The Emerging Payments Association (EPA) which promotes collaboration and innovation across payments, recently published new insight that explores some of the issues that young and elderly age-groups in the UK face when it comes to accessing financial services. The research, which was published on the day that England was released from its second lockdown, also highlights some of the inclusivity initiatives and solutions that are currently offered by Fintechs to address these issues.
According to the Financial Inclusion Commission, the UK has over a million individuals without a bank account. There is a much larger section of the population which is underserved and a disproportionate amount are 16-24 or over 65. The experience of the unbanked and the underserved has been further aggravated in 2020 due to the COVID-19 pandemic and its subsequent lockdowns. When the UK entered COVID-19, it had a low resilience in savings, insurance, affordable credit and financial capabilities, and since the pandemic started further inequalities and the potential of a real credit and debt crisis looms as we head into the Christmas period. The EPA’s Project Inclusion team set out to inspire more action to help these consumer groups at-risk.
The report, All aboard: The role of the Fintech industry in solving the problems of financial exclusion,
was compiled from interviews with a range of stakeholders including banks and payments organisations, consulting organisations, Fintechs, independent industry bodies, social and community interest organisation and consumers. These included subject matter experts from Fintechs and charity organisations, who are playing their part by offering solutions to financially excluded demographics, to consumers at either end of the ‘age-spectrum’ of 16-24 through to those aged 65 and over, who often miss out on the benefits that financial services can bring.
The interviews explore a multitude of factors that contribute to financial inclusion amongst the young and the elderly, deep-diving into:
- Digital skills
- Access to banking
- Personal circumstances
- Low financial awareness
- Lack of understanding of the needs of these consumer groups by the industry.
The findings, sponsored by the EPA’s founding benefactor, Mastercard, also highlight the crucial role Fintechs can have to improve the lives of these groups, such as offering an open banking solution or developing more customer-centric products and services. One such service that was recently announced was free cashback at convenience stores to help with the ever-cashless UK society. The report demonstrates that Fintechs are often leading through customer-focused innovations.
Tony Craddock, Director General of the Emerging Payments Association, commented: “The industry is changing fast. Innovation is everywhere. But we are still leaving people behind. And that’s not right. I believe this collaborative piece of work will inspire us into action so that in time, everyone has access to the payment services they deserve.”
Josh Berle, Business Development Director, Mastercard, and Lead of EPA Project Inclusion, added: “Mastercard is delighted to support EPA’s Project Inclusion and thrilled to have helped produce this new report, which is full of rich takeaways on improving inclusion for all types of users at risk and particularly the youngest and older age groups. Promoting financial inclusion is key part of Mastercard’s ethos to do well by doing good and we will continue our work with EPA to do precisely that.”
EPA’s Project Inclusion aims to drive industry activity to address financial exclusion and to provide clarity on fintech innovations and solutions that reduce financial exclusion. This report is part of Project Inclusion’s work programme, seeking to highlight examples of best practice by payment firms and by encouraging others to think and reflect on how they can support these groups at risk of exclusion.