Five fintech firms that tackled problems through innovation

Spotting a problem and tackling it is a hallmark of the fintech sector. David Lee speaks to five firms that created innovative new businesses by doing this – and what comes next.

Thursday, 10th September 2020, 6:00 am
Updated Thursday, 10th September 2020, 12:03 pm
David Lee takes a look at five firms that are tapping into solutions.

The fintech community has often stressed the point that for them it is not really about the “fin” or the “tech” – it’s about spotting a problem, and using both of those things in tandem to find a solution.

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Start-ups have identified a very wide range of problematic challenges. Here are just a handful of up-and-coming firms that have found an answer to resolve a specific issue and brought it to market, creating a new and innovative fintech business in the process.

As well as finding out about the nature of the problems the five fintech seek to address and the solutions they arrived at, we ask them what’s next for their venture, and what outcomes they would consider a success.

Problem: The climb to buying your first home is a daunting one. In most cases, no-one helps you to build up the money required to pay your deposit, it’s the Everest of life’s financial challenges.

The existing process hasn’t changed in decades – you go to one place to save, another for mortgage advice, another for the mortgage, and then yet another to make it all official.

Solution: Nude is rebuilding the home-buying experience to make it easier and more enjoyable than ever before. From saving that first £5, to sending champagne with which to celebrate on move-in day, we guide our users all the way.

We help our users set a goal, offer them products/solutions such as a Lifetime ISA, which offers a 25 per cent government bonus, then we connect to their existing bank account to discover ways for them to save faster.

Our app also includes a bunch of easy to digest content to help our users understand the whole home buying process.

What’s next? After securing investment totalling £3.54 million, we’re currently scaling up our team and going full steam ahead in building the platform from which we will offer solutions, including Lifetime ISAs, preparing for a public launch early next year.

We’re particularly excited about the engaging insights our data science team are building to help our users spend less, with the goal of allowing them to reach their deposit faster.

What does success look like? Our ambitions are large and global, including applying for a banking licence to launch Nude mortgages, and to support people through all of life’s big moments, such as weddings, children’s accounts and retirement.

By the end of 2025, we aim to have more than a million users, saving them a combined total of £8 billion, and having issued 30,000 mortgages.

Problem: The monthly pay cycle is one of the systemic causes of personal debt. An abundance of easily accessible short-term sources of credit – such as payday loans, overdrafts and credit cards – have very high interest rates and create debt cycles.

Debt causes stress and sometimes long-term mental health issues, and has a detrimental effect on businesses through sickness, absenteeism or poor performance due to the financial worries of their employees.

Solution: Offer employees some of their already earned wages without waiting until payday.

This is a ground-breaking move as it is not a loan, it is free to those on low income or the living wage and allows employers to choose when, how many times and how much is available to access.

It does not require any technical installation or integration into a company’s payroll.

Whether you consider the service to be a staff benefit or a positive or progressive statement about your organisation, it is a solution that delivers for employers and employees alike.

What’s next? To educate businesses from all sectors about the benefits of taking a more flexible approach to paying employees. Also to demonstrate the importance for every company of having a financial wellbeing strategy for employees.

Post-Covid-19, companies that thrive, or indeed survive, will be those that put people – employees and customers – at the centre of everything they do.

What does success look like? A reduction in the high levels of personal debt that hard-working people and families find themselves in; growing the business in Scotland; finding partnerships in both private and public sectors and continuing to work in every market sector.

Lastly, to be seen as one of the few businesses working alongside the tireless, excellent debt and homeless charities to make a tangible and fundamental improvement for ordinary working people.

Problem: Covid-19 has created a rush for hospitality businesses of all sizes to invest in their own ordering app solution for table service and takeaway collection.

However, customers are not keen to have an app on their phone for every venue they visit.

The available technology solutions are expensive and the ones that aren’t offer limited functionality, which leaves independent businesses at a disadvantage to large national chains who can afford a bespoke

solution.

