Fintech is actively making the world a better place by solving real problems that prevent people from accessing needed banking services. We take a look at what fintechs in the UK are doing to make banking better for everyone. In our podcast we examine why UK fintech is so effective at being a force for good in the world.
Why Does it Matter?
1.5 million adults in the UK are unbanked. We’re ninth in the world for banking inclusion. Those are some surprising statistics when you consider that holding a basic bank account in the UK is free at point of service. However, only around half of those 1.5 million adults seem to even want an account.
Fintechs are identifying customer pain points and figuring out ways of alleviating them. Encouraging the unbanked to engage with the financial ecosystem this way is a great method of increasing consumers financial literacy and use financial products.
There are about 2 billion people in the world who are unbanked and without formal financial services. So there’s a considerable number of potential customers out there. Some fintechs have grabbed at the low hanging fruit early and managed to snag a huge number of customers. But there are plenty more to cater for.
Education, education, education
It might be a pithy political sound bite, but it’s also something direly needed when it comes to financial literacy. Individuals tend to spend with instinct rather than carefully planned decisions. From this there’s a real need to change motivations behind financial decisions so they make ones that are healthier for them.
Part of the challenge for any fintech looking to boost financial inclusion is getting customers to understand how financial products can benefit them. Sometimes this comes down to people not understanding their financial statements. In that case financial literacy is an issue of removing jargon and simplifying language. There’s a strong sentiment in the fintech community that financial literacy should be included in schools. But as that’s not happening any time soon, what else can fintechs do to improve financial literacy? Listen to the One Fintech Nation epsisode to find out!