Every Wednesday, we delve into the latest fintech updates from across the UK. This week brings updates from Vodeno, Zilch, finova, Ravelin and Clearpay.
Banks falling behind brands
Vodeno/Aion Bank has revealed that 52 per cent of 25 to 34-year-olds believe using financial products from their favourite brands is more convenient than banking with a traditional retail bank.
The same number feel brands offer financial products better tailored to their specific needs when compared to traditional institutions, Meanwhile, 51 per cent of respondents in the 25 to 34 demographic said they believe brands are making banking more accessible.
Kim Van Esbroeck, chief revenue officer at Vodeno, said: “Millennials and Gen Z are charting a new financial course, and increasingly relying on embedded finance products from their favoured brands for their banking needs. Our survey paints a clear picture as to why: convenience, tailored solutions and accessibility are the cornerstones driving this transformation.
“For brands, the case for embedded finance is clear. Not only can they offer their customer greater choice with different banking products, but in doing so they create a better customer experience with new revenue streams.”
Zilch Up launches to improve access to finance
Zilch, the UK-headquartered payments network, has unveiled ‘Zilch Up’ – a new product dedicated to empowering people typically excluded from mainstream credit. It hopes to create access for millions to build their financial profiles safely and responsibly and without paying any interest.
Zilch Up provides all the benefits of Zilch’s zero-interest, ad-subsidised borrowing with the ability to improve your credit score, which wasn’t possible before Zilch. With 5 million people in the UK deemed credit invisible, Zilch’s new product enables customers with tools to improve their credit scores and increase their credit limit.
Philip Belamant, CEO and co-founder of Zilch, said: “We need to strengthen the protections for consumers and increase access to interest-free and affordable credit – particularly now when the cost of living continues to hurt.
“For too long millions of people in the UK have had to struggle with limited or no access to credit due to thin and weak files. In a digital finance world, this is causing them the stress and crippling pain of funding unaffordable high-interest costs plus the danger of hard-to-understand late fees, merely to access credit.”
finova joins forces with Dashly
finova, the UK’s cloud-based mortgage and savings software provider, has partnered with Dashly, the 24/7 mortgage monitor, to enhance its broker proposition.
It has implemented Dashly into its Broker CRM, a suite of customisable mortgage tools designed to help brokers run their businesses more efficiently and quickly.
Matt Harrison, director of sales and broker and connect channels at finova, commented: “Over the past few months, the mortgage market has weathered rising rates and abrupt product withdrawals. At the same time, data from HMRC shows that property transactions have fallen slightly year-on-year, but the mortgage market is standing strong despite these pressures.
“Still, the fact remains: there has never been a greater need for brokers to respond to market changes with speed. To ensure borrowers remain confident in this market, brokers need tools that can work in the background to pinpoint the best products for their customers’ financial needs.”
Online grocery retailers hit by fraud
Online grocery retailers are being hit by a triple whammy of fraud as the cost of living crisis bites, according to a new report from Ravelin, the anti-fraud technology provider.
A key risk factor for most merchants in the sector is the rise of friendly fraud, which includes chargebacks, promotions and policy abuse by retailers’ own customers. Over a third of finance leaders describe first-party frauds including ‘friendly fraud’, as the number one risk factor facing their business. The rise in this type of customer-specific fraud is strongly linked to the cost of living crisis.
Martin Sweeney, CEO of Ravelin, discussed the findings: “The online grocery space has seen astronomical growth in recent years. Alongside this fast growth, we’ve seen a rapid rise in fraud impacting merchants operating in the sector.
“Grocery retailers continually walk an uneasy line between making compelling offers which entice customers to switch and protecting their business. The result can be large upswings in fraud and abuse which lead to avoidable financial losses, and increased demands on fraud investigation teams. Retailers can manage their risk exposure more closely by embracing automation.”
BNPL on the rise
Clearpay, the Buy Now, Pay Later (BNPL) firm, has revealed that 30 per cent of British adults used BNPL services to make at least one payment in the 12 months prior to August 2023.
BNPL emerged as the most popular among Millennials and Gen X, at 41 per cent and 36 per cent respectively. Seventy-eight per cent of all respondents said that the service helped them reduce the stress related to the cost of large purchases, while 65 per cent said that it helped mitigate the stress associated with festive spending.
Rich Bayer, UK country manager at Clearpay, said: “Fresh data like this is incredibly valuable for the future of the UK credit market, as it tracks the impact of the latest payment innovations. Thanks to BNPL, splitting a purchase over multiple payments no longer has to come with the stress of high interest rates or the risk of revolving debt. It’s no surprise that it has now become a preferred everyday payment option trusted by consumers from all generations.”