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UK Fintech News Round-up: The Latest Stories 14/07

Each week The Fintech Times takes a look at some of the top stories in UK fintech. This week, UK consumers trust banks with their money, but not with their data, The UK’s average pension pot stands at just £42.7k and ClearPay launch a new UK loyalty programme.

Manchester is well placed to give birth to more ‘unicorns’ 

More unicorn companies will soon emerge from Manchester’s rapidly growing tech ecosystem, according to software consultancy Codurance. Manchester is ranked fourth in the UK tech hub investment table, with £163million ploughed into the sector according to another report by Tech Nation and Dealroom.

Amelia Bampton, Regional Director of Codurance UK North, believes Manchester will soon add to the five unicorns it has already produced. “While it surprises me that there haven’t been more homegrown unicorns of late, I’m all too aware of the city’s incredible startup culture and its brave and bold ambitions to enhance its already world-class reputation as a thriving technology and business destination.

“With Manchester being such a burgeoning startup hotbed, there is bound to be ‘futurecorns’ that will emerge. While being incredibly challenging, Covid has undoubtedly created some positivity for digital delivery businesses, accelerating their impact.

“I firmly believe more unicorns will emerge. Investors are ready and following the progress of a whole host of startups across the city region.”

UK consumers trust banks with their money, but not with their data

Data Management

NetApp, has revealed that UK consumers trust banks to protect their money more than their data, with 80% of Brits stating that they feel their money is safe at their bank, but only 66% feel the same when it comes to their personal data. In a survey of 800 consumers across the UK, Germany, France and Spain, the research details that whilst convenience is crucial, security concerns and a dislike of AI-based services are barriers to technology adoption in the financial services sector.

“What we’re seeing here is that consumers in the UK want the convenience of online banking – they want services at their fingertips – but when it comes to dealing with financial decisions or answering important questions, UK respondents want in-person face-to-face services,” said Steve Rackham, Senior Solutions Engineering Manager, EMEA Global Finance at NetApp. “This suggests consumers don’t feel automated services such as chatbots of Robo-Advisors meet the level of service they require. It’s clear there’s much more innovation needed to build trust between UK consumers and automated financial services technology.”

The UK’s average pension pot stands at just £42.7k – 18% of the recommended total

A survey conducted by the personal finance comparison site, finder.com, has found that the average pension pot in the UK stands at just £42,651.

This figure drops even further for non-retirees, who only have £33,809 saved on average. One pension specialist recommending that someone retiring at 67 should have at least £237,000 saved for a ‘comfortable’ retirement*, this means that the average Brit’s pension stands at just 18% of this figure.

Zoe Stabler, an Investment Writer at the personal finance comparison site, finder.com, said: “The pandemic has been extremely tough for Brits in many ways, with a lot of people having to take unprecedented steps in order to stay afloat financially. It is understandable that some Brits have reduced, or paused, payments in order to direct money to more immediate priorities.

“However, if you are someone who has had to do this, it is vital that you look at replacing this money or at least starting to pay into your pension again. The power of compound interest means that what you pay in now could be a life-changing amount if you’re able to leave it for decades. 

Over half of businesses now have a policy on whether to pay out on ransomware attacks, says Databarracks research

US Organisations Hit by Ransomware Forced To Pay 171% Increased Ransom in 2020

New research by Databarracks has revealed 54% of businesses now have a defined policy in place to deal with ransomware attacks – whether this means paying a ransom, relying on insurance policies or refusing to pay at all.

The findings are from Databarracks’ 2021 Data Health Check. Running since 2008, the annual report surveys over 400 IT decision-makers in the UK on critical issues relating to cybersecurity, IT resilience, cloud and remote working.

Peter Groucutt, Managing Director of Databarracks, said: “Ransomware is the fastest growing threat we face. 29% or organisations were affected by ransomware in last 12 months, up from just 9% in 2016.

“It’s encouraging to see organisations being proactive, setting policies and taking steps to better protect themselves against ransomware. However, the fact almost a third don’t have a policy of any kind is a significant gap. Of those that do, there’s still a strong tendency either to pay the ransom if it’s cost-effective to do so, or rely on cyber insurance policies to cover the financial hit.

“Neither of these approaches are sustainable in the long run. Paying a ransom, even if the demand is relatively small, emboldens criminals to hit harder and more frequently in future. There’s also always the possibility you won’t get your data back after paying up.”

