It has been estimated that 1.23m of the UK’s most vulnerable adults do not have access to a bank account, one in four people will struggle to access financial services at least once in their lifetime and 10 million households in the UK have no savings at all. The current Covid-19 pandemic is only exacerbating the problems already being faced by these individuals and their families.
With this as a backdrop, The Inclusion Foundation, a not-for-profit Community Interest Company, has recently been launched to address this gap and assist the estimated 13m underserved and most vulnerable adults in the UK. It’s supported by companies such as Mastercard, The Emerging Payments Association, PPS, GPS, SkyParlour and Manifesto Growth, now considered Inclusion Pioneers.
CEO of the Inclusion Foundation is Anne Pieckielon, she explains just why the Foundation is needed.
Why is now a good time to launch the Foundation?
For us, the real question is why has it not been done already? The issues around financial inclusion have remained unchanged and unresolved for over 20 years now, but so has thinking on solutions.
At the Foundation, we believe that in 2020 everyone deserves fair access to banking and payment services. The Foundation is a not-for-profit Community Interest Company (CIC), and our mission is to unite the unbanked and the 13m underserved adults in the UK, giving them a voice and a choice in financial services, enabling access to products that are tailored for them and better meet their needs.
Who are you trying to help?
The Inclusion Foundation is there to support anyone who finds themselves financially excluded. The fact remains that one in four people experience financial exclusion at least once in their lifetime, and 1.7 billion adults across the globe remain unbanked. This shows that, as a society, we’re all at risk at some point in our lives.
How is COVID-19 affecting this?
COVID-19 is particularly affecting the unbanked because access to cash is now significantly reduced, as cash withdrawals from ATM’s and the use of cash has reduced by over 50% in the current environment. On top of this, many retailers are not accepting cash at the moment, so the 1.23 million people who rely on it are exceptionally vulnerable at this time.
As it stands, 10 Million households in the UK have no savings. So, people need help, and we expect more people will be struggling as the lockdown continues.
However, there are some positives that have been triggered by the COVID-19 environment:
- Since lockdown, 12% of adults (some 6 million people in the UK) have downloaded a banking app for the first time. So, more people are moving towards the acceptance of digital and moving away from cash.
- Also, 113,000 people have switched their banking provider using PayUK’s Current Account Switching Service – this is one of the highest months in account switching on record. So, the good news is some people are seeing that their current service isn’t meeting their needs and are able to switch to another service.
- Among the winners of these switches are the newer digital banks such as Starling and Monzo. Many of these fintechs have stepped up and adapted their proposition to assist in the COVID environment – for example by supplying an additional card for a loved one, friend or volunteer to go shopping with for vulnerable and isolated groups.
What will the foundation offer?
The Inclusion Foundation provides three core services, including SignpostNowTM , a comparison website enabling underserved customers to compare financial products that suit their individual needs, and The Inclusion SignpostTM, an accreditation recognising financial services product that serves the needs of previously underserved segments.
Additionally, the Foundation provides an education and learning programme for payment account providers and the government, The Inclusion Academy. The Academy’s think tank arm is dedicated to keeping the pressure on all key stakeholders, while publishing news, research and discussion papers.
How can it be supported?
The foundation is always seeking new pioneers to help foster a more financially inclusive society, so please get in touch if you or your organisation is interested in becoming a TIF industry pioneer.
To further show support for The Inclusion Foundation’s work and spread the word, the awareness movement #FinancialInclusionMatters has been created, and the foundation is looking for organisations and individuals to get behind and engage with the campaign so that it becomes a powerful force for change.
Where do you see the foundation in 5-years-time?
Ultimately, our goal is for the industry to play its part in giving every person in the UK access to financial services. When every person has knowledge of the financial services that are best suited to their situation, we are more likely to lift those least fortunate in society out of the poverty trap. In fact, as SkyParlour’s MD, Angela Yore, says: “There is no excuse for millions of UK citizens to be deprived of simple financial mobility.”
With COVID-19 potentially further exacerbating the problem of inequality in our society, targeting those who are already vulnerable, The Inclusion Foundation is being launched at the ideal time to ensure we can support those people in getting back on their feet.
The role of The Inclusion Foundation overall is to provide better, more inclusive access to information on financial services, and therefore signpost people to the right products. We aim to achieve this as an industry by lobbying key stakeholders in government, commerce and consumer groups, as well as offering the banking world a wide range of vital services so they have the tools to get on board.