Innovations and Their Impact on Sustainability Essay

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1. Define a current problem in the selected country. Who is affected? Where are the individuals located? What are the resulting socioeconomic costs of the problem to the affected individuals?Financial technology is quickly revolutionizing the way consumers interact with their banks, insurance companies, and other financial intermediaries. These fintech firms utilized concepts such as artificial intelligence, data analytics, and other innovations to allow for a much more seamless process of accessing monetary funds. This has quickly become an emerging technology within Brazil and Latin America overall. Brazil has historically had one of the most concentrated and antiquated financial systems in the world. 5 banks controlled nearly 95% of the country’s deposits. Nearly half of the population of Brazil was unbanked and even more didn’t access to basic financial products such as a credit card. The Brazilian economy has recently experienced a nearly 5-year recessions causing the unemployment rate to increase to nearly 14%. Consumers during this recession were further restricted access to capital at the very moment they needed it. As a result, consumers could not purchase homes, invest, or even purchase insurance without a very large increase in pricing. This pricing increase occurred as the financial industry is highly concentrated and thus allows only a handful of institutions to command a large amount of influence. This has led to a lack of innovation, low consumer satisfaction, and lower service ratings on the part of financial institutions in Brazil. In response, the government has initiated several reforms to help increase access to capital for consumers while also shoring up the financial integrity of the banking system overall (Douglas, 2016). The government has loosened regulations allows competitors to enter the market and compete for consumers. This have also allowing technology firms to apply for bank charters in an effort to help create further innovations within the industry. As a result, fintech firms have emerged that have quickly gained market share. These innovations have impacted nearly 200 million Brazilians who can now have access to much more innovative financial technology, products and services.

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The resulting socioeconomic costs of the problem are difficult to quantify but are very high considering the large percentage of Brazilians that are currently unbanked. The result of a large unbanked populations limits the exchange of capital and resources from savers to borrowers. It also undermines the overall integrity of the financial system as consumers are forced to use unsecure methods of storing and saving money (Douglas, 2017).2. What…

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…Traditional banks often use a much more structured and capital-intensive approach that requires them to charge higher interest rates. Fintech firms however can charge lower interest rates using data analytics and other artificial intelligence backed products to lower credit risk and enhance consumer outcomes (Sumit, 2020).4. To what extent will this emerging technology foster sustainability practices on the economy in the selected country?Sustainability practices can be improved as the Brazilian economy is not heavily reliant on locations, and physical bank branches. Likewise use of paper and other items is heavily reduced using financial technology. This reduction in bank branches reduces energy consumption, carbon emissions, and other fossil fuel emission needed to drive to the branch to process banking transactions. The reduction in paper usage also helps reduce societies need of paper and other paper-based products.5. Explanation of how an existing MNC in the selected country could solve the problem by implementation of the emerging technology while supporting sustainability practices.Sustainability practices can first be supported by higher adoption rates by Brazilian consumers. As the technology becomes much more mainstream, companies can begin expanding beyond Brazil to capture market share in other Latin American territories. This will ultimately help further sustainability practices as consumers continue to adopt paperless financial….....

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