Groucutt concluded: “Instead of choosing the path of least resistance, organisations should take proactive steps to make themselves more resilient. If your policy is not to pay, you must have alternatives you can rely on. That means not only having backups and disaster recovery processes in place, but that they are tested, and you are confident that you can recover quickly.

“It takes hard work in the short term, but it is the only viable long-term solution.”

fidomoney Launches in the UK

fidomoney, an innovative fintech company offering bespoke business current accounts, has launched in the UK. The solutions fidomoney offer are based around the start-ups and small businesses it serves.

fidomoney recognises the individuality of its customers and offers business current accounts with all the additional payment services businesses need – a business simply chooses what works for them and only pays for what it uses.

“In these challenging times, it’s exciting to launch a new fintech solution for the UK Market, we are confident to fulfil our customers’ needs and exceed our customers’ expectations.” Paul Kenner, Head of Sales.

Two-thirds of UK financial services companies now use alternative data to improve decision making

Financial services companies in the UK are increasingly relying on web scraping alternative data sources, with almost two-thirds (63%) using alternative data to improve their decision-making process. This is one of the key findings from the Oxylabs white paper: ‘The Growing Importance of Alternative Data in the Finance Industry’, which reveals a huge rise in web scraping for alternative data over the last twelve months.

The findings highlight web scraping and financial transactions as the most common sources of alternative data for investors and financial services firms. This consists of ‘non-traditional’ data sources that have not previously been analysed, including app downloads and usage metrics, social media sentiment, website traffic statistics, search and other non-traditional data sources (senior staff hiring’s, corporate flight activity, supply chain).

Julius Černiauskas, Chief Executive Officer at Oxylabs, comments: “The huge increase in online alternative data sources has instigated a sharp spike in demand for web scraping services from financial services firms looking to overcome the challenges of the pandemic. At Oxylabs, we have experienced a threefold surge in inquiries from financial services firms over the last year, so we were keen to learn how exactly these organisations were approaching data gathering and analysis.

“Looking at the research, it is clear that financial services firms are increasingly harnessing alternative data to gain valuable, previously unseen insights into business performance, market trends and future investment opportunities. Those organisations that are data-driven will be able to quickly convert this valuable alternative data into actionable insights so they can make better strategic decisions in an uncertain post-Covid economy.” 

The UK’s average pension pot stands at just £42.7k

How retail relationship with consumers will change with bio metric smart cardsClearpay, a “Buy Now, Pay Later” payments provider, has announced the launch of its new loyalty programme, Pulse Rewards. The unique programme encourages responsible spending, by offering benefits to customers who make on-time payments.

The Pulse Rewards programme takes into consideration changes in Brits’ spending habits during the pandemic, as they increased their use of debit cards, built up savings, cleared debts and relied less on credit cards.

Nick Molnar, Co-Founder and Co-CEO of Clearpay said, “Until today, loyalty programmes across our industry have encouraged excessive spending – leaving no options for those shoppers who want to spend responsibly and avoid expensive fees and extended debt. We built Pulse Rewards to fulfill a need and offer a programme in which both consumers and retailers benefit. This approach is fundamental to our mission and values as a company to encourage financial wellness and power an economy where everyone wins.”

Ekstasy launches Starling Bankʼs latest integrated campaign  ʻHello Starling Bankʼ 

Ekstasy has launched a new campaign for Starling Bank, wanting to shine a light on the customer-centric humanity that is at the core of it all. In the ad, they have focused on Starling’s application process. Showing it off in all itʼs speedy do-it-just-about anywhere glory. The fresh fleet of creative adverts will appear out of home, radio and online and will run throughout Summer until the end of September. 

Mark Day, Art Director at Starling Bank said “ “Ekstasy’s collaborative approach has enabled us to promote our speedy onboarding process through the people we built our bank for have experienced it first hand, our customers.” 

Mike Saraswat, CEO of Ekstasy said “Strategically we wanted to focus on the humanity that is central to Starlingʼs banking products. People have busy lives and banking should not come in the way. It is there for them when they need it.” 

Author

  • Polly is a journalist, content creator and general opinion holder from North Wales. She has written for a number of publications, usually hovering around the topics of fintech, tech, lifestyle and body positivity.

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