Growth through financial inclusion A roadmap for UK banks March 2021 Growth through financial inclusion | A roadmap for UK banks

Contents

1 2 3 4 5 6 Growth through financial inclusion | A roadmap for UK banks

Foreword

Improving financial inclusion is a strategic priority for us at Deloitte, reflected in our commitments toSustainable Finance and our 5 Million Futures social impact strategy.

During 2020 we carried out research that is explored in detail in this paper. Within this comprehensive and interactive report we define financial inclusion, explain the complex nature of the problem and the wide-ranging barriers to inclusion, and demonstrate how the COVID-19 pandemic worsened an already bad situation. We examine existing initiatives across the sector and beyond (see appendix for further details). We discuss the gaps and challenges, and identify opportunity areas for UK banks to improve financial inclusion and generate business growth.

We believe that now is a crucial time for banks - in collaboration with others, including charities, social enterprises and the private sector - to recognise the increasing proportion of customers experiencing a negative impact to their financial wellbeing, and seize the opportunity to respond with innovation to the increasing challenges faced by financially excluded customers. We believe that innovative and inclusive solutions can benefit a broader customer base and lead to growth. We conclude this paper with our own commitments to work collaboratively with the financial services sector and beyond to improve financial inclusion in the UK.

Richard Hammell James O’Riordan Richard Kibble Partner, Partner, Sponsor Lead for Financial Inclusion Partner, Head of Financial Services UK Chief Global Officer, North South Europe Head of Banking UK +44 20 7303 7549 +44 20 7007 4933 +44 20 7303 6761 [email protected] [email protected] [email protected] Growth through financial inclusion | A roadmap for UK banks

Introduction

As 2020 began, there were an estimated 12 million people This report illustrates the complex nature of financial inclusion; 4. Approachable banking living in the UK with less than £3001 in their bank account while it identifies the most at risk; examines the consequences of Building trust and removing barriers to entry will encourage 4 million people in paid work were living in poverty2. As we enter the COVID-19 pandemic, and reflects on the financial inclusion financial participation. A compassionate approach will help build 2021, the nation has suffered the greatest financial shock in over initiatives that are already making a difference. It will explain why the trust excluded customers may lack at present. a decade, the economy has shrunk and the pandemic continues there is still so much to be done and emphasise the need for to restrict many areas of our lives. immediate action. 5. Money made easy Simplified and targeted financial education is required. Language In normal pre-COVID circumstances, financial exclusion affects Our research identifies six opportunities to improve needs to be clear and concise. Communications and explanations a broad range of people. Those in vulnerable circumstances are financial inclusion: should be relevant, direct and free of jargon. particularly at risk - such as those on low incomes, living with a disability and those who are digitally excluded. Many live with two 1. Lessons from COVID-19 6. Inclusive financial services sector or more of such vulnerabilities. The last few years has seen an The pandemic casts new light on specific customer vulnerabilities Working collaboratively across the financial services sector increase in problem debt, low financial capability and lack of trust such as financial abuse, gambling, and bereavement. At the start to show more societal purpose, community empathy and in financial institutions. Financial products and services are failing of the pandemic, the Financial Conduct Authority (FCA) issued encourage inclusivity and diversity, to change the perception of to meet complex, changing, individual needs. guidance around support for vulnerable customers: the sector the sector and leverage its influence to drive greater social good. responded with compassion and pace, offering short-term relief Now, with the impact of COVID-19, well-being has deteriorated in the form of mortgage holidays and payment deferrals. To among the financially excluded. People who might previously continue safeguarding consumers, it is essential the banking have felt financially secure, find themselves either on the brink and insurance sectors remain agile through and beyond the or are now in financial crisis. In fact, Deloitte’s Better Banking pandemic. COVID-19 Insights survey (2020) showed financial inclusion is now a concern for approximately half of UK banking customers 2. Personalised banking with 45% saying their wellbeing has been affected by financial People require financial products suited to their own particular concerns resulting from the COVID-19 pandemic. needs and which adapt as their circumstances change. One size does not fit all. As we look ahead, we believe there is an opportunity for UK banks - and Deloitte - to help those left behind by our current 3. Specialised support financial system. It is imperative that banks transform their Vulnerable people with complex needs require tailored and products and services to suit customers in 2021 and beyond, expert help to support them into financial inclusion. viewing financial inclusion as a strategic priority for all.

