New partnerships to open finance for good
On the day it announces its new name, Smart Data Foundry, formerly the Global Open Finance Centre of Excellence, also shares the news it has joined forces with Equifax, Sage Group, Moneyhub and FreeAgent to support its mission to open finance for good.
The Smart Data Foundry was born our of a collaboration between the University of Edinburgh The Financial Data and Technology Association (FDATA) and FinTech Scotland.
The freshly rebranded company just completed a project with NatWest Group, The bank de-identified data from over a million householders to study the impact of the pandemic on household finances. All of the data was de-identified and analysed by accredited researchers in the security of the Smart Data Foundry Safe Haven, operated by the Edinburgh Parallel Computing Centre (EPCC) at the University of Edinburgh, a controlled and secure service environment for undertaking data research.
Insights from the NatWest data were shared with the UK Government at the start of 2021 and continue to be updated.
The Smart Data Foundry will now focus on understanding the impact of the pandemic on SMEs. Working with Scottish fintech FreeAgent, Equifax and with Sage, they will research the causes and impact of late and slow payments to small and medium sized businesses. The insights will be shared and continually updated with the UK Government as financial behaviour adapts to the pandemic environment.
Commenting on the announcement, Smart Data Foundry’s Chair, Dame Julia said:
“We have started a movement within the financial services sector which is gaining momentum at pace. Driven by our purpose to improve people’s lives, our new name, Smart Data Foundry, better reflects the challenges we face.
“Today’s announcement charts the significant progress Smart Data Foundry has made to date in securing partnerships with these significant organisations which will enable us to unlock the power of financial data that, up until now, was not available for public purpose or common good.
“It is important not to underestimate the work that has gone into getting to this stage which includes data governance agreements to protect privacy. This headway, and the success of the NatWest Group partnership, paves the way for many other partnerships as we strive to improve the lives of ordinary people and support the resilience of the SME sector.”
Dame Julia concludes:
“The science community has shown how important health data was to manage the pandemic. Our aim is to do the same for the economy by providing financial data. However, our collaboration will reach beyond Open Finance as we look at other significant challenges such as climate data and the transition to net-zero, addressing the Poverty Premium and supporting the intersection of finance and health.”
Simon McNamara, Group Chief Administrative Officer at NatWest said:
“The pandemic continues to be challenging for many, and the impact is unique for each customer, household and business. By sharing data with Smart Data Foundry, organisations can collaborate to create better insights for the good of our communities so that we can better support their recovery. We have a crucial role, guided by our purpose, to support our customers and communities to get back on their feet and thrive”
Roan Lavery, CEO and founder of FreeAgent said:
“Sticking up for microbusinesses is really important to us and so we’re proud that the insights from the data will help to shape public policy to support SMEs, sole traders and contractors. SMEs account for 50% of the UK’s output. Part of the success of this project is down to the very supportive data community here in Edinburgh and in other parts of Scotland.”
Fintech DirectID Raises $3m in Bridge Round
Scottish fintech DirectID just completed a $3 million (£2.2m) bridge round led by Hong Kong based venture capital firm QBN Capital. The firm grew its team and revenue by over 100% in the last year and this investment will help them pursue their ambitious growth plans and expand internationally.
DirectID has developed a market leading credit & risk platform that powers some of the world’s largest brands through the use of Open Banking data.
DirectID provides unique insights into customers’ financial situation, enabling financial institutions to have a more realistic view of credit risk and to make faster, more accurate and personalised decisions.
Based in the UK, DirectID is connected to over 13,000+ bank which represents 1.5bn users in over 45 countries.
James Varga, founder, and CEO of DirectID, said:
“We are very excited to have QBN being our lead investor. This funding step will help us grow into more markets and sectors as open banking adoption grows across the world. We are addressing a global pain with our product, redefining credit risk for consumers and businesses alike.”
