Every Wednesday, we delve into the latest fintech updates from across the UK. This week brings updates from Ebury, Visa, Which?, Legal & General and iplicit.
UK SMEs increase pace of debt repayments in 2023
Throughout the first half of 2023, SMEs saw net lending decrease by £5.3billion. New research by Ebury, the UK fintech firm helping to simplify international trade for SMEs, has shone a spotlight on the urgency with which businesses are now making debt repayments in the aftermath of the various COVID-19 loan schemes and the rising cost of servicing that debt.
The first half of 2023 saw the pace of repayments accelerate – reaching £5.3billion – as the cost of borrowing becomes increasingly problematic for businesses. Since 2021, SMEs have repaid a total of £21.4billion – 49 per cent of the borrowing taken on in 2020 to survive the effects of the pandemic.
Phil Monkhouse, head of sales at Ebury, commented: “The pandemic drove SMEs to take on an unprecedented level of borrowing in a bid to survive the economic shutdowns imposed to tackle the spread of COVID-19.
“Three and half years on from the outbreak of the pandemic, we are still seeing the ramifications of the financial decisions businesses had to take to keep the shutters open. SMEs are continuing to eat into the mountain of debt, yet the changing macro-economic environment has injected a fresh sense of urgency.”
Visa co-funds AI scholarships in Leeds and Loughborough
Digital payment leader Visa has partnered with the Department for Science, Innovation and Technology (DSIT) to co-fund data science and artificial intelligence (AI) scholarships for underrepresented students in postgraduate conversion courses at the University of Leeds and Loughborough University.
The moves comes as part of the UK government’s strategic AI skills scheme, launched by DSIT, and implemented by the Office for Students (OfS). The scheme aims to combat the shortage of skilled technology professionals and help the UK prepare for sustained demand for digital expertise.
Mandy Lamb, managing director for the UK & Ireland at Visa, commented: “Visa has harnessed the power of AI to fight fraud for over 30 years now. We believe that it can fundamentally transform financial services for the better, improving the financial lives and well-being of individuals, businesses, as well as the UK economy.
“As a result, it’s of paramount importance that we do all we can to nurture and develop skills and talent across topics such as coding, programming, and practical AI data science.”
UK households struggle to keep up with rising mortgage payments
An estimated seven million UK households (46 per cent) are struggling to keep up with their rent or mortgage payments, consumer champion Which? warns, with millions more at risk of falling into financial difficulty by the end of 2024 as they remortgage at higher rates.
According to Bank of England data, nearly half of all mortgage holders, around 4.5 million households, have already experienced increases in their monthly payments. Despite the Bank of England maintaining interest rates last week, 2.1 million households are set to see their fixed-rate deals finish by the end of 2024 – meaning millions more households could find themselves struggling to afford their bills.
Rocio Concha, Which? director of policy and advocacy, also commented: “It’s hugely concerning that seven million households are already struggling to keep up with rent or mortgage payments – with millions more set to remortgage at higher rates by the end of 2024.
“We’d encourage anyone who’s struggling to seek free debt advice and reach out to their mortgage provider or landlord for help.”
Over a third of people in UK struggle to handle end-of-life affairs
New research from Legal & General has revealed that 37 per cent of people handling the affairs of a deceased loved one have encountered legal or logistical difficulties.
Sixty-three per cent of those aged 16 to 24 disclosed that they have discussed death and end-of-life preparations with their loved ones – the highest percentage across all age groups; while 34 per cent of all age groups admitted to having avoided these discussions entirely.
Paula Llewellyn, chief marketing officer and direct MD at Legal and General, also commented: “Open and honest conversations about death are a crucial step towards securing your loved ones’ financial wellbeing.
“Our survey underscores the shifting attitudes of younger generations, who are leading the charge in embracing these discussions.”
Improved visibility of spend needed urges iplicit
Just 10 per cent of UK finance decision-makers currently have full visibility of spend across the legal entities of their business – leaving the majority struggling to see the bigger picture; research from accounting software provider, iplicit, has revealed.
With a clear need for improved visibility in the sector, 42 per cent of UK finance decision-makers also revealed they would like to have a better sight of spending across their business’ legal entities.
Paul Sparkes, commercial director at iplicit, commented: “Ensuring finance decision-makers have real-time visibility of spend across their business’ legal entities empowers them to exercise proper financial oversight, manage risks, allocate resources efficiently, and make informed strategic decisions. What’s more, is that it is a key driver for commercial success.”