1 The Money Advice Service, Market Segmentation (2019) 2 Financial Inclusion Alliance: Tomorrow’s Company, Serving All (January 2020) Growth through financial inclusion | A roadmap for UK banks

Deloitte & Financial Inclusion The following are a few examples of how we are working with our clients to address Financial Inclusion

HSBC UK: Strategic review of financial inclusion in The Big Exchange FinTech for Schools the UK Prior to the COVID-19 pandemic, there were 12 million people in the Together with Innovate Finance, Deloitte has launched an Deloitte and HSBC UK have a shared goal of social impact. UK unable to pay an unexpected bill of £300, such as to fix a broken- initiative that aspires to drive financial inclusion, improve At the beginning of 2020, following a series of collaborative down washing machine. This low financial resilience left millions financial literacy and inspire young people to explore workshops, we set out together to write a paper on the vulnerable to the sudden drop in income many people experienced as career opportunities in FinTech. Working in partnership scale and breadth of financial exclusion in the UK, the a result of the pandemic. across the ecosystem and with key industry leaders, the extent and effectiveness of existing initiatives across the vision is to create a programme that drives financial health sector and beyond, and to outline key recommendations Following the onset of the pandemic, Deloitte worked with The Big and wealth: enabling young people to gain access to basic on how together we could make a significant impact Exchange to accelerate the delivery of an “inclusive money” app aimed financial know-how and to bring more talent into the improving lives of the most vulnerable and financially at helping people who are financially excluded. Together, we wanted FinTech sector. excluded people. to respond to the growing need to provide support to financially squeezed and struggling customers. To deliver on our ambition, we’ve developed a mobile-first By March 2020, as the COVID-19 pandemic resulted in platform that will enable students and young adults to the first of many national lockdowns, we adapted our When developing the design, we conducted research with target easily gain access to information that will equip them to: approach and began conducting additional research to customers, such as those furloughed or redundant, more vulnerable understand how the crisis was affecting people’s financial to financial shocks and in need of short-term (high cost) credit. We also 1. Manage their own personal finances; wellbeing, and their ability to access the banking products worked with our charity partners to prioritise relevant products and 2. Learn about core topics such as open banking, mobile and services they needed. services and we worked with end users to test and develop the app. payments, cryptocurrency, and blockchain, and 3. Gain insight into the career paths that are available We interviewed multiple experts within the bank as well What does the app include? across the FinTech and technology landscape. as charity partners, and surveyed banking customers, and We designed the app to include money management tools and an in doing so we uncovered the most significant barriers to ethical marketplace, which gives access to a suite of curated financial In addition to our state-of-the art webapp, we have financial inclusion. We then led ideation workshops and products, including credit-building, green energy switching, and access developed mini masterclass videos, delivered by industry created a long-list of over forty innovations including new to debt advice and jargon-free financial education. experts, to provide an educational overview on some ways of working, novel products and adapted services. The of the hottest trends and topics in FinTech. Our work list was subsequently distilled into a three-year journey to In addition, the app will allow us to gain greater clarity on customers’ experience and insight days further enable students to improve financial inclusion in the UK. financial health, subtly educate them and encourage helpful connect with FinTech experts and explore the exciting behaviours, such as switching and saving. world of Financial Technology!

Our next step is to launch the app in Spring 2021 and expand the Together, we want to enable and encourage young people products on the marketplace further through partnerships with our to understand the importance of digital and financial FS clients and charity partners. The app is expected to help at least know-how for the future. 40,000 financially excluded customers in the first year. Growth through financial inclusion | A roadmap for UK banks

What is financial inclusion and why Introduction does it matter?

higher-cost credit, increasing the likelihood of as a baseline rather than an afterthought will Financial inclusion means making financial becoming trapped in spiraling debt. facilitate the creation of safer and more affordable products and services accessible and products suited to individuals in their specific affordable for everyone who needs them. Financial services need to be accessible, easy to contexts. use, and meet people’s needs over their lifetime. Despite the UK’s global position as an These requirements should apply for the entire Financial exclusion is not an isolated issue: it international financial hub, financial inclusion population, even the most excluded. For example, seeps into other areas of people’s lives. It can remains a challenge for many people who individuals may face challenges entering the perpetuate individuals’ difficulties, making them live here. financial system due to a poor credit history or more susceptible to other concerns such as Financial exclusion can affect people from a wide limited understanding of banking terminology, homelessness, mental health issues, economic range of demographics: the old and the young are which might in turn lead to mistrust. abuse, and persistent debt. notably impacted as are people with disabilities, Aspiring for financial inclusion means enabling Enabling access and empowering people and women, people facing mental health challenges access to the products and services that communities with relevant skills and knowledge and almost everyone on a low income. People people need, particularly those in vulnerable is vital if they are to make appropriate financial who are locked out of the “mainstream” financial circumstances. If the minimum benchmark for decisions. Access to financial services and access system, are often penalised by having to pay designing services and products is to cater to the to good financial services is not the same thing. more for everyday services and products. For needs of the vulnerable, everyone’s needs will be example, limited digital accessibility often means Giving people the tools to better manage their met. This will not only reduce financial exclusion people cannot access cheaper online prices. At challenging circumstances not only helps but it will improve product design. Reshaping the same time, they may be limited to accessing individuals and families, it collectively develops the process to encompass financial inclusion entire communities and drives economic growth.

