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Fintech ‘Ethical Duty’ to Help Combat Cost of Living Crisis

The Fintech Times | | Oct 15, 2022

Cost of living - Fintech 'Ethical Duty' to Help Combat Cost of Living CrisisIt is about “what side of the line do you want to be on,” says the founder of a startup which has created a free household expenses dashboard to help with the cost of living crisis.

  • Ethical duty:  Greg Marsh, the founder of fintech Nous, says amid the current cost of living crisis fintechs have an ‘ethical duty’ not to exploit households, saying those that do might suffer the same fate as the collapsed payday-lending sector.  [The current] crisis that shows no signs of abating, wreaking financial havoc on households and businesses alike, with the threat of the mass closure of SMEs just one example of its likely devastating impact.
    • But the crisis also presents a whopping opportunity for fintech to showcase their values as nimble-thinking disruptors able to swiftly bring sought-after services to imperiled businesses and households to market.

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  • Financial education tools, spending and budgeting trackers, fee scrapping, one-off payments to staff are amongst products and services hurried out by fintechs.
  • Budget and money management:  Starling Bank launched an ‘updated’ money management feature with a raft of new categories like essential spending, rent and takeaways, in response to the cost of living crisis.
  • Free of charge:  Nous has used open banking and other data to create a dashboard to create a tailored plan highlighting how customers’ bills might change during the crisis.  Marsh says many tens of thousands have signed up for the free-of-charge plan, with the sign-up demographic skewed to those on lower incomes and (because of its use of open baking) a younger generation.
  • Diverting pension contributions: Both Pension Redirect (offers individuals the chance to shift workplace pension contributions into accessible savings) and Salary Exchange (a tax-efficient way for individuals to take a salary cut while maintaining pension contributions at a lower cost to the individual) were launched pre-crisis,

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  • Axing account fees:  Germany’s N26 erased all custodial fees – previously charged on accounts with balances of over €50,000- from July this year, among other measures.
  • Financial education:  a priority for Moneyfarm, the digital wealth manager, says Chris Rudden, head of investment consultants, Moneyfarm. Rudden said: “As we have seen turbulent markets over the past year or so, and in particular since the beginning of this year, we have put even more emphasis on providing information.
    • Educating the young:   GoHenry, the financial app and debit card for children, says the current economic turmoil is an opportunity to reassess educating children about finances.

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