New tech, old problems

Fintech companies are shaking up the financial services industry, as new technologies make it easier to understand your finances, control your spending and save automatically. This could be great for the financially excluded. At the same time, there is a risk of further exclusion, when physical banking infrastructure disappears, personal data is bought and sold, and payments become almost frictionless. In partnership with Barclays, Demos hosted a roundtable of experts to discuss the risks and opportunities.

Incorporating insights from the discussion, in this report we argue that both financial technologies and government interventions have been premised on a vision of a ‘mythical consumer’ – an economically rational individual in complete control of their finances. In truth, most of us are far removed from this mythical consumer, especially when we are stressed, scared or strapped for cash. Instead, we should base policies and products on people as they really are. The report offers 20 recommendations to make this happen. Understanding just how real-world consumers act will require far more data sharing and collaboration, especially between fintech companies, credit unions and charities, with important roles for employers, regulators and government as well. The UK is a leader in financial technology. We should leverage this prowess to ensure we become a leader in financial inclusion as well.