Students from Glasgow University FinTech Society tackle consumer vulnerability through Design Thinking
The economic landscape within which financial services operate is changing at a dramatic pace. The population is getting older, more complex financial products are available, home ownership has decreased, internet is now widespread but still some people never use it.
As a result, the Financial Conduct Authority (FCA) recently highlighted how over the next few decades the number of consumers in vulnerable circumstances will rise dramatically. Therefore, the archetype of the typical consumer’ ”“ the one that makes rational decisions on the basis of a comparison between costs and benefits ”“ on which consumer protection policies and financial products are based should be abandoned in favour of a more inclusive and realistic paradigm which takes into account non-standard needs.
This picture of the future prompted a discussion, here at Glasgow University FinTech Society, and we came to realise, thanks to the pivotal contribution and guidance from Nicola Anderson (”‹Strategic Development Director at FinTech Scotland”‹), the need for running an event that made students aware of consumer vulnerabilities and the opportunities that technology offers to design financial services in a more inclusive and accessible manner.
We thought that the most effective way of doing so was to organise a workshop which could allow students to learn by experience what vulnerability is, how it affects consumers and financial services, and what the latter can do to tackle this.
We came up with a two-day-long workshop centred around the use of the Design Thinking method. Various teams of students will have to find a solution for a consumer vulnerability issue with the aim of driving social impact by analysing future vulnerabilities and designing products and services for the future, which will make a difference to real people today. All teams will have to pitch their ideas/solutions in front of a panel of judges at the end of the two-day session.
After hearing our President, Elisabetta Trasatti, and Vice-President, Andreea Musat, present this idea at the December FinTech Consumer Panel (launched by FinTech Scotland in September 2019) some of its members enthusiastically welcomed our endeavour and offered their support. Coming from a vast range of sectors, among which regulatory bodies and charities, they helped shape the challenge during the past few weeks and will be part of the judging panel at the event.
It has also been of great importance the cooperation with Adam Smith Economics Society, one of the oldest student societies at University of Glasgow. Thanks to the collaboration of President Leon Zussner and his team, we have been able to reach a wider audience and we managed to organise such an important event.
Our “Make Financial Services Work” event is scheduled for February 20”‹ and 21”‹ and it will be held at Tontine, the business incubator of Glasgow City Council, located in Glasgow’s Merchant City.
Advice Direct Scotland call for data and tech experts
Advice Direct Scotland is starting the New Year with a continued sense of purpose and ambition and the team are keen to engage with data experts and technology experts to help. This is a call for input and help that we’re pleased to support.
We don’t know what we don’t know, but we do know technology could help!
Advice Direct Scotland is a citizen centric organisation that serves Scotland’s population by offering practical help and advice across a huge range of issues.
We have over 700,000 contacts with citizens and consumers across the UK every year and the majority of these are with people in Scotland.
We are interested in using technology both to interpret the data we have, and to gain an understanding of the data we hold that is currently not used to measure impact and outcomes.
Our data resides in our Salesforce orgs. This data contains information from traditional telephone calls, web chat, social media, email, and online engagements. Data Lab is currently assisting us in interpreting the data, and to highlight areas where we may want to focus resources.
Areas of specific interest include:
- Creating an app linking debt/money with wellness. For example sharing improvements in income and expenditure on a regular basis to motivate individuals, but also linking people with local opportunities to improve, perhaps, their fitness, or access to activities for their children. This could also include local offers to save money, and top tips for improving financial management. We believe such an app could improve mental well-being and allow individuals and families to effectively plan their finances over time.
- Use technology to highlight those customers in particular financial stress before issues become unmanageable or adversely affect family life.
- Look at our engagement with personal data stores and see if they can either be improved or replaced.
- Further automate our debt/money journeys to encourage engagement and reduce our costs.
- Look at all of our data (including our general service, our consumer service, our debt service, and our energy services) and create a map highlighting where our services are in demand and where our impact is limited. This will allow us to focus resources on engaging with those audiences who have to date not sought advice and information from us.
We don’t know what we don’t know. We’re always looking to increase our effectiveness and are keen to connect with technology companies and universities that can assist us in our role of connecting advice and information with the people who need it, and then utilising this data to drive policy and effect of outcomes both for the customer and for other stakeholders such as the Scottish government.
If you’re interested and happy to work with us to try and progress positive change for citizens we’d really like to hear from you. Please use Fintech Scotland contact us page if you’re interested.
Ethical finance extending the reach
The Scottish Government become signatory (21/22nd September) to UN Principles of Responsible Banking joining a third of the global banking system ($47 trillion worth of assets)
It is impressive that the United Nations has secured so many signatories to the Principles of Ethical Banking.
My plea is that Scotland provides a special “Scottish” addendum and extends the principle of ethical finance to include positive action for the unbanked, near prime financial and credit excluded population in Scotland
In October Global Ethical Finance Initiative acted as pacesetter bringing together UN Multi-faith global power roundtable and a conference dedicated to ethical finance with a global reach.
It is encouraging to see leadership from the Church of England and Islamic Bank collaborating to spread and scale faith centred ethical standards in banking Scotland has a long been recognised as a champion of ethical finance. Gremlin Bank (bank for the poor) founded by Mohamed Yunis, more recently Castle Bank Co-operative in Edinburgh support for low-income families and MoneyMatiX community approach to teaching children and families to manage money (and debt) are just a few examples
It is against a backdrop of a long historical tradition in democratic banking serving the poor and rich alike that the vision emerged of a Scottish Investment bank. The vision is nearing reality as the Scottish Investment Bank bill proceeds through parliamentary processes. Central to the bill is a remit to include equality impact assessment ”“ focusing on ethical investment for inclusive growth. Linking the establishment of the Bank to the Equalities Act (2010) is inspired. Ensuring the needs of people who share one or more of the protected characteristics are met is exactly what is needed to provide inclusive growth.
I would ask that we open the debate under the auspices of Fintech Scotland to extend the provision of the Scottish Investment Bank to include fintech mobile innovation as a means of extending the reach to those who are unbanked or “near prime” (not able to access credit due to minor infringement of credit ratings)
I travel with hope in my heart that Scotland will be the first country to aim for zero unbanked. Adopting SDG’s as key drivers of Scottish policy and acknowledging that wellness sits at the heart of an economically vibrant country is pretty good stuff.
As Founder/CEO of Women’s Coin (digital currency of social value) I believe that adoption of ethical financing at Corporate and SME level extending the remit to include digital innovation, tokenisation, and local currencies will accelerate the spread and scale of adoption of SDG’s (UN Strategic Development Goals).
There has never been a more critical time for ethical financing and ethical leadership across all sectors Public, Voluntary, Charitable, Corporates and SME’s
Scotland can really set the pace, the vision and has the know how to create an inclusive society that fosters wellness as the key to economic vitality
Blog written by (Prof) Christine Bamford, Founder/CEO of Women’s Coin
#MorePowertoher #fintechscotland @finance4change @modulr
womenscoin.com
voluntier.co.uk
globalethicalfinance.org
Will the growth in fintech innovation be the solution to tackling one of society’s big issues? Financial exclusion
Homeless, no address, unemployed and no bank account ”“ the future is bleak
2 Million without a bank account. Between 10-14 million “near prime” adults have no access to credit, despite minor blemishes on credit history or can only access credit at high APR 29.9-39.9%
There is an urgent need to open access to financial services for those without an identity and are homeless. or on low-pay income. It isn’t just the homeless but families managing on low incomes where one bill too many pushes them into debt crisis ”¦. into the hands of loan sharks or high APR pay day loans and a continuing spiral of debt. If wellness sits at the heart of Scottish Government policies and values ”“ then we need to recognise the impact of debt, low income, lack of access to credit and insurance as key impact measures on mental wellbeing
Fintech Scotland range of innovative solutions, mobile payment systems, education, blockchain, crypto-currencies, wallets, tokenisation of voluntary work open the opportunity to create an equal and more inclusive society. Mobile friendly approach to Identity secured through biometrics, face recognition, top up payment cards/mobile payments are now able to provide evidence of credit worthiness. This is a modern pathway to a bank account, credit worthiness, access to insurance, credit and a verifiable credit rating.
March 2018 The Mexican Congress approved Fintech Law that aimed to regulate electronic payments, crypto currencies, crowdfunding and open banking. The fintech Law promotes innovation in the financial services industry, stimulates the growth of new business models and reduces entry barriers for Fintech firms. Fintech Law can significantly improve Financial inclusion. Fintech Scotland has taken a non-regulatory approach to supporting financial technology innovation. But the impact possibilities are with us now to work with traditional financial service to provide a integrated solution to financial exclusion. Scotland is on the brink of providing a “world-class” solution to inclusive growth through financial digital solutions creating the link between wellness and economic vitality
Blog written by (Prof) Christine Bamford, Founder/CEO Women’s Coin
Acknowledgement to PWC blog and report
www.womenscoin.com #MorePowertoHer @ChrisBamford12
Money Advice Scotland is looking for help bring technical solutions to the debt advice sector.
Photo by Sharon McCutcheon on Unsplash
Money Advice Scotland is seeking support and collaboration to help bring technology aids and solutions into the independent and impartial debt advice sector. They’ve published a call for help and want to hear from anyone (fintech’s, financial services, investors or others) who’d like to collaborate and partner with them to augment the impartial debt advice sector through greater use of technology.
Simply put the ambition is to radically improve the current financial health and wellbeing for people by using data and technology to understand and solve debt problems.
Money Advice Scotland is Scotland’s national organisation promoting the development of free, independent, impartial, and confidential debt advice. It’s been working in the debt advice sector for 30 years and includes approx. 150 members including Local Authorities, Citizens Advice and other organisations providing debt advice.
Collectively they all strive to deliver and challenge for citizen financial inclusion. They support those in need at particularly vulnerable and difficult times.
What they need are tools to help build efficiency into the start of the debt advice process.
They’re looking for solutions that will help advisers quickly and efficiently assess a client’s holistic debt position and understand if there are options for clients to increase income and save money. The emphasis is on gaining a holistic’ view as quickly and as accurately as possible.
Currently there are some examples where it can take up to 14 weeks or longer to get a holistic view of a clients circumstances. This time frame often exacerbates the problem and can limit the debt solution options.
Income matters
The ability to analyse income and expenditure both matter but income really matters.
For advisers to provide best advice they need an accurate view of income. It may feel like an obvious point but some debt solutions will not be available or appropriate for some clients and it can be dependent on source and type of income.
Technology alongside people
Technology can be a powerful enabler for the sector, to allow advisers to spend quality time supporting people and discussing options before issues become bigger problems.
FinTech Scotland is confident that technology along with the will within the fintech, tech and financial services industry can help this important sector. It aligns to our work on consumer financial inclusion and we’re delighted to support Money Advice Scotland on its initiative.
Please get in touch with Money Advice Scotland or FinTech Scotland if you think you can help.
Can technology help the crucial impartial debt advice sector?
Photo by Alice Pasqual on Unsplash
The first blog in a series connected to FinTech Scotland’s consumer inclusion work. Nicola Anderson shares her reflections on work we’ve been doing with the impartial and independent debt advice sector. There is no doubt technology and fintech can play a role in the future of this crucial sector and we’re keen to support more collaboration and finding ways to build needed solutions.
Recent research and studies have found that 51% of consumers run out of money before payday; 23% report they are finding it difficult to manage; one in five consumers have no savings and almost 16% of the population can be described as over-indebted.
