“Assessing statistical link between FinTech PEST environment and achievement of SDGs”

Implementation of SDGs is the unified goal of 193 UN Member States. FinTech plays a crucial role in achieving it. Therefore, the development of FinTech must be facilitated through proper policy-making and public finance, creating beneficial PEST conditions. However, the interaction of the FinTech PEST environment and achievement of SDGs is a topic that has not yet been addressed. The purpose of this study is to assess the link between these two indicators using statistical methods, indicate SDGs having the strongest link to FinTech PEST environment, and explain the interface to facilitate its useful application within government and financial regulations, as well as administration of the state and municipal financial entities. The results show that the economic and investment potential of Northern Europe is caused by the most favorable PEST environment for FinTech sector development, and demonstrate the existence of a statistical link between FinTech PEST environment and SDG4, SDG8, SDG9, SDG16. There is a clear trend – the more favorable the FinTech PEST environment, the better the achievement of SDGs, the better results of Sustainable Finance indicators, and the higher the Sustainable Finance typology assigned to the country. These results suggest that the goals, targets, and indicators of SDG4, SDG8, SDG9, and SDG16 contribute to the formation of a favorable environment and are conductive to the sustainable development of the FinTech industry in a country. Therefore, sustainability in the development of FinTech industry and finance, and the achievement of SDGs, is a circular process of three interacting factors.


INTRODUCTION
In 2015, 193 members of the UN have united the forces and adopted a common 15-year strategy and 17 goals, named the Sustainable Development Goals (SDGs), towards the objective of worldwide sustainable development. From that moment on, ways and means of achieving these goals are sought.
Research over the last 5 years has shown that FinTech, as one of the fastest-growing industries, is one of the main impetuses of sustainable development. There are numerous examples of innovative solutions tackling one or multiple SDGs in the financial sector. Therefore, the aim is currently to promote the development of sustainability-oriented FinTech worldwide. This requires appropriate external conditions at the country level, such as favorable and appropriate government and financial regulations, as well as administration of the state and municipal financial entities. Accordingly, it is crucial to assess the FinTech political, economic, social, and technological (PEST) environment nationwide as well as to assess the links between FinTech PEST environment and the SDGs. However, there are no studies on the relationship between the FinTech PEST environment and the achievement of SDGs.

LITERATURE REVIEW
Sustainability and sustainable development are undoubtedly some of the most relevant and discussed topics in the scientific literature these days (Portney,  Another relevant research topic is FinTech. Interest in the subject grew particularly in 2017 when the steadily and gradually growing industry began to grow much more significantly. Total global investment in FinTech in 2014-2017 ranged between 51 and 74 billion US dollars, while total global investment in FinTech already amounted to 146 billion US dollars in 2018 and 168 billion US dollars in 2019. The growth trend of total global investment in FinTech over the last decade is presented in Figure 1. As the volume of investments in the FinTech industry grew at such a pace, FinTech has begun to be actively explored as an object of studies by the scientific and policy-making communities aiming to link this industry to sustainable growth and achievement of the SDGs. In 2014, the UN Environment Programme initiated the establishment of the Inquiry into the Design of a Sustainable Financial System (the Inquiry) to refine the efficiency of the financial system achieving a green and inclusive economy, in other words, sustain-  able development (Castilla-Rubio et al., 2016). Its pivotal 2015 report revealed that the "quiet revolution" is already happening and it is aimed at the update of the financial system towards sustainable development. Since its launch, the Inquiry has addressed three core questions: (1) When should we take measures to ensure that the financial system is oriented on sustainable development? (2) What measures should we widely implement to focus financial system on sustainable development? (3) How can we implement such measures in the best way? (UNEP, 2015).
As an answer to these questions, FinTech is being considered as one of the main measures. At the end of 2016, the Inquiry released a report on the assessment of FinTech and sustainable development implications, which considers FinTech's potential to support the achievement of SDGs, and therefore notes that transition of the financial system is driven by sustainable development and FinTech, both having the same "basic potential as drivers of change and impact", being suitable for "creating new, sustainable business models" (Castilla-Rubio et al., 2016). This report also presented the concept of "FinTech for sustainable development" (FT4SD) innovation portfolio.

