By Prasangi Unantenne, Head of Implementation, Wise Platform

Over the last ten years, fintech companies have succeeded because they are able to understand, and cater to, their customers’ needs. Challenging the traditional banking model, fintechs have gained market share by simplifying the user experience and identifying key gaps to create a unique user experience. 

Among the most inspiring fintechs are those that have taken a highly-specific approach to financial wellbeing. This helps customers at the best of times – but it also has the potential to protect them at the worst of times. It does so in two key ways: by reducing the risk of financial exclusion, and creating bespoke solutions that meet customers’ personal needs. As we close in on the winter months amidst a cost of living crisis, fintech is uniquely positioned to protect customers’ wallets and help them feel confident about their finances. 

Enhancing financial inclusion

As of 2021, there are still 1.2million people in the UK without access to bank accounts, which makes paying bills and receiving wages more difficult, leaves them without a credit history, and with more shops becoming card-only, risks locking them out of buying essential goods and services. 

Many fintechs that have emerged in recent years have identified one or more of the key barriers to financial inclusion, but perhaps the most obvious example is making it easier to set up a digital bank account. Neobanks like Monzo, N26 and Monese have radically changed how we think about banking by making it simple and convenient for people to protect and manage their money directly from an app. 

But financial inclusion isn’t just about setting up an account – it’s also about how easy it is for people to understand what’s happening to their money once they have one. For example, you can effortlessly set up a monthly budget in your Monzo app, or build your credit score by saving money rather than borrowing it with Monese. These seemingly small changes make an enormous difference to the lives of everyday people, empowering them to better manage their money without losing the benefits that a traditional bank account provides. 

Fintechs have also been central to democratising sending and spending money abroad. Rather than charging customers with hidden fees and markups, fintechs have increased access to financial services by offering a simple, affordable solution to moving money across borders. 

Of course, not all fintechs support financial inclusion equally, but the fast-paced, innovative nature of fintech companies offers a unique opportunity to tackle some of the most prevalent issues and ensure people have access to a financial system that works for them. 

Helping customers through crises

Simplicity is the common thread throughout fintech that is driving financial inclusion, and it has also been the key to empowering customers with the knowledge and tools to manage their money effectively. 

According to a recent study by Plaid, an enormous 84% of UK consumers use fintech to manage their money, and 49% say it makes them feel more in control of their finances. Given the ongoing cost of living crisis, it’s more important than ever for customers to feel confident about their relationship with money, and customers will increasingly choose services that offer them that peace of mind. 

In addition to simplicity, customers are looking for bespoke support – whether that’s advice from staff at a local branch, or from accessing services that cater to their individual needs. Traditional banking relies on a model of ‘one-size-fits-most’, but how we manage our money during times like these is deeply personal, and this approach can lead to customers feeling that their needs aren’t being adequately served. That’s where fintech steps in. 

One example of a fintech that is designed to offer unique services for their customers is Wagestream. Wagestream is a leading financial wellbeing tool for front line workers which allows them to access a proportion of their month’s wages in advance of payday, helping them to better plan their finances and significantly reducing money-related stress. 

Developed in collaboration with several charities, Wagestream is focused on helping their customers – i.e. employers – pay employees in a more flexible way that works for them. During times of uncertainty, this can make an enormous difference in how people feel about their economic stability. 

In a recent interview, Emily Trant, Head of Inclusion at Wagestream, speaks about the impact of flexible pay on employers and employees alike. In addition to flexible access to pay, Wagestream also offers a transparent breakdown of how much employees have worked over the course of a month, and what that work is worth. This means no guesswork or estimations, and more financial assuredness. 

Businesses using Wagestream to pay their employees also feel the benefit, with increased employee satisfaction, decreased turnover, and more employees willing to work overtime – often the key to providing an effective service in the sectors Wagestream serves. Ensuring your employees feel secure and cared for protects businesses and services from the potential implications of crises, too. 

This is not just theoretical – the Wagestream app is checked, on average, 21 times per month by employees – a sure sign that it provides reassurance and offers highly effective tools that are consistently helping people manage their money day in, day out. This figure also points towards the importance of providing these tailored services – now, more than ever, people are engaged with their finances and are hungry for solutions that make their lives easier. 

Finally, because fintechs are by definition digital and easy to set up, customers can easily find not just one, but several services that speak to their needs, allowing them to manage their money in different daily scenarios using tailored services. 

Fintechs are uniquely positioned to support customers through crises because they are new, challenge the status quo, and offer simplicity above all else. No smokescreens – just intuitive services that target customers’ individual needs. By building a more robust, inclusive financial system, fintech might just be the key to getting customers through the rocky terrain ahead.