Financial inclusion in the UK 1.2 million 1.9 million people in the UK do not have access to a bank account3 pensioners in the UK are living in poverty and a worrying 8% would not be able to pay an unexpected bill of £2006 (pre-Covid figure, likely to have worsened) One 60% in four have no savings4 of people on the lowest incomes do not have home contents insurance7

3 million 12 million people with disabilities have been turned down or charged UK residents would not be able to pay an unexpected bill of £3008 (pre-Covid, likely to extra for insurance5. have worsened).

3 HM Treasury - Financial Inclusion report 2018-2019 6 Age UK, Pensioners living in poverty (March 2020) 4 Skipton Building Society 7 Financial Inclusion Commission Manifesto 5 The Disability Price Tag (2019) 8 Money Advice Service 6/46 Growth through financial inclusion | A roadmap for UK banks

The business case for financial inclusion Introduction

Improving financial inclusion is morally the can expect customers to want broader and Investors right thing to do, and there are economic and deeper relationships. A basic account may be Investors are increasingly interested in business benefits to be won as well. It helps followed by a current account and insurance. sustainability, specifically environmental, social customers achieve improved financial and Where appropriate there may be a mortgage, and governance (ESG) factors. ESG stocks have non-financial well-being, whilst also improving an Individual Savings Account and, or, a private performed well during the pandemic. According their credit-worthiness. It is a way to attract pension. Investment in financial inclusion, in to a survey in the Financial Times, 85% of asset new customers. It demonstrates sustainability other words, holds potential for attractive managers expect an increased interest in ESG credentials to shareholders and engages returns for banks. It becomes investing.9 Improving financial inclusion can be employees. It burnishes brand values. It economically viable. a tangible example of a bank’s commitment to presents opportunities to support UK society Focus on financial inclusion may also help its social sustainability agenda. at a time when it is much needed. It assists the attract and retain more affluent customers. UK’s economic recovery from the COVID-19 Employee engagement Deloitte’s Better Banking COVID-19 insights pandemic. There is an opportunity to engage employees survey (2020) shows that the majority of UK by raising awareness about financial inclusion Customers banking customers (71%) would be more and suggesting ways to get involved. We likely to choose a bank with positive social The Deloitte Better Banking COVID-19 insights found in a 2015 study that 77% of millennials and environmental impact. Among the 11% survey (2020) shows that COVID-19 has had a joined their current employer at least partially of customers who said they had switched negative impact on the well-being of 45% of because of the company’s sense of social accounts since the onset of the pandemic, UK banking customers. They are, for example, purpose10. According to 2019 research from social impact was cited as the main reason more worried, anxious and, or, depressed. The Close Brothers11, the UK merchant bank, 94% of for change. number increases to 60% among customers UK employees are worried about money. More who have less disposable income or have Brand than three quarters (77%) of employees say taken a loan or mortgage holiday as a result of Banks can bolster brand values and consumer money worries impact them at work. Improving the crisis. Banks can help customers towards trust by association with positive social impact. financial resilience of employees can increase financial wellness by supporting them to Customers appreciate the support offered by productivity, reduce absence, heighten job improve credit scores, manage debt, avoid banks during the first waves of COVID-19. Our satisfaction and enhance the sense of pride in the collections process, and gain confidence research showed that 33% of customers trust their organisation. managing their money. With an increased their bank more since the onset of focus on financial inclusion, bolstered by newly the pandemic. personalised products and services, banks

9 Financial Times, ESCG passes the Covid challenge (June 2020) 10 Deloitte Millennial Survey 2015 11 Close Brothers, Financial Wellbeing Index 2019 7/46 Growth through financial inclusion | A roadmap for UK banks