METHODOLOGY
The methodology of this paper consists of the following three steps and methods: 1. Multi-criteria assessment is done for the assessment of the FinTech PEST environment on a country level. For this step, 15 countries were selected to adopt a new FinTech PEST environment assessment tool (Pauliukevičienė & Stankevičienė, 2021). The composition of this tool is presented in Table 1 and the explanation of all indicators is provided in Appendix A. The tool consists of 4 different external environments and 32 indicators. In addition, data collection and partial processing were carried out: country rankings on a global level were expressed as a percentage, values of the indicators were normalized.
To assess the performance of each selected country in each environment, multi-criteria assessment (Simple Additive Weighting method) was used -every indicator was multiplied by its weight (Pauliukevičienė & Stankevičienė, 2021), and the numbers obtained after multiplication were summed in each environment (Appendix B). To assess the performance of each selected country in the overall PEST environment, the same principle was applied ( where D -the difference between ranks, n -total number of pairs of data. ( ) where n c -number of concordant pairs, n dnumber of discordant pairs, n -total number of pairs of data.
where r -the value of correlation coefficient, nnumber of data pairs in the sample. 3. Comparative data analysis of FinTech PEST environment scores, SDG achievement scores, Sustainable Finance scores, and Sustainable Finance typology was conducted to assess whether any link or trend is visible.
The results of the paper were statistically processed using the Microsoft Excel software.  The results of data collection and partial processing for the FinTech PEST environment assessment tool (Pauliukevičienė & Stankevičienė, 2021) adaptation are presented in Appendix B, where country rankings on a global level were expressed as percentages and normalized. To fully adapt the FinTech PEST environment assessment tool to the study and assess the performance of each country in each PEST environment, Multi-Criteria Decision Support Method of Simple Additive Weighting (SAW) was used -every indicator value presented in Appendix B was multiplied by its weight, also presented in Table 1. The results of FinTech PEST environment assessment tool adaptation presented in Table 2 and Table 3.

