Ten things we’ve learnt about financial inclusion | Deloitte UK has been saved
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Here at The Green Room podcast HQ, we're excited to kick the year off with a brand new season of big questions, cheesy icebreakers and exciting guests. In the first episode of season 4, we’re talking all things financial inclusion. Here’s a few things we picked up along the way.
In January it's likely we've all got money on our minds. Thinking about whether we really needed that beauty advent calendar in December (we did), if we bought too many cheese boards in the week between Christmas and New Year, or what our saving goals are for 2021.
Whether you consider yourself financially savvy or are keen to scrub up on your money management skills, the first episode of season 4 on all things financial inclusion is worth a listen.
To help us get to grips with the topic we were joined by Lucy Traynor, who leads our Better Banking team, and Jill Jackson, Managing Director at The Big Exchange. Together, they help us to understand what it's going to take to make sure that some people aren't left behind, and that everyone's financially included.
Here’s what we learnt.
1. Financial inclusion means different things to different people
You might be looking to secure an attractive mortgage offer, budgeting to make rent payments, or trying to access basic services. But at the end of the day, it’s about making financial products and services accessible and affordable to everybody who needs them.
2. There are 14.3 million people living in poverty in the UK
And the effects of COVID-19 have likely made that number much bigger. The pandemic has broadened the gap between the rich (who might have been able to increase their savings) and the poor. As a result, more people have dipped into a financially unstable position.
3. Black business owners are discriminated against financially
As the Black Lives Matter movement rocked the world over the summer of 2020, research from our Better Banking team (coming soon) uncovered shocking statistics around Black business owners. Like how they’re less likely to get a loan approved than their white counterparts.
4. Technology is a great way to help with education
Technology is a good opportunity to reach the younger generation. And there’s already some great information out there, so tech is key to bringing this all together. Plus, data can help personalise education, providing relevant content for an individual.
5. 1.2 million people in the UK don’t have a bank account
And at least 400,000 of those people want a bank account but struggle to get one. While people are great at tactically managing their money without a bank account, they need support to get on the financial services ladder and in the early stages of that transition.
6. Loyalty doesn’t always pay
Existing customers aren’t always rewarded for showing loyalty to their providers. Known as the loyalty penalty, some companies take advantage of less digitally connected people by increasing premiums every year. And it’s often the elderly who are hit hardest, simply because they can’t easily access competitor prices.
7. The single biggest barrier to investment is jargon
The investment world doesn’t usually talk in way that is relatable or relevant to people. As a result, people who are savers and want to become investors are deterred – thinking the investment opportunities can’t possibly be aimed at them.
8. There’s a gender investment gap
If as many women as men had ISAs, there would be another 103 billion assets under management in the UK. One of the main reasons, other than jargon, is risk. Women feel that they’re not equipped with the relevant information to make investment decisions.
9. Debt has a huge effect on mental health
There are 100,000 suicide attempts per year as a result of problematic debt. It’s a shocking statistic and change is needed fast. After Money and Mental Health’s successful Stop the Debt Threat campaign, lenders can no longer use threatening and intimidating language in debt letters.
10. Society has the power to demand change
The way we bank does currently leave some people behind. But it doesn’t have to be that way. There’s already many examples of the sector becoming more inclusive. Between technology and collaboration across the sectors in the UK, we can continue to make real change.
Liked this post? There’s more where that came from. Visit our website to follow us on Apple Podcasts, Spotify and Soundcloud. We also share what it’s like behind the scenes in our blog, Inside The Green Room. And if you've got any feedback or a great suggestion for an episode then we'd love to hear it. See you in The Green Room.