Recognising demand for debt advice services is rising, we invited representatives from a range of debt advice agencies and Scottish Government to discuss the current problems facing the sector and the potential for seeking technology-based solutions to practically improve the experience for those both providing and receiving debt advice.
Working collaboratively and across sectors the aim of the initiative was to identify priority issues that, if addressed through technological developments, would benefit the debt advice sector, building efficiencies and putting users at its heart.
The input from these experts has shaped three main problems and we’re pleased to share details of these in this blog. Of course, the next stage is to find solutions for these issues! Ever the optimist I’m hopeful that collectively we can do that, starting with sharing what this vital sector thinks its main problem are!
Unanimously, the experts agreed that the problem top of their list was the sectors limited ability to access available data efficiently or to its fullest extent. They shared examples where it can often take weeks to have a fully verified understanding of a clients circumstances, due to time consuming nature of the range of data and documentation checks needed to verify the position. Understandably this can exasperate the stress for people but in addition there can be circumstances where it also can limit the appropriate options for debt advice solutions.
Second problem held by the experts in the room was that current debt solutions and repayment plans are inflexible and do not reflect the reality of people’s lives – which exacerbates problem debt. Current solutions, more often than not, seem to force people into a set date repayment plan with little of no flexibility to reflect the fact that income could be variable or paid at different points each month. The view in the room was that there seemed to be little room for flexibility once a plan was in place and there was a general desire to see all creditors think about the benefits of greater flexibility in repayment plans not just when someone enters a problem debt scenario.
The third problem centered on the lack of pre-emptive engagement options to enable earlier intervention in a developing debt scenario. Experience shows that general recognition of the tipping point’ into problem debt is poor, increasing in the numbers of people moving from debt to problem’ debt scenarios. The inability to recognise the tipping point’ happens across a range of vested stakeholders including, Consumers/Citizens, Financial Organisations and Statutory bodies.
Money Advice Scotland in particular, are hopeful that technology solutions plays a key role in the debt advice sector of the future and have plans to work with FinTech Scotland and the fintech community to help develop and raise further awareness on financial inclusion issues impacting today’s society.
The insights coming directly from the experts who work with people at the heart of this issue are invaluable. Are there any quick wins available to any of these issues ”“ we’d love to know!
In the meantime, thank you to all those who shared their views, its good to know the debt advice sector will continue the focus on this initiative.
New research to improve affordability assessment
The University of Edinburgh, Afterbanks and Inbest are collaborating on a new research project that aims to develop new methods for affordability assessment. On the one hand, they will explore new statistical frameworks to take into account the changing nature of consumers personal circumstances, financial situation and behaviours. On the other hand, they will leverage on Open Banking to not only asses whether the credit is affordable at the point is taken out, but also throughout its whole life.
This research follows the new FCA regulation that makes mandatory for consumer credit lenders to include an affordability assessment (i.e. estimate borrower’s ability to undertake the credit commitments without incurring into financial struggles) into the wider consumer creditworthiness analysis.
Raffaella Calabrese, Associate Professor at University of Edinburgh Business School, said: “The affordability assessment is not only different between borrowers, but also changes in time for the same borrower when new relevant information is available. By introducing a dynamic time-series analysis we expect to increase the accuracy and robustness in the affordability prediction.”
David Lozano, CEO of Afterbanks, said: “Our platform provides financial data to grant over 30,000 personal loans per month in Spain, and this project is an unparallel opportunity to adapt our data platform to the UK market and regulation. We are also excited to become part of the Scottish Fintech Ecosystem, hand in hand with the University of Edinburgh and Inbest”.
Manu Peleteiro, CEO of Inbest, said: “We are delighted to strengthen our partnership with the University of Edinburgh. Our ongoing collaboration has become a source competitive advantage, and the IP we developed helped us to secure projects with large financial providers in Spain. We are also thrilled to welcome Afterbanks – one of the fastest growing Fintech companies in Spain – to the Scottish Fintech ecosystem”.