Components of the environment and their significance
Results show that the most favorable:    In particular, the correlation between 4 different FinTech environments -political, economic, social, and technological, and SDGs was assessed and presented in Table 5. It should be noted that in some calculation cases the correlation was found to be statistically insignificant. Therefore, these cases are marked in Table 5. In all other cases of calculation, the correlation was found as statistically significant at either the 0.01 level, 0.05 level, or 0.10 level.
The results showed, that when assessing the correlation between the 2 indicators by Pearson, the highest correlation most often occurred in the so-  Table 6. Second, the correlation between the general FinTech PEST environment and SDGs was assessed and presented in Table 7. The strongest correlation results were obtained by Pearson -the values range from 0.671 to 0.915, which is a strong positive correlation since the value 1 means a perfect positive correlation. Therefore, it can be said that the better the FinTech PEST environment in a country, the better achievement of SDGs and vice versa.
The results of ranking correlation coefficients showed a weaker correlation, compared to the results of the linear correlation coefficient. However, according to Spearman, six out of eight values fall within a range from 0.575 to 0.807, which shows either moderate or strong correlation, and a tendency for high FinTech PEST environment scores go with high SDG scores, and vice versa. According to the results of Kendall, four out of eight values fall within a range from 0.524 to 0.619, which shows a moderate positive correlation and a tendency for high FinTech PEST environment scores to go with high SDG scores, and vice versa.
It should also be noted that in some calculation cases the correlation was found to be statistically insignificant. Therefore, these cases are marked in Table 7. In all other cases of calculation, the correlation was found as statistically significant at either the 0.01 level or 0.05 level. Correlation study support the hypothesis of the paper -there is a statistical link between the FinTech PEST environment and SDG4, SDG8, SDG9, SDG16, where the correlation coefficient was greater than 0.5 for all three correlation measurement methods. Therefore, it can be stated that the FinTech PEST environment and SDG4, SDG8, SDG9, SDG16 are dependent, and the greatest de-  pendence of the scores is between FinTech PEST environment and SDG16.
To visually depict the link between FinTech PEST environment and SDG4, SDG8, SDG9, SDG16, and to visualize the formation of beneficial conditions for the sustainable development of FinTech industry, the scheme of the seventeen SDGs and their relationship with the biosphere and the safe operating space for humanity (Folke et al., 2016), as well as the scheme of sustainable development challenges at different levels (Schoenmaker, 2017) were adapted.
Since SDG4 and SDG16 are among those that have the greatest impact on society, while SDG8 and SDG9 are among those that have the greatest impact on the economy, the creation of beneficial conditions for FinTech sustainable development is based on society -quality education (SDG4) and peace, justice and strong institutions (SDG16) in particular, and the economy -decent work and economic growth (SDG8) as well as industries, innovation, and infrastructure (SDG9), as the main influencing factors and drivers.
To refine the essential characteristics of society and economy, to foster an environment conducive to sustainable FinTech growth, an analysis of goals, targets, and indicators of SDG4, SDG8, SDG9, SDG16, relevant to FinTech development, was conducted (Appendix C). According to this analysis, society was defined as inclusive, and the economy as growing. The visualization of the link between the FinTech PEST environment and four SDGs is presented in Figure 2.
In 2017, a framework for Sustainable Finance was introduced, presenting a Sustainable Finance typology based on the value created -ranking of financial value, social impact, and environmental impact factors as well as the horizon (Schoenmaker, 2017). Ziolo et al. (2021) confirmed the relationship between achievement of SDGs and sustainable financing, which was the strongest in countries that use Sustainable Finance 3.0, oriented to social-environmental impact first and a common good value in the long run. The paper adapts this data by incorporating FinTech PEST environment assessment results and carrying out comparative data analysis to assess whether any link or trend is visible. Table 9 shows the results of the comparative analysis.
The comparative analysis shows a clear trend -the more favorable the FinTech PEST environment in a country, the better the achievement of SDGs, the better results of Sustainable Finance indicators, and therefore, the higher the Sustainable Finance typology assigned to the country. Finland, Denmark, Sweden, and the Netherlands ranked first in the FinTech PEST environment, showed great results in the implementation of SDGs and finance, and all four were assigned to the Sustainable Finance 3.0 -all four are oriented to social-environmental impact first and a common good value in the long run. Moreover, such a trend is seen in the assessment of all 15 countries -the less favorable the PEST environment for FinTech development, the lower the achievement of SDGs, the worse the Sustainable Finance performance of a country. The only exception is two countries -Lithuania and Spain, that were assigned to the Conventional Finance model, or "Finance-asusual", oriented to the maximization of finan-cial value in a short-term, taking average positions in the FinTech PEST environment ranking despite poor performance in the achievement of SDGs and the sustainable financing. The link between the Sustainable Finance model, SDGs, and PEST conditions for the sustainable development of the FinTech industry was visualized and presented in Figure 3.
The paper suggests a novel approach of sustainability in the development of FinTech industry, finance, and achievement of SDGs, as a circular process of three interacting factors and invites for the discussion.

DISCUSSION
The findings of this study show that 4 out of 17 SDGs have a statistical connection with the FinTech PEST environment (listed in descending order of the link): SDG16, SDG8, SDG9, and SDG4. This result can be interpreted in two ways: either improving the FinTech PEST environment enhances the achievement of SDGs, or This study was limited by the temporal equivalence of the data. International ranking data for 2020 was used to assess the FinTech PEST environment. In compiling these rankings, the data from different time intervals were used, which generally partially cover the years 2016-2020. Meanwhile for SDG achievement assessment, the data generally partially covering the years 2010-2020 were used. Therefore, SDG achievement data from 2016 were used (Ziolo et al., 2021). Some limitations were observed in the comparative analysis as well -Lithuania and Spain as representatives of the Conventional Finance model took average positions in the FinTech PEST environment ranking despite poor performance in the achievement of SDGs and the Sustainable Finance, therefore, stood out as the only countries that did not follow the general trend of the results. Therefore, the results call for further research. Further studies should be extended by assessing the FinTech PEST environment and implementation of SDGs in more countries since the achievement of SDGs is a common goal of 193 countries (current study represents the results for 15 countries), as well as clarifying the link between the FinTech PEST environment, SDGs and the Sustainable Finance model to facilitate proper policy-making and public finances and further shape favorable environment for the sustainable development of FinTech industry.