Each week, The Fintech Times takes a look at the top stories in British fintech. Today we hear about the popularity of contactless technology when making payments, the need for digital infrastructure in Britain and the negative impact of dual pricing and auto-renewals in the insurance industry.
The Need for Digital Infrastructure
A new independent report titled ‘Connected Citizens’ from Public Policy Projects (PPP), in partnership with Anderson Strategy, and in collaboration with Huawei, contains urgent recommendations to the UK Government for a broad and ambitious new digital operating model that will help local, regional and central governmental bodies hit connectivity and sustainability targets for a digital green future, and become a digital world-leader.
Placed within the context of the Covid-19 pandemic, which has put more pressure on our connectivity capabilities than ever before, and following recent sustainability targets announced by the Government, the report clearly outlines the vital need to create a network of cutting-edge digital infrastructure across the UK.
Rt Hon Stephen Dorrell, Executive Chair of Public Policy Projects said: “This White Paper is a call to action, setting out five broad recommendations for a new digital operating model in Britain. It identifies some of the challenges we face and seeks to learn from the experience of others as well as ourselves. We should not underestimate the challenge, but nor should we lose sight of the opportunity to reshape our society to meet the demands of the 21st century.”
New data from Barclaycard reveals that contactless technology has accounted for 88.6 per cent of all eligible card transactions. As the safest and fastest and most responsible way to pay in-store, tap-and-go purchases are a regular occurrence to help prevent the spread of coronavirus.
Not only does it allow consumers to pay without touching card terminals or handling cash, but it also helps reduce the volume of people in stores by reducing queue times – contactless transactions are, on average, seven seconds faster than Chip and PIN, and 15 seconds faster than cash.
The biggest milestone for the technology was in April when the UK limit was raised from £30 to £45, making even more transactions eligible for contactless payments. Since the introduction of the new limit, the average value of contactless transactions has jumped to £12.38, up almost a third compared to the 2019 average of £9.60.
The Damage of Auto-renewals in the Insurance Industry
According to the Financial Conduct Authority (FCA), new customers can pay as much as 30% less for their insurance than existing customers who have been with a provider for over five years. Roughly 10 million policies across home and motor insurance are held by people who have been with their provider for five years or more. In response to this, the FCA have proposed a package of remedies aimed to eradicate the damage dual pricing and auto-renewals has on consumers in home and motor insurance. Following a consultation period, the financial regulator plans to finalise and publish its policy statement in Q2 after carefully studying the potential impact of its remedies on the market and reviewing and monitoring the impact of COVID-19.
Freddy Macnamara, CEO of insurance provider Cuvva, said, “Over the years price comparison websites have controlled pricing in the insurance market, pushing prices so low they’ve become unsustainable, which in turn leads to insurers bumping up prices at renewal to compensate for the initial low premiums set. “Dual pricing has created an industry that demotes customer loyalty as comparison websites rely on people switching annually. The FCA’s remedies are seriously needed to ensure fairer outcomes for customers.”
Collection Pot Partners with Sporting Chance Charity
Collection Pot has announced a partnership with sports mental health charity Sporting Chance, which includes Sporting Chance being named as Collection Pot’s first Charity Partner of the Month.
The group collecting platform is used by workplaces and individuals, with digital Pots set up to raise money for every kind of occasion but is also increasingly used by charities for fundraising. A percentage of all Pots set up from the 20th January and through February will be donated to Sporting Chance, a charity founded by former England captain Tony Adams MBE. It was initially set up to support footballers but now helps sportspeople of any kind, past and present.
Colin Bland, CEO of Sporting Chance said, “For over 20 years now we have been working with professional athletes and former professional athletes struggling with their emotional and mental health and even in ‘normal’ times, the need for our services has always been there. The pandemic will only add to that. Both our treatment and education services are as relevant as ever, and perhaps more crucial. Our partnership with Collection Pot will help us to achieve what we need to achieve to help more sportspeople develop a sense of emotional literacy and feel more comfortable in engaging in support in the same way they would if something wasn’t quite right physically.”
Brits are Financially Forgetful
Personal finance experts, Ocean Finance have found that 39% of Brits don’t know the exact amount they are paid each month. The company surveyed 1,000 Brits about their memory, in order to uncover how financially forgetful Brits have become due to their reliance on fintech i.e. contactless payments, auto-fill passwords. 39% of Brits aren’t aware of the exact amount that they are paid each month
Over half (52%) of Brits can’t remember the last payment they made on their debit or credit card, with 1 in 3 having forgotten they’re paying for unused subscriptions such as Netflix or Spotify.
UK Lags Behind in Productivity
Supply chain specialists, Balloon One, have conducted new research looking into why the UK is lagging behind in its use of industrial robots, and how its national productivity is suffering as a result, with the UK ranked 20th most productive country in the world.
To see if there really was a link between having a greater robot density and having a more productive industry, they looked at data from the nations with the most robots from across the globe to see how productive they were and how much they relied on manufacturing as a percentage of their GDP.
Compared to nations with similar manufacturing output, the UK is using fewer robots in industry and aren’t able to achieve the same productivity levels. Not only are we using fewer robots, but we are lagging behind in terms of our productivity levels, arguably as a result of having lower levels of automation.