The business case (continued) Introduction

Regulators According to the UK Government Spending Banks are in a good position to tackle financial Regulatory interest in sustainability is likely Review in November 2020, the number of exclusion but could do more, consumers say. to increase in coming years, in line with the unemployed people in the UK is expected to Half (52%) UK banking customers think their ambitions of UN’s Sustainable Development be as many as 2.6 million, a rate of 7.5%, by bank should increase efforts to help pandemic- 14 Goals and the Paris Agreement. It is reasonable mid-2021. struck society . Encouragingly, two-thirds (68%) are pleased with their bank’s response to to expect regulation will address environmental Prior to this, there were millions of people in COVID-19. issues more urgently than social issues, but the UK with little or no savings, and therefore we expect social sustainability to be a future no buffer to soften financial blows brought with The business case makes the moral imperative 12 focus area of regulation. The fair treatment of COVID-19. Once again, groups who were prone achievable and economically sensible. consumers continues to be a top priority for the to financial exclusion before the pandemic Financial Conduct Authority (FCA) and is further have felt the strain more acutely. Disabled emphasised by the increased risk of consumer people, for example, were twice as likely to lose harm due to COVID-19. their job than the able-bodied.13 The Deloitte UK society and economy Better Banking Survey shows that almost half of UK banking customers - irrespective of Unemployment rose significantly during the financial situation - have worse well-being due COVID-19 pandemic and at the time of writing to the financial impact of the crisis. Levels of is expected to rise further. The UK’s Office for employment, growth, financial resilience and National Statistics reported a record 370,000 mental health may drop even further when redundancies between August and October the furlough job-protection scheme comes to 2020, giving an unemployment rate of 4.9%. an end.

12 The Guardian, Parents and carers are twice as likely to lose their jobs (August 2020) 13 Age UK 14 Deloitte Better Banking COVID-19 Insights Survey (2020)). 8/46 Growth through financial inclusion | A roadmap for UK banks

The cost of poverty

The financial inclusion problem

There is a strong correlation between According to research from the Personal Poverty poverty and financial inclusion. Poverty can Finance Research Centre at University of be measured and defined in various ways Bristol19, the poverty premium costs the and the “poverty line” in the UK is currently average low income household £490 more around £195 a week for a lone parent with two a year, but for more than one in ten of these 14.3 million people are living in 20 children15. Poverty affects people with jobs as households it costs at least £780 more per year. poverty (pre-COVID; figure likely to have well as those without; according to the Joseph worsened) Although poverty is a significant driver of Rowntree Foundation16, there are 4 million financial exclusion, the financially excluded “working poor’ in the UK, i.e., people in full often face many complex challenges. Causes or part-time work who have incomes below such as digital exclusion, financial abuse, poor the poverty line. 1.9 million pensioners are working age adults20 mental health and addictive behaviours can 8.3 million currently living in poverty. Furthermore, there intersect with poverty, making it difficult to are 1.2 million17 unbanked individuals in the UK, identify the primary trigger. who are restricted to a cash-only existence. People living in poverty often pay more for 4.6 million children20 energy bills, insurance, loans and products for their homes. This additional cost—the ‘poverty premium’—is defined as ‘the extra cost that households on low incomes incur 20 when purchasing the same essential goods and 1.3 million people of pension-age services as households on higher incomes’. People who can afford it least, in other words, are paying the most. Around 14 million people18 in the UK who live in poverty pay these extra Poverty premium costs the average low costs, often locking them into a cycle of poverty. income household £490 a year21

More than 1 million 15 Nourish Community Foodbank, The definition of poverty in the UK (2016) additional people living under the poverty line 16 Joseph Rowntree Foundation 20 Social Metrics Commission (2017/18) 22 17 Financial inclusion report 2018-19 21 University of Bristol, The Poverty Premium (2016) compared to pre-COVID 18 Fair By Design, The poverty premium (2016) 22 IPPR, Estimating poverty impacts of the coronavirus pandemic 19 Paying to be poor: the scale and nature of the Poverty Premium (June 2020) 9/46 Growth through financial inclusion | A roadmap for UK banks

COVID-19

The financial inclusion problem

At the point of writing, the COVID-19 pandemic As restrictions on trading and movement The following are a few examples of the impact of has increased household financial stress continue across the UK into 2021, the impact is COVID-19 thus far: by squeezing incomes making it harder also being felt by people who have previously • Women, young people and people from