fintech players globally and its commitment to social impact through the democratization of financial services. The recommendations are based on a comprehensive review of research and standards, expert interviews, and benchmarking analysis.

The drivers of product impact differ across industries based on the topics that are most material in terms of social value and financial performance. For fintech, product impact is defined by impacts on financial inclusion, financial health, and digital stewardship. Many leading fintech companies today acknowledge these impact areas. But, few companies report on product impact in a way meets the needs of various stakeholders. Specifically, fintech companies can do more to tie product impact to their business model, streamline information, quantify and validate outcomes, and enable flexibility in engaging with the data. Leading global impact standards also fail to provide adequate guidance on the issues most relevant to fintech, limiting adoption of standards among fintech players.

In this context, PayPal has an opportunity to lead, setting standards for what good looks like in product impact reporting in a way that advances the company’s own potential for impact and also elevates the fintech industry’s potential for impact. This leadership can drive strategic value for PayPal, helping PayPal stand out among companies claiming impact without demonstrating impact and informing new growth strategies and product innovations.

Specifically, PayPal can lead by:
(1) Systematically incorporating product impacts in ESG reporting, with impact information consistently tied to a product impact framework (i.e., the three materiality topics for fintech products—financial inclusion, financial health, and digital stewardship), and
(2) Adopting impact-weighted accounting as a means of capturing product impact in rigorous, monetary terms.

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