Nationwide Building Society has selected seven FinTech companies to take part in its Open Banking for Good challenge. The FinTech firms will develop Open Banking based apps and services to help financially vulnerable people.
The seven companies have been chosen from more than 50 applicants. Those selected into each of the three categories are:
- Income and Expenditure: Openwrks and Ducit.ai
- Income Smoothing: Trezeo and Flow
- Money Management and Help: Toucan, Squad and Tully
The challenge, born of the Inclusive Economy Partnership, will see Nationwide, partner organisations and the selected FinTechs work together to help the most financially squeezed. The challenge is supported by a £3 million fund from Nationwide. The start-ups will also be able to draw on expertise from Nationwide, Money Advice Trust, Citizens Advice, The Money Charity, Money and Mental Health Policy Institute, Accenture, Doteveryone and Nesta.
The programme consists of two paths - ‘Explore and Develop’, lasting three months, provides the space for applicants and partners to ideate around the challenge before using this insight to develop solutions. The second ‘Accelerator’ is 6 months long and is designed to further develop and build out the solutions to become scalable and sustainable. It is comprised of two parts; the first a 3-month lab run by Accenture which leans into its wider network to test ideas, and the second is a project focused on scaling the solutions across Nationwide’s membership and into wider society.
Joe Garner, Chief Executive of Nationwide, said: “While others may be looking at Open Banking through a commercial lens, Open Banking for Good is driven by our social purpose. The programme will see us partner with some of the UK’s smartest FinTechs, debt charities and academics to use this revolutionary new technology to support people facing financial challenges. Our seven chosen Fintech applicants will have access to vital insights, funding, and data to help them really make a difference. This is a great example of working across businesses, charities and government to make a positive difference in society.”
Secretary of State for Digital, Culture, Media and Sport Jeremy Wright said: "By supporting FinTechs that are focused on making a positive impact on society, Nationwide’s Open Banking for Good Challenge is giving our tech firms the support they need to innovate. Technology can make real differences to people's lives across many areas and this is a fantastic example of how to harness tech for a social good."
Rachael Sinclair, Nationwide’s OB4G Programme Leader said: “Nationwide is delighted to be working with our partners and our chosen applicants on Open Banking for Good. The challenge will see us address some of the biggest issues affecting those who are financially squeezed and get solutions into the hands of those who will benefit most from them.”
Notes on the FinTech companies
Income and Expenditure (I&E) - led by Money Advice Trust (MAT)
Nationwide receives over 5,000 calls a month from members who are approaching financial difficulty and 500 of these members are referred to debt advice charities. According to Money Advice Trust it can take up to 20 minutes to complete a (potentially inaccurate) draft income and expenditure statement. Using Open Banking to help create an income and expenditure profile will dramatically streamline the process.
- Openwrks (This link will open in a new window) are using conversational artificial intelligence and reductive logic to allow people to create accurate and realistic I&E statements online in minutes. This will reduce the time advisors spend collating data and increase the amount of time spent giving advice. OpenWrks are also working with expert advisors at the Money Advice Trust to visualise customers I&E data in way that enables more personalised advice.
- Ducit.ai (This link will open in a new window) uses artificial intelligence in their novel approach to Open Banking data categorisation. It will use Nationwide data to train its models and then test its solution. The better the Open Banking categorisation, the quicker and easier it becomes to create a I&E which will allow MAT advisors to provide higher quality advice.
Income smoothing - led by Citizens Advice
People who are self-employed, or members of the gig economy, can experience fluctuating incomes. Nationwide data revealed over 60,000 members receive substantial income from the gig economy. This includes over 5,000 ‘gig drivers’ who are almost three times more likely to have used an unauthorised overdraft and almost three times as likely to be within five per cent of their credit card limit. Open Banking could help people manage these fluctuations.
- Trezeo (This link will open in a new window) turns unpredictable self-employed income into a regular pay cheque, laying the foundation for the self-employed to access the financial products that employees take for granted like income protection insurance, pensions and even mortgages. Trezeo uses historical Open Banking data to calculate the customers sustainable pay cheque.
- Flow (Rai™) (This link will open in a new window) focuses on expenditure smoothing, ensuring billers know the best time to ask for money. Committed money would be paid when the user has it, lessening their cognitive load whilst billers stand more chance of receiving their money if they ask at the right time.
Money Management & Help - led by Money and Mental Health Policy Institute & The Money Charity
Since Nationwide started to issuing text alerts, 12 per cent of accounts that were previously incurring unarranged overdraft fees avoided unarranged fees entirely. Where these fees cannot be avoided, Nationwide has seen an 8 per cent fall in the average number of fees incurred. Open Banking could create more innovative money notification tools to increase financial capability and prevent financial difficulty.
- Toucan (This link will open in a new window) is a money and mental health app that gives you the encouragement you need to become more aware of your spending, and if the going gets tough it can help support you by alerting a nominated trusted ally.
- Squad (This link will open in a new window) will allow people to set financial goals amongst friends and that group can then support one another other to achieve them.
- Tully (This link will open in a new window) helps people who are worried about money. Tully offers financial advice, debt support and a world first, data led, personalised Money Coaching. Tully has been created to engage people positively with their money and empower them to improve both their financial capability and wellbeing. Tully’s money coaching uses data to guide user’s to achieve specific and realistic financial goals through a series of micro-challenges and interactive educational content. Tully’s money coaching has been designed to drive both short term and ongoing positive behavioural changes in how people use and manage their money.