Philea Chim at QBN Capital said:
“We look forward to helping DirectID expand their business to Asia. Their credit risk platform will make SME financing fairer and more accessible. We see synergies between DirectID and a number of our portfolio companies and QBN’s own initiatives, for example, in supply chain trade finance.”
Scottish fintech helping poorest households access thousands in unclaimed benefits
Not for profit community lender Scotcash launches new online Benefit Checker, finds nearly three-quarters of users missing over £4000 per year they could be claiming
A new, automatic online service will help some of the UK’s 8 million financially vulnerable households which currently miss out on £16 billion in benefits they are due.
Not-for-profit lender Scotcash said its new benefits calculator, provided by Inbest, an award-winning fintech, will automatically compare the actual benefits people receive with the benefits they are entitled to, based on their specific circumstances and financial situation.
The calculator is integrated within Scotcash’s online affordable loan application process and notifies customers about any unclaimed benefits before guiding their applications. It will help people in households who are unaware of their entitlement, wrongly assume they are not eligible or think an application is too complicated.
The feature is already helping loan applicants to top-up their salaries with their benefits entitlement, reduce their bills, apply for smaller amounts of credit, repay their loans more comfortably, and build savings in the future.
Sharon MacPherson, CEO of Scotcash, said:
“Financial insecurity is expected to be a bigger reality for more people as a result of the end of furlough, increased utility bills and higher national insurance contributions so it’s more important than ever people claim everything they are entitled to. We are delighted to enhance our existing customer support with this much needed new service.”
Manu Peleteiro, co-founder of Inbest, said:
“We believe that partnering with companies that offer complementary services is the most efficient way to reach people that are missing out on their benefits. We are super proud of the impact that this partnership is making on Scotcash customers, so far we’ve identified that 70% of loan applicants were missing on average £465 each month on benefits.”
The impact is even bigger for households with children, who can claim additional benefits of £565 per month they currently don’t.
“Affordable credit can be a lifeline for people who have difficulty accessing mainstream sources, such as banks and building societies,” added MacPherson, “but Scotcash has always been more than just an ethical lender and determined to help customers build their financial well-being. If they don’t access the benefits they are due, people can end up in worse financial situations. We’re thrilled to see the immediate impact this calculator is having on our customers’ lives.”
DirectID and Doconomy partner on climate functionality
FinTech DirectID have just entered a collaboration agreement with pioneering Swedish impact tech company Doconomy.
Doconomy is an impact-tech company that uses the power of data raise awareness of the impact of consumption whilst offering solutions to reduce it. With Doconomy users can understand and drive positive movement to tackle climate change.
DirectID is the world’s expert in global credit risk enabled by the usage of real-time bank data. They tackle current problems found within the credit risk lifecycle:
- Affordability
- Income and account verification
- Emerging financial distress
- Spend categorisation & classification
Doconomy and DirectID have decided to partner to bring climate functionality to the masses, helping consumers make more informed decisions and encourage a more sustainable lifestyle.
This is another great example of how using bank data can help develop new innovative solutions beyond greater access to financial products.
James Varga, CEO of DirectID, said:
“As we continue to grow our reach and capability, having a trusted set of partners is critical to our future success. We are delighted to have signed this agreement with Doconomy.
“We are increasingly seeing new and diverse ways that bank data can support use cases across industry and sector. Using bank data to help us to understand business and consumer’s environmental impact is yet one more way that DirectID’s bank data expertise can support another tech company.”
Mathias Wikström, CEO of Doconomy, said:
“With DirectID joining us in shaping a new normal based on impact transaparency, we are excited to see additional opportunities for continuous development of tools in support of climate action. DirectID bring equal amounts of expertise and passion to the table and we are excited to team up on the most important challenge of all.”
Survey – FinTech Scotland Research & Innovation roadmap
Whitecap Consulting is supporting FinTech Scotland in the development of a ten-year research and innovation roadmap to support the growth of Scotland’s digital economy and the wider development of FinTech innovation across the UK.