About Afterbanks
Afterbanks provides a platform to securely access banking data and initiate payments in real time. Our platform provides access to all banks in Spain and the largest banks in Portugal, Italy and Mexico. It is used by dozens of third-party applications and makes over 100.000 conections a day.
About Inbest
Inbest is a data analytics platform that automates the financial planning process by gathering and analyzing customers’ personal financial information. Inbest enables financial institutions to provide financial products and services to help their customers to manage their day-to-day finances, have the right protection coverage and plan for their life goals.
Finchat”¦ Can fintech alone fix financial wellbeing?
From savings and investments, to utilities and insurance, fintechs can help consumers in many ways, such as switching their energy provider and signing up for an insurance policy within their banking provider’s app, as well as having access to personal spending analytics to gain a better understanding of your financial health and circumstances.
This is very true for many people, but what the wall of sound often fails to mention when it discusses how fintechs can help people manage their money is that there are many people for whom these new tools offer very little in their circumstances.
An American study reported by The Financial Brand mentioned a lot of interesting findings about how so-called “finhealth” (new sub-brand dubbing of fintech, specifically products and services to help people manage their financial health) could help Americans save cold, hard, after-tax cash – specifically, $2,000-$3,000 on a median income of $45,000.
Is fintech for the few or the many?
Fintech alone however, cannot be the sole saviour of people’s financial health – there’s just too much disparity of wealth and poverty in our society to think that a personal finance management app can solve it all.
Money management tools, or personal finance management apps, are fantastic and give that little bit of extra insight into your finances, but they’re not much help when you’re budgeting on the pound coins in your pocket rather than any cash in your account.
The challenge with these offerings is that they’re for people who can afford to save – when you’re on the bread line, we need more intervention and greater societal change to help those most in need.
There’s no doubt in my mind about the potential positive effects fintech, or finhealth, could have on those who are privileged enough to benefit from their services, but fintech isn’t the end-game – it’s a targeted enabler, not a ubiquitous elixir.
The awesome Jim Marous quotes another great, Ron Shevlin, in discussing the article in The Financial Brand:
“If we’re willing to pay $5 for a flavored latte, it’s not inconceivable that we would pay $5 for a finhealth product or service.”
And the study mentioned above also makes note that 30% of Americans have too much debt to handle.
The thing is, those who are spending $5 for a flavoured latte are not those who need the help the most, and they’re also not those who have too much debt to handle.
Fintech can only enable. Bigger changes are needed
Fintech cannot do it alone when there are huge socioeconomic issues surrounding poverty, homelessness and financial inclusion.
It’s not just about complex and cyclical issues like fees being leveraged on the poor to enable financial institutions’ revenue models. There is a tax on the poor and that tax is simply the negative balance on the things they cannot afford after income.
But maybe there’s a place for government initiatives and corporate social responsibility? Maybe we could provide free products and services to those below an earnings threshold to help those most in need?
Maybe we could look at credit scoring and determine good character on low incomes to allow favourable rates rather than penalising the poor for being poor? A great example of a company trying to change the way we see credit is Castlight Financial whose CaaS (Credit as a Service) offering and Affordability Passport have the potential to significantly change how people are assessed for credit.
Castlight analyse real-time spending patterns and connect directly to your accounts ”“ rather than a monthly report on irrelevant data like how many accounts you have open!
It behoves us to check our privilege when discussing fintech – it has huge opportunity but we have to make sure societal change maintains pace against technological advancements and we design in inclusion and accessibility at every step, or we risk increasing the divide instead of closing it.
Can fintech help mentally incapacitated people?
This blog is written by Sandra McDonald; she was Public Guardian for Scotland for 14 years (2004-2018). The Public Guardian is a statutory regulator, supervising and supporting those who administer the affairs of persons no longer mentally able to do so personally.
