Research & Innovation opportunity in Open Finance data

Article written by Julian Wells, Director at Whitecap Consulting

FinTech Scotland recently published its 10 year Research & Innovation Roadmap. Whitecap worked in partnership with the FinTech Scotland team to support the development of this roadmap, and is discussing the key outputs in a series of blogs. This blog focuses on Open Finance data, which is one of the four key strategic priority themes.

In the first blog in this series, we discussed the purpose, value and impact of a Research & Innovation Roadmap. In this blog, we discuss Open Finance data which is a strategic priority itself but also a facilitator of FinTech innovation in wider areas, and an enabler for the three other strategic priority themes in the Roadmap.

The other three themes are Climate Finance, Payments & Transactions, and Financial Regulation, each of which will be the subject of a subsequent blog in this series.

Open Finance data has the potential to significantly change consumers’ and businesses’ engagement with finance, and to deliver better outcomes. It spans the whole suite of financial products and services as we understand them today, including banking, savings, mortgages, pensions, investments, insurance, lending, and payments.

How can Research & Innovation support the development of Open Finance?

To help Open Finance achieve its potential, more leadership, actionable research, and innovation is required. FinTech Scotland’s Research & Innovation Roadmap sets out specific actions to help drive this opportunity ”“ through a collective approach that involves industry, innovators and researchers ”“ to create the future of finance.

Open Finance can create progressive change that will move the UK forward significantly, by moving beyond banking and asking other financial institutions (such as pension providers, asset managers and insurers) to enable customers to share their data with others.

This would open up a wider range of financial products and services to the transformative impact of third-party innovation through trusted data sharing. For consumers and businesses, it offers new ways to understand their finances, receive financial advice, and compare financial product features and prices.

Research and innovation are needed to facilitate the potential of Open Finance data, building economic growth and creating employment opportunities in high value sectors which in turn will make the UK an attractive destination for inward investment.

Furthermore, it will help us better understand, measure, and forecast the considerable impact that Open Finance could have on society and to shape future policy.

In the UK, one of the key enablers of research and innovation in Open Finance is the Smart Data Foundry (formerly The Global Open Finance Centre of Excellence), which has been established in Edinburgh to support the understanding and development of the capabilities of Open Finance. It has a leadership role in enabling the necessary research and innovation, and building confidence in Open Finance across the UK, and can encourage research and innovation by providing a highly secure environment that can host Open Finance data. The Open Finance data priority in FinTech Scotland’s Research & Innovation Roadmap supports and complements The Smart Data Foundry’s agenda.

Priority areas in Open Finance data

When developing the Roadmap, analysis highlighted three industry priorities that will benefit from more focused research and innovation on this topic. They involve shaping the future of:

Everyday personal banking and business banking

Insights through Open Banking data
Future banking business models

Long-term savings and investment

Financial resilience and wellbeing
Future living & the ageing population

Personal and business insurance

New data and insights for insurance
Data privacy
Data ethics and governance

Roadmap next steps: Open Finance data

A range of proposed next steps are laid out in the published report, which specifically identifies 22 actions relating to Open Finance, and categorises each into one of three phases over the next 10 years. These actions are illustrated in the graphic below. the report also references 23 different stakeholders who can support the implementation of these actions, which are broken down into research projects and innovation calls.

New business models in open finance to be analysed and judged.

Open Future World has launched a prestigious startup pitch competition to reveal some of the most interesting emerging business models in open banking and finance.

Six finalists will receive a complimentary ticket to the Open Banking World Congress in Marbella, Spain, on 24-25 May, where they will present their proposition to an all-star judging panel of industry experts, VCs and investors.

In addition, they will be interviewed on a live-streamed chat show to over 3000 viewers delegates from around the world attended. The winner will be announced at the evening party on the convention’s first day and will get to pitch on the keynote stage on day two of the conference.

“The last two years have been a hotbed for innovation in open finance. I come across so many impressive startups every week. Every one of them is harnessing open finance to transform the customer experience and make real improvements to our everyday lives.

The Open Banking World Congress will assemble leaders at the forefront of open finance from around the world into a dedicated setting over two days of keynotes, networking, discussions and collaborations. By bringing together new startups and seasoned open banking professionals, we hope to help enhance the potential of open finance and give promising startups the best chance of success.” says Marie Walker, Co-Founder of Open Future World.

To qualify for entry, startups must be in the open finance domain, be less than 3 years old and have received less than 3 million in investment.

Entries are open until 15th April with the 6 finalists to be announced on 22nd April.

To enter the free competition:
https://www.openbankingworldcongress.com/pages/startup-pitch-competition For all enquiries, please contact: georgina@openfuture.world

Open Future World
The leading source of information on progress in open banking and beyond. The Open Banking World Congress takes place in Marbella, Spain between 24-25 May.
https://www.openbankingworldcongress.com/

DirectID grows commercial team

Scottish fintech, DirectID, just announced seven new hires. The fintech is already present in many markets and with those hires, they are looking to further this expansion. This announcement comes after the firm announced the completion of a $3M bridge funding round led by Hong Kong based venture capital firm QBN Capital.

Here are some of the new joiners:

Nicholas Tuttelberg – Director of Business Development.

Specialist of credit risk and customer decision management solutions in the Financial, Retail, and Telecommunications industry. Nicholas’ last role was at Experian and also worked at TransUnion, Reunert Group, Nedbank, and Standard Bank.

Based in Cape Town, South Africa, he will drive the business growth for Africa.

Damiano Cracolici – Director of Business Development.

Damiano is an expert in deploying and enhancing data-driven business processes and solutions across the credit and risk lifecycle. He previously held roles at TransUnion, FICO, and Experian. Cracolici is based in the UK and will take point on DirectID’s insurance sector clients.

Betting on future talents

DirectID also hired four sales graduates to their commercial outfit through the IT Technical Sales apprenticeship training programme at Pareto Law. Through Pareto, the team of Business Development Executives will continue to build upon their learning and development, while gaining invaluable hands-on experience in their employment at the rapidly growing fintech.

The graduate team will be led by Lee Sansom who also joins the business from Experian, bringing with him over 10 years of experience in business development with B2B SaaS providers.

Clare McCaffery, Chief Commercial Officer at DirectID, said:

I am delighted to be joined by such a prestigious group of colleagues. Having worked with both Nick and Damiano previously I know our growing client base will benefit from their vast experience and consultative approach. It is equally an honour to enable the talented BDE team as they start their careers after gaining exceptional academic qualifications. I am sure that under the guidance of Lee’s hands on leadership approach they will help us to expand DirectID across many markets over the next 12 months.

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 WikstrÃ¶m, 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

This survey is directed at those with an interest or involvement in the Fintech sector in Scotland.

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