Digital Exclusion

How FinTech is closing the gap on digital exclusion

by Sarah-Jayne Dunn, manager of the CAS Social Justice team.

This article was first published in the Herald on 26 October 2024.

It’s an old adage but sadly it’s true: money makes the world go round. Being financially excluded can have serious ramifications on your life.  It means you can’t access even the most basic financial products and services such as bank accounts, affordable credit and insurance policies.   

In its most ultimate form it means you can’t set up direct debits or have access to cardless payments and you can even struggle to access your own money. Claiming social security benefits requires a bank account. So does taking on a tenancy, getting a job, and paying for most goods and services today. Imagine what it’s like being locked out of such simple services that we all find so vital today just to live our daily lives. 

Often people are financially excluded because they are considered too high a risk, have low financial literacy or cannot pass a bank’s stringent identification and verification processes. We see this issue in CABs up and down the country time and time again. 

So, it was music to our ears when earlier this year the Financial Conduct Authority recognised the severity of this issue and sought to tackle the main drivers of financial exclusion. They ran a Financial Inclusion TechSprint, working with the Government, financial firms, Fintech, consumers and consumer bodies to improve access to vital financial products and services such as a basic bank account.   

This TechSprint spanned over three months and challenged innovators to develop solutions using digital ID, mobile banking, AI and financial technology to increase access to everyday financial services and cater to those who have been excluded or under-served by the current system.   

Citizens Advice Scotland was involved as a mentor to several of the innovating companies, offering our policy insight but more importantly channelling the lived experience of our clients, to drive product design at the earliest stage and ensure the solutions truly met the needs of those people who are currently financially excluded.  12 teams took part in the TechSprint, and the solutions presented have the potential to make a real difference to people’s lives.  

Take VouchSafe, who specialise in using digital ID to enable people who may lack the identification documents to open a bank account: effectively acting as a trusted intermediary to ‘vouch’ for them. Using similar processes to passport applications, their easy-to-use app takes a matter of minutes and will allow people to have someone act as their guarantor of identity.   

Or Ask Silver, who developed an idea of a free, AI-powered scam-checking tool that lives in WhatsApp. Again it’s very simple –to –use: you forward a message, screenshot or photograph of the suspected scam, such as a suspicious ad, text or email. Ask Silver’s AI technology then scans the suspect item and provides almost instant feedback on whether it is a scam or not.   

These are just a some of the solutions that emerged from the Techsprint process, and we are proud to have played a role in this collaborative effort to tackle financial exclusion.  

This was a powerful demonstration of how the Citizens Advice service is not just an advice-giver and problem-solver for the tens of thousands of clients we help every year. We also solve problems further up the chain by utilising CAB client experience in the here and now to improve the experience for others in the future.