Nesta is working across a variety of innovative projects and programmes that are designed to support the financial inclusion of UK citizens.
The statistics are stark. Research suggests that as many as 12.7 million people in the UK could be financially squeezed: people who have significant financial commitments but little capacity to cope with sudden changes to their financial circumstances.
We support the great work within the sector to provide much-needed support and advice for citizens. We are also interested in how innovation and innovative approaches can support the scaling of current solutions that work, and the development of new and better ways of supporting financial inclusion.
Financial inclusion is where people have access to financial products and services on reasonable terms that help them meet their financial needs. Market-provided solutions are particularly important, e.g. affordable credit, debt repayment programmes, savings incentive programmes, access to appropriate and affordable insurance. Financial capability is people’s ability to manage their financial lives and to understand and assess their options in the financial marketplace. Enhancing financial capability typically takes place outside the marketplace – through education, money training programmes, debt advice, money seminars etc.
Nesta is working on a variety of projects and programmes across four teams to address financial exclusion.
Nesta is a supporter of the work of the End High Cost Credit Alliance, the work of Fair4allfinance and Nationwide’s Open Banking for Good programme. We are currently conducting research as to how to encourage fintechs to invest in affordable credit products and services, asking the questions:
Which types of organisation can widen financial inclusion? How can we harness the resources and capabilities of the affordable credit sector and the fintech sector? How can we encourage the joining of forces to widen financial inclusion?
Our hypothesis is that cross-fertilisation between these two segments, drawing on their respective strengths and complementing each other’s weaknesses, could prove impactful. But there is little understanding of the extent of the contribution this could make or how to make effective cross-fertilisation happen.
We think some of the important parts of this missing conceptual common ground are:
Over the next few months, Nesta will be testing its hypothesis and we will be looking for funders and supporters for the recommended outcomes. This will complement the Savers Support and IEP programmes we are already running. We will also be advocating for: