Finastra Launches SaaS ESG Service for Sustainable Lending

Fintech vendor Finastra has launched the new ESG Service to support banks in their sustainable lending practices in regard to corporate clients

Finastra Launches SaaS ESG Service for Sustainable Lending

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Putting ESG at the core of its products, Finastra has introduced the ESG Service – a cloud-native SaaS solution that helps banks deploy highly flexible and comprehensive sustainability-linked lending programs and services.

Sustainability-linked loans are more challenging than other credit products, requiring constant tracking of the sustainability performance compared to targets outlined in the credit agreement. Therefore, Finastra’s new service facilitates the integration of sustainability performance target criteria into ESG pricing for both Finastra Loan IQ and other back-office systems in the market.

ESG Service is an app designed to support sustainability-linked loan pricing. Based on cloud technology, this SaaS solution uses open APIs to support varied deal structures. Additionally, it offers flexibility and customization, being able to add new capabilities and partner applications to the existing system.

Thus, corporate customers can add additional pricing components, beyond interest and ongoing fees, as well as support for multiple transaction processing systems that require loan pricing adjustments. The product is specifically designed to suit the needs of users across the middle and back office, including credit managers, borrowers and sustainability coordinators.

The tool’s automated management of the KPIs and ESG pricing changes enables banks to scale sustainability-linked lending portfolios and minimizes the risks tied to manual data processing. Besides, the centralised storage of all sustainability-related data will facilitate regulatory compliance for sustainable lenders who often find it challenging to navigate complex and constantly evolving ESG regulations.

Focusing on ESG initiatives not only benefits the environment and local communities but also helps fintechs attract venture capital and gain substantial profits. Finastra is one of the few major fintechs that benefit from ESG focus.

Last year, the company teamed up with EcoTree, a specialised forestry company focused on carbon removal and biodiversity preservation through tree planting and sustainable forestry management, to both help the FS industry become eco-friendly and become carbon neutral itself by 2030.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.