For years, innovative fintechs across the UK have been helping to fill the gaps that established financial institutions can struggle to service – be it in in-depth credit scoring, access to online payments, or supporting vulnerable customers. But how can they do more in an ever-growing digital age?
Addressing how the UK financial institutions can help be more inclusive is Chris Pond, a CEO, Chair and Director in the public, private and not-for-profit sectors.Pond was Co-chair of Finclusion 2021; a campaign run by Tech Nation’s Fintech Delivery Panel comprising a series of events and webinars dedicated to exploring how fintech can help tackle issues of financial exclusion.
Pond also works towards addressing these issues in his role as Chair of the Financial Inclusion Commission; an independent campaigning body made up of parliamentarians and experts, whose aim is to promote financial inclusion on the public policy agenda.
He told The Fintech Times:
Increasingly, new fintech solutions are being driven by mission-based businesses looking to solve problems in the existing system and reach the financially excluded, which make up a significant and growing portion of the UK population.
According to the Financial Conduct Authority, nearly four in ten adults – around 20 million people – have seen their financial situation worsen during the pandemic. one in six – nearly eight million people – saw it worsen a lot. These were primarily the poor, the young, those from ethnic minority backgrounds, and those without resilience in the form of savings, insurance and financial capability.
On top of this, one in four people have little or no confidence in their ability to manage money. One in five adults wouldn’t be able to cover more than a month of living expenses if they lost their source of income. And one in six is borrowing to pay for essentials because they’ve run out of money, many of them turning to illegal money lenders.
It is clear that something must be done to address these problems. And the UK, as a leading global financial hub, is ideally placed to lead with its fintech innovation, offering a supportive environment shown through measures such as the independent Kalifa Review, which – among its many recommendations – highlighted the need to support citizens and small businesses to access more, better and cheaper financial services, and the need to do so in a sustainable way to help “build back better”.
Momentum is building, and we know there is much more that can be done to move this agenda along in 2022. And last November, when we brought together a community of innovative and progressive minds, working towards the same goal, it was very telling of what could be achieved when we work together towards financial inclusivity.
Hosted by Tech Nation’s Fintech Delivery Panel, the “Finclusion 2021” campaign convened the fintech community – including Monzo, Atom bank, NatWest, Fair4All Finance, Newcastle University, Auden, Claro and Fintrail – to push the financial inclusion agenda further along by uncovering the gaps that still remain and how these can be plugged. These key players in the fintech and finance space hosted a series of discussions and webinars exploring these complex issues, and it was truly inspiring to see some of the ideas and initiatives which have been born out of these incredible events.
Three of the many extremely thought-provoking ideas to come out of the Finclusion 2021 campaign included:
- Atom Bank and Newcastle University’s exploration of creating a verified digital equivalent to the UK’s “Blue Badge Scheme” (a national arrangement that offers special parking provision for people with disabilities, enabling them to park closer to their destination), to help financial providers understand which customers need greater support or are at greatest risk in an online environment.
- Fintrail’s development of clear principles to assist anti-financial crime professionals to consider the full impact of controls and how they affect those who vitally need access to the financial sector.
- Monzo continuing to champion drawing more on available tech and data to improve the efficacy and reach of voluntary gambling blocks, supporting those individuals trying hard to get better control over these instincts.
Some of these concepts are already fairly advanced and in the pipeline, while others are ideas that have only recently been born, but they all demonstrate just how many stones are still unturned when it comes to creating greater financial inclusivity – and this brings me great hope.
I believe that going forwards, we will see an ongoing focus on encouraging many more socially-motivated fintech developments in the future, providing products and services tailored to the way people lead their lives.
We know the talent, ideas and drive are out there. If the energy and innovation of the fintech community can be turned towards addressing people’s real needs, while also scaling solutions across established financial institutions, it could lead to real improvement in wellbeing for millions of people.