What if Banking was Green? An Essay to Quantify the Effect of Fintech on Financial Inclusion and Environmental Sustainability

This paper aims to quantify the relationship between fintech, financial inclusion, and environmental sustainability using a Bayesian VAR approach and Granger Causality test using annual data, covering the period from 1998 to 2022. The study examines the effects of fintech adoption, represented by ATM and mobile banking, on the financial inclusion index and environmental sustainability indicators, including CO2 emissions and bioenergy production. The results revealed that financial technology contributes to expanding financial inclusion within the United Kingdom especially when using mobile banking apps and online payment platforms, where it helps to incur lower transaction costs, overcome barriers, offer diverse services, and expand access to financial services. Further, our findings show that via leveraging technology and promoting financial inclusion, the UK can advance both financial access and environmental sustainability, fostering an inclusive-green economy.