Updated on: September 29, 2024
In a recent SafetyDetectives interview, Alvar Lumberg, CTO and co-founder of Grünfin, discussed his journey from IT systems development and his time at Wise to co-founding sustainable investment company Grünfin. He emphasized the company’s mission to make sustainable investing accessible to retail investors while driving capital toward environmentally conscious companies.
Lumberg also shared insights into Grünfin’s approach to sustainability, the cybersecurity challenges faced in fintech, and the role of technologies like blockchain and AI in shaping the future of sustainable finance.
Could you share a bit about your background and what led you to co-found Grünfin?
My background is in IT systems development; I’m a developer by training. I started my career in banking, spending around eight years with one of the larger banks in the region. Then I transitioned into telecom work with a software consultancy for about three years. During that time, I felt drawn towards joining a product company instead of consulting.
I became one of the early employees at TransferWise, now Wise. I had the pleasure of working with several teams in various domains, helping to build a significant part of the organization. My final responsibility before leaving Wise was growing the platform team from about two people to over 40. It was an interesting endeavor. As companies grow, they change a lot, and while this isn’t necessarily a bad thing, I felt the urge to return to an earlier-stage venture.
That’s when my co-worker from Wise approached me to join this new journey. She and our third co-founder, Karin, were exploring the idea of leveraging their finance and product-building expertise in the realm of sustainable investing. Our mission is to drive more capital toward sustainable initiatives and companies, which led to the creation of Grünfin.
What are the core principles that guide Grünfin’s approach to sustainable investing, and how do you see these evolving in the future?
We strongly believe that capital is what makes the world go round, and companies’ performance on the stock market allows them to access capital more easily and make shareholders happier. We think that in a world moving toward sustainability, companies that align with these values will reap the benefits.
On the other hand, retail investors often lack the tools to easily identify sustainable investment options. They shouldn’t have to dig deep into reports or ratings to find companies or funds that match their values. That’s the core idea we built our product around—making it as accessible as possible. Today, people can onboard with Grünfin in about 7-10 minutes. Behind the scenes, our portfolio managers monitor the allocations and ensure the customers’ choices and preferences are met on a quarterly basis. Unlike a robo-advisor, we actively improve our offering and swap out ETFs as needed.
What are the key cybersecurity challenges Grünfin faces in the fintech industry, and how are you addressing them?
I don’t think we’re much different from others in the banking and investment space when it comes to cybersecurity. We face similar threats, such as identity theft and cybersecurity attacks aimed at stealing money or exploiting vulnerabilities. What helps us is that our service is relatively simple compared to, say, a money transfer company, which might have more volatility and shorter customer relationships.
While this might reduce our risks slightly, we still follow strict security protocols, including regular penetration testing and maintaining good security habits. We’re vigilant against evolving threats, although I think there are other businesses that might be more attractive targets for cybercriminals.
How do you see the role of AI and machine learning evolving within Grünfin’s platform to enhance both user experience and security?
The sustainable investment space has evolved significantly, especially in terms of transparency regarding which companies are doing the right thing. However, it’s still an emerging area where many factors are not yet fully quantifiable. The taxonomy and standardization are still being developed.
This is where AI and machine learning can play a key role. While we may not have an AI-driven decision-making engine yet, tools for advanced data analysis and broad-scale analytics are very helpful. Machine learning can help us assess companies’ behaviors, including their supply chains and the values demonstrated by leadership. There’s definitely space for these technologies in our platform, and we’re looking to enhance our portfolio management with more sophisticated AI-driven insights.
With the rise of digital assets and the increasing complexity of the fintech landscape, what emerging technologies do you believe will be crucial for the future of sustainable finance?
Even if money changes form, I think public security trading will continue to behave similarly. However, technologies like blockchain could introduce more sustainable practices, especially in areas like supply chain management. For example, blockchain has been used in Far East Asia to reduce illegal fishing by ensuring that only licensed or permitted fish are sold to the global market.
Blockchain and similar technologies could help reduce fraud and greenwashing by making sustainability claims more tangible and verifiable. This would provide provable, technological solutions to issues that currently rely on public statements, improving transparency and accountability in the world of sustainability.