Pockit research shows 12% have been turned down for basic banking services
Two out of three believe Fintech sector is the most effective enabler of financial inclusion
Centre for Social Justice’s Baroness Stroud highlights “important issue for society as a whole”
Traditional banks’ application processes and regulation are among the biggest barriers to financial inclusion, costing the less well-off up to £1,300* a year and stopping millions from benefiting from improved budgeting and saving, delegates at a special summit on Financial Inclusion concluded.
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Around 250 experts drawn from traditional banks, investors, FinTech groups, challenger banks, universities, charities and advice groups debated the growing issue at the Financial Inclusion Summit in London sponsored by Bloomberg and Concentric, an investor in new challenger bank Pockit.
Keynote speaker Baroness Philippa Stroud, co-founder and Executive Director at leading think tank the Centre for Social Justice told the summit: “Financial inclusion is important for society as a whole because a considerable number of people in this country suffer from stress and worry because of debt.
“Technology has huge potential as an enabler in this space. It is frequently in the technology space that you look and find encouraging responses.”
Nearly one in five (19%) of delegates said traditional banks’ application systems were the biggest barrier to inclusion while 20% cited he impact of regulation on individuals and companies as a barrier to financial inclusion which aims to ensure financial services in the UK are accessible, easy to use and affordable for all. Currently more than two million people in the UK have no bank account.
Around two out of three delegates said Fintech companies are currently the most effective enablers of financial inclusion compared with just 33% who believe traditional banks are. Up to 83% say Fintech has a major role to play but needs to do more.
Virraj Jatania, CEO, and Co-Founder of Pockit, who was one of the key speakers, said: “The key to tackling financial exclusion is to understand financially underserved customers and developing simple and easy to understand products. Keeping the proposition simple is massively important.
“Above all financial education is vital to ensure that people are supported. We need the Government to help us and we need the financial system to be opened up, particularly around the payment structure and we also need the right regulation to adapt.
“It’s vital to let the financial services sector know that this group of people should not be overlooked. Everyone should be able to carry out everyday banking tasks in a manner that enables them to take control of their financial future without being penalised.”
Pockit’s own research shows up to 12% of adults had been turned down for basic services including current accounts, debits cards, and online banking in the last two years, effectively excluding them from money-saving tools such as Direct Debit and online shopping.
It offers an account open to everyone that can be used to pay in wages or benefits, as well as withdraw cash at ATMs. They are expanding their services to offer account numbers, contactless cards and Direct Debits, in the coming weeks.
Customers can fund their account with cash at over 28,000 locations across the UK, as well as by debit card and bank transfer. Setting up an account takes two minutes and costs 99p. For more details, go to www.pockit.com