Solution: Pour is an affordable platform, built for independent pubs, bars, restaurants, and cafés.

We offer independents a cost-effective way to process app orders and access a marketing platform that broadens their audience from current customers to everyone in their area.

For customers, we are the one app they need to find out what’s on at independent venues in their area, and to order and pay when they are there.

What’s next? We are working with cafés, bars, and restaurants across the UK and our goal is to roll this out to more businesses.

Using user feedback we will improve and grow the service into the preferred order, pay, and marketing platform for the independent pub, bar, restaurant, and café industry.

What does success look like? The creation of a national community of independent

venues and their customers.

We want to establish a place for businesses to share their latest menus, offers and events, and a place for customers to find out where to go, gain access to exclusive deals directly from the venues, and order for both in-person table service and takeaway collection without having to make another unnecessary download.

Problem: Greater use of digital banking has reduced footfall to physical branches, leading to significant closures across the UK and leaving many customers with no access to a bank, creating a digital divide.

Almost 40 per cent of Scottish towns have either only one bank branch or none. Yet government and regulators encourage banks to retain a physical presence to support their full customer base, especially the vulnerable who need access to cash.

Duncan Cockburn, OneBanks founder and chief executive, says: “I’m very interested in open banking, but it’s not open to everyone and not inclusive. I want to enable financial inclusion for everybody.”

Solution: OneBanks is not a bank, it aims to be an independent “gateway” provider, offering access to the services of all the big banks in one location, irrespective of who you bank with.

OneBanks kiosks, in public spaces such as supermarkets or shopping centres, allow customers of any bank to speak to a OneBanks colleague, and to carry out any everyday banking transaction. Signing up to OneBanks, using facial recognition – helping those who struggle with passwords – will allow them to access their bank, whatever it is, in one location.

Cockburn adds: “OneBanks is about making banking human again, and helping those who struggle with digital banking to engage with the latest technology, so nobody is left behind. We recognise the importance of human interaction, but we are strong advocates of technology.”

Cockburn also says it is difficult for banks to find a solution themselves, as an independent party is required under Competition and Markets Authority governance.

What’s next? OneBanks is speaking to banks, as their involvement is key to long-term success. It has a strong working relationship with some banks, and is working to finalise a commercial model – which will include fees to be paid in specific locations, plus transaction fees, etc).

OneBanks demonstrated a kiosk in Easter Road, Edinburgh, in July and aims to launch in Scotland later this year. Cockburn’s research has identified several Scottish towns with limited banking facilities for local communities.

What does success look like?

The OneBanks model is proven, and its kiosks are rolled out across Scotland and the rest of the UK, supported by funding from various partners – so far, it has come from angel investors.

OneBanks is recognised as a “solution provider” by UK Finance’s Community Access to Cash pilot – and its aim of supporting financial inclusion is realised.

Cockburn says: “What I love about this is that we are helping consumers and the banks, and I’m confident we’ll gather momentum.”

Problem: Micro-businesses that exchange time for money struggle to succeed, and two-thirds will fail within five years.

This difficult challenge has been made overwhelming for some by Covid-19, adding pressure to the need for an online presence to help market themselves and allow customers to easily book and buy services.

Solution: An online platform which transforms micro-businesses, by quickly and easily giving them an online presence for existing and new customers.

The platform offers an easy way to collate business contacts and to communicate digitally and make offers to customers while allowing them to book and pay online for the business’s services.

Also, business owners can access expert tips, guidance and support about how to run and grow their business.

Strivers will gain more time, money and satisfaction – and run their business successfully with less hassle.

What’s next? Striver is in the process of launching Version 2 of its platform, which will initially be rolled out to the health and wellness sector in Scotland, with a full UK rollout being planned for next year.

What does success look like? The creation of a 50 per cent reduction in the current two-thirds failure of UK micro businesses. That outcome would be great news for everyone.

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