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The “Uber” moment for financial capability cannot come soon enough

We have a huge opportunity to create a more inclusive financial services sector

By Rachael Sinclair  

This article was produced in association with Nationwide

Improving financial capability remains a significant and stubborn challenge facing those of us interested in creating an economy that’s both inclusive and prosperous. As a building society, Nationwide was founded with a social purpose rather than a commercial one. Our founders, members of the cooperative association in 1884, were considering how to improve living conditions by expanding home ownership, and this social purpose remains at the core of everything we do.

Today we are the second largest provider of mortgages and rapidly growing in current accounts, while still staying true to that original purpose of contributing to wider society. That broader purpose is about helping ordinary people manage their finances better, to build better lives for themselves, their families and the societies in which they live.

Research from the Money Advice Service shows there are 12.7 million people living in the UK who are financially squeezed, meaning a single unexpected bill could prompt a slip into financial difficulty. Of these, a third are in full or part time work but have limited solutions to manage through times of financial difficulty or shock. Behind these statistics there is a very real human cost where the stress of being financially squeezed can easily seep into other areas, affecting peoples’ ability to deal with other challenges in their lives.

Meanwhile, the smartphone is a nearly universal feature of modern life, with an estimated 85 per cent of adults owning or having access to one. We want to take our social purpose and blend it with the opportunities that technology opens-up. We want to find the “Uber moment” for financial capability in the UK.

In January this year, Nationwide and eight of the largest current account providers in the UK, were the first to introduce a secure way for members to consent to share their current account information with regulated third parties via an Application Programming Interface, otherwise known as an API. This regulation, known as Open Banking, was introduced to give consumers more choice and convenience in how they manage their finances and to create more competition in the industry.

Open Banking has the potential to be truly transformative and whilst many are thinking about how they can use this new initiative to create profit, we are asking how can we use this technology and transform the lives of people on a financial knife edge? I believe that by combining the capabilities of the smartphone with Open Banking, we have a huge opportunity to create a more inclusive financial services sector and society.

That’s why we want to collaborate with some of the brightest minds from fintechs, start-ups, innovators and entrepreneurs to develop and scale some potentially game-changing solutions for financial capability through Open Banking. As part of the Inclusive Economy Partnership (IEP), a government-convened collaboration between business, civil society and the public sector, we have been looking at solutions to tackle a range of challenges including financial inclusion.

Through working with our IEP partners, including Nesta and Accenture, we are running a challenge to find solutions that use Open Banking to create a transformational moment in financial capability. The challenge provides four distinct application paths suitable for applicants whose concepts are at various stages of maturity. Whether they have a great idea that needs exploration and development, or they have a tried and tested product that needs investment to help scale it up, there’s an application path to suit and Nationwide will be making £3 million available for the programme.

As a mutual organization, founded on the principle that we can achieve more together than we can alone, we are uniquely placed to bring together the fintech community and our membership to deliver innovation for meaningful social change.

Addressing the problems around financial capability is one of the most pressing issues in society today. The solution is within our grasp and finding it cannot come soon enough.

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