This roadmap will build on the work of FinTech Scotland to date, and inform priority focus research themes and the unmet needs of consumers, businesses and society.
This survey will help us identify appropriate opportunities for cross-sector enablement of FinTech innovations to achieve the UK’s overall industrial strategy.
Take the survey
Thank you for your participation. Any answers you give in this online survey may be attributed to individuals or organisations within the report, however only with your prior approval.
Soar integrates Inbest to help loan applicants access their benefits
Today Soar announced a new feature to alert loan applicants of potential benefits and help them to track their entitlements.
In the UK in 2018/19, almost 8m low-income households were missing £16bn in means-tested benefits. The DWP estimates that 44% of those eligible for means-tested Job Seekers Allowance, 16% of those eligible for means-tested Employment and Support Allowance, and 23% of those eligible for Housing Benefit did not claim them.
Soar has integrated Inbest benefits calculator into its banking platform to compare the actual benefits that customers receive with the benefits they are entitled to due to their specific circumstances and financial situation. The service notifies customers about any unclaimed benefit and guides them on their benefits applications. This new feature will help loan applicants to top-up their salaries with their benefits entitlement, reduce their bills, repay their loans more comfortably, and build savings in the future.
Soar is offering this new feature on its Automated Lending solution to notify clients about their potential benefits entitlement when they make a loan application. Soar is also embedding the benefits calculator on its Banking Apps to help customers manage their benefits and ensure they are always claiming the right amount.
Andrew Duncan, CEO of Soar, said: “Soar’s platform reaches a wide range of consumers and we see Inbest as providing a fantastic opportunity for our clients to offer additional support to those not making the most of their benefits entitlement. We are helping our clients, often credit unions, provide additional ways to improve their customers’ financial well-being and there’s no doubt that this is one of them.”
Manu Peleteiro, CEO of Inbest, said: “We believe that partnering with companies that offer complimentary financial services is the most efficient way to reach people that are missing out on their benefits. We are delighted to partner with Soar to enable easier ways for people to learn about their benefits entitlements and access affordable loans”.
About Soar
Soar makes credit unions and community banks accessible and convenient for consumers with our white-labelled mobile banking platform that automates the handling of loan applications and makes access to affordable credit easy for everyone.
It’s a modern cloud banking platform for the fair finance market which reduces the cost of operations and includes mobile, web and cloud apps. It is connected to an ecosystem of other fintechs giving users access to secure digital messaging, payments, credit checks and open banking.
About Inbest
Inbest is a software platform that helps unemployed individuals or those in low paid or insecure roles to access their benefits entitlement. Inbest offers the widest benefits coverage in the UK and partners with FS institutions and welfare advisers to embed benefits advice into personalised customer journeys.
Inbest free white-labelled benefits calculator
Welfare advisers, affordable lenders and money charities have been at the forefront helping people to deal with the economic crisis caused by the COVID-19 pandemic. However, in many cases, their capacity to support people is restricted by their limited resources to build or purchase data & digital solutions to identify, reach and serve financially vulnerable customers.
At Inbest we are passionate about financial inclusion and we develop data & digital money management solutions that meet the specific needs of financially vulnerable people. For example, helping them to access their benefits, understand the level of support that disabled people need, or find the best debt solutions according to their personal circumstances and financial situation.
We believe that collaboration between companies with complementary skills is the only way to drive financial inclusion and ensure an inclusive recovery from the COVID-19 pandemic. That is why we are excited to offer our white-labelled benefits calculator free of charge to support welfare advisers, affordable lenders and money charities in their data & digital journeys.
Our offer
Welfare advisers, affordable lenders and money charities will be able to use our free benefits calculator to:
- Help customers: They can embed our benefits calculator across their digital assets (e.g. webpage, mobile apps, social media, blog posts) to help customers to access the support available to them with a simple, quick and user-friendly user journey.
- Understands customers: They will be able to use our data analytics application to unlock the full power of customers’ data to better understand their needs and behaviours.
