Finding a fintech sweet spot among 12 million ‘squeezed’ consumers

By Mark Hallewell, Senior Strategic Alliance Manager at the Money Advice Service, August 24, 2017.

The 2015 UK Financial Capability survey established that 20 million adults in the UK don’t have an approach to budgeting that they feel works, and a similar number don’t even have what might seem like a modest £500 savings buffer. Also, a third of people told us that they hadn’t accessed money information or advice in the last 12 months.

Fintech businesses who are in the B2C space have a great opportunity to reach these people in ways not previously considered, or not even possible, before now.

Solutions allowing people to quickly and automatically invest their money in various assets such as shares or property abound. It is now easier than ever to track your portfolio performance and adjust it on the fly. This is a welcome improvement for some but are opportunities being missed elsewhere?

At the Money Advice Service we identified a segment of the UK population who we called ‘squeezed’. The combination of their financial commitments and relatively low savings buffers adversely impacts their financial resilience. There are 12.7 million UK consumers in this segment. They have an average household income of £32k, median savings of £580, a higher propensity to manage money online (65% versus 55% UK average), and their demographic is weighted towards 25 to 44 year olds with children.

We believe this could be a sweet spot for fintechs. These people are digitally engaged, but less engaged with their money. They are often in the early part of their careers – so their earnings stand to rise.

How could fintech really make a difference to their daily lives and help them to be more financially included consumers? Analysis of our 2015 survey, involving thousands of consumers, and further research has helped us to understand the ‘building blocks’ of financial capability, and their relative importance. Our research has led us to the hypothesis that helping consumers to improve in these four areas will have the biggest impact on their money management skills and motivations:

  • Increasing financial confidence
  • Helping consumers to better manage credit use – eg, paying down the highest cost credit first
  • Actively helping consumers to save more – eg, getting people to save for a ‘rainy day’ or for a future cost such as a car or holiday
  • Helping consumers to consider and track their spending eg by providing daily feedback on balances

We’re involved in this competition because we aim to find companies who will help us offer cutting edge and effective money support to people who need it in the UK and to embed evidence based practice in public, private and not-for-profit sectors. Helping fintech companies develop truly relevant products and service will allow us to offer better, cheaper and more targeted support making a real difference to people’s lives.

Ultimately this will help the Money Advice Service and our financial capability partners achieve our collective long-term vision of everyone in the UK managing their money better.

We are delighted to be playing a role in Tech City UK’s competition, and we look forward to working closely with the winners. Please contact if you’d like any more insight or advice to help improve your entry.

Apply here for the Fintech For All Competition