As fintech firms continually develop new solutions to improve the way people deal with their finances, it is important for them to keep in mind that their users can have very diverse needs. When designing innovative solutions it is vital to consider things such as power of attorney or capacity assessing.
Equally, disruption in the way mentally incapacitated people can access money is still to happen and provides a great opportunity for nw entrepreneurs.
We’re looking at some issues fintech should consider:
Power of Attorney
Power of attorney is perhaps the best known legal method by which one person is authorised to administer the affairs of another; yet I hear criticism regularly about Organisations not truly understanding power of attorney. Indeed I have experienced this personally when an Organisation was insistent that my brother and I must both sign a particular document, despite the fact that we are appointed jointly and severally.
Their systems just couldn’t cope with this specific case.
Equal Treatment for Persons with Mental Incapacity
Persons with mental incapacity are persons with disability and thus must not be treated less favourably than a person who does not have incapacity. Yet often I see a higher bar’ to be met for those administering another person’s affairs than would be the case if they were managing their own affairs.
Capacity Assessing
Organisations, for ease, tend to categorise people as either capable or incapable but capacity is not black or white. It is not linear or on a continuum; it can fluctuate be this over time or over decisions.
Can new technologies such as AI help identify levels of capabilities and offer appropriate support?
Convention on the Rights of Persons with Disabilities
Deciding whether someone has capacity or not at a given time, for a given decision, will become ever more pertinent as the United Nations Convention on the Rights of Persons with Disabilities requires us, Scotland, to allow persons with incapacity to exercise their own legal capacity ”“ sounds counter intuitive but comply we must. We must allow persons with incapacity to participate, as far as is possible, in decisions that affect them. Most frequently you will be familiar with attorneys advising what is best for the person they represent and respecting this, but this puts both the attorney and the Organisation in breach of the United Nations requirements. Are you confident that you support the incapable person in their own decision making? What if you felt what the person themselves wants is at odds with what the attorney is asking you to do. How do you manage such conflicts?
Digital Access?
I often hear about technological inadequacies ”“ for example a system only has the option of listing a person as power of attorney’ which, if they have some other form of authority, may offer them a higher level of access than thy have authority for. This exposes you to a claim if the person then abuses the erroneous wider powers you have given them.
Future
These are todays issues but a review of the law is in progress; are you in danger of just getting up to date as it all moves on? What should you do to prepare yourself for tomorrow?
Ethical Finance 2018: Regaining Trust and Demonstrating Impact
Growing awareness of UNSDGs, sustainability, climate change and social justice issues, combined with concerns around trust arising from the 2008 financial crisis, have raised questions around the integrity, transparency and accountability of financial institutions and driven consumer expectation for finance to be social cognisant.
UKIFC in partnership with Responsible-Investor.com present a brand new conference, titled Ethical Finance 2018’ in Edinburgh on October 22-23, hosted by RBS and supported by the Scottish Government, HM Government and UNDP.
The aim of the conference is to gather banks, asset managers, faith-related investors, mission-driven endowments, charities and family offices together to look at practical solutions to promote trust in banking and investment and create long-term, sustainable finance solutions.
It will explore how trust in a sustainable economy can be revitalised, and how faith and endowment investors are confronting today’s biggest societal and economic challenges, notably as part of the United Nations Sustainable Development Goals (SDGs).
Topics on the agenda include:
· How do endowments, family offices and philanthropic entities use values and purpose as investment strategies
· How are faith groups ensuring their assets are managed according to the purpose
· The UN Sustainable Development Goals and the practicalities of investing
· Measuring impact across different asset classes
· The move from negative screening to positive investment
· Direct impact investing in developed and emerging markets.
The event will include a reception at Edinburgh Castle hosted by the Scottish Government.
The programme for the conference and further information can be found on the event site and by clicking for the programme and further info via the Register button.