Our free white-labelled benefits calculator also includes the following features and services:
- Widest benefits coverage of national, regional and local benefits in the UK – you can see here the benefits and grants we currently calculate.
- Data analytics application where you will be able to monitor the application usage and visualise the personal circumstances, financial situation and benefits entitlement of your customers.
- We will customise the benefits calculator according to your branding and will co-create content to help your customers to understand how they can make the most of their benefits.
You can check how Advice Direct Scotland and Capital Credit Union are already using our free white-labelled benefits calculator.
Email us at info@inbest.ai to explore this offer in more detail and discuss how we can help you to deliver data & digital solutions to drive financial inclusion.
About Inbest
Inbest is a software platform that helps unemployed individuals or those in low paid or insecure roles to access their benefits entitlement. Inbest offers the widest benefits coverage in the UK and partners with FS institutions and welfare advisers to embed benefits advice into personalised customer journeys.
Collaboration between Scottish fintechs FastP.A.Y.E and Inbest to support vulnerable employees
FastP.A.Y.E announced today that it has integrated Inbest benefits calculator to allow employees to make a benefits’ check within its flexible and ethical wage App.
This feature will allow employees in low-paid or insecure roles to learn about all the benefits and grants available to them before withdrawing income from their salaries. Employees will also be able to understand what they need to do to apply for their benefits and the organisations that can help them on their claims.
Ian Hogg, CEO of FastP.A.Y.E, said:
“As an ethical provider of salary advances, we recognise that a salary advance isn’t always the best option. Some may have outstanding benefits entitlement and in such circumstances we are delighted to be working with Inbest to guide employees to these benefits and avoid the need for an advance ”
Manu Peleteiro, CEO of Inbest, said:
“We believe that collaboration and specialisation are fundamental to reduce the amount of benefits unclaimed in the UK. We are delighted to work with FastPAYE to raise benefits’ awareness among employees on low-paid or insecure roles.”
Nicola Anderson, CEO at FinTech Scotland welcomed the initiative
“This collaboration between Inbest and FastP.A.Y.E continues to demonstrate the determination and focus from fintech innovators to find practical solutions that help support people facing financial vulnerability and address financial inclusion. Enabling easier ways for people to learn about potential benefit entitlements can offer an alternative to help maximise income and reduce longer term debt.”
Global open banking and open finance directory launched
“When I’m talking with people in the open finance community, the most common question I’m asked is whether I can recommend a company offering a certain service in a particular region. This directory is our answer to that need, helping companies connect and building awareness of what they have to offer.”
“When I heard about the new directory, I was very keen to be involved, and we’re delighted to be on the list for the launch. Open banking has come a fantastic distance in the last two years and this will be of huge benefit to anyone seeking to understand the players in the open banking and open finance world,”
“We want to encourage everyone in the sector to share their information and to make use of this free resource. As the directory evolves, we’ll be able to map the ecosystem, add more advanced search functionality and highlight some of the great case studies that are emerging,”
“With the open banking industry now fully emerging worldwide, it is invaluable to have all of the global entities together in a resource such as the Open Future World Directory. This platform will be extremely useful to experts, partners, investors alike and will provide a forward thinking space in which to share ideas and stay up to date.”
How fintechs are driving financial inclusion
In this guest blog, Magdalena Krön, Rise Global FinTech Platform Director, Barclays Ventures, takes a look some of the work that the global fintech community is doing to address one of the biggest blights in society ”“ financial exclusion. This blog is based on the latest Rise FinTech Insights, a regular publication from Rise, created by Barclays.
One thing that COVID-19 teaches us, if we needed reminding, is how many people across the world remain disadvantaged by not having access to basic financial services. Although efforts to improve financial inclusion have come a long way in a relatively short period of time, there is still much more to achieve, especially for the 1.7 billion individuals who are currently unbanked(1). The work being done in the fintech space to address this issue, intended to open doors for individuals and families in a way that many of us take for granted, has seen entrepreneurs deploy everything from cryptocurrency to Open Banking and APIs in efforts to find new ways to support the financially vulnerable.
Chris Britt, Co-Founder and CEO of Chime ”“ a leader in the US challenger banking segment that offers internet-based, fee-free services ”“ says, “There is a huge segment of America that has a lot of anxiety around their money and day-to-day finances.” Helping them achieve “financial peace of mind”, he says, starts with providing a banking relationship that doesn’t rely on fees. “As many as 70% of Americans live paycheck to paycheck ”“ we offer free services such as early access to paychecks and overdraft protection.”
Innovative fintech thinking has come to the aid of another swathe of US society: the 2.5 million newcomers to the country on long-term visas who are, for the most part, unable to access credit. Collin Galster, Head of Business Development at Nova Credit, identified a solution to this problem facing the US’s foreign-born population, which is set to rise to 50 million by 2030. The company, a cross-border credit bureau, transfers individuals’ financial histories from one country to another, remedying the issue of lenders not being able to access enough financial information to feel comfortable lending, and therefore enabling immigrants to start funding their futures.
The need to tackle financial exclusion is felt even more acutely elsewhere. In India, for example, almost 11% of the adult population is unbanked. The report highlights a number of successful government initiatives, including Jan Dhan Yojana and Aadhaar Pay, that are spearheading more accessible paperless Know Your Customer (KYC) identification processes and biometric-based identity payment systems. This is a tactic that saw the number of people holding bank accounts increase by just over 50% between 2014 and 2017. Manish Khera, Founder and CEO of HAPPY ”“ a digital lending app targeting a multi-billion-dollar credit gap in India’s micro businesses ”“ emphasises how the internet now plays a vital role in facilitating and widening this access, citing the fact that India currently has 520 million mobile internet users.
Alternative banking solutions are springing up elsewhere, too. In east Africa, for example, Anisha Kothapa, Fintech Analyst at CB Insights, says cryptocurrency is being “adopted widely” ”“ offering a new way for the unbanked to save money and complete transactions without needing an account or credit card. One firm leading the way is Kenya’s BitPesa, a digital currency payments platform that “allows users to accept bitcoin payments, exchange bitcoin for local currency, and deposit bitcoin into accounts or mobile money wallets.”
In contrast to developing countries, their developed counterparts are enabling financial inclusion differently by focusing on customer engagement and transforming the entire banking business model. FinTechs in developed markets are also moving from mono-line to multi-line offerings and re-bundling products and services to acquire more new customers.
It’s not just individuals that face financial exclusion, the report emphasises, but SMEs and budding entrepreneurs. According to Grant Bickwit, Associate at Barclays International, access to capital is one of the biggest challenges faced by entrepreneurs. It’s a sad truth, he explains, “that both entrepreneurs and investors are still reliant on individual networks and legacy processes for sourcing opportunities, entrenching geographic and social limitations”. In response to this, online platforms like OnDeck and Kabbage, launched in 2006 and 2009 respectively, offered firms access to credit digitally ”“ a trend that has proliferated.
Rise innovators have been responding to some of the other unique issues brought about by the pandemic, from employment to supply chain management. Rise Mumbai members, MMS.IND and GeoSpoc ”“ experts in geospatial information systems, platform-building, and consumer and micro-market data ”“ have joined forces to develop a COVID-19 impact tool which provides insights into how the pandemic is affecting consumers ”“ and enables businesses to better predict demand and ensure supply chain optimisation. Meanwhile, over at Rise New York, Brainceek, a workforce simulation company, has been helping corporates design virtual summer internship curriculums, providing extra support for the hundreds of thousands of graduates entering a difficult job market.
Addressing financial exclusion is a huge task, but one that is achievable, particularly with targeted collaboration across banks, technology companies and fintechs and a focus on achieving financial inclusion for those 1.7 billion individuals.
Download all editions of Rise FinTech Insights here.
(1) https://www.worldbank.org/en/topic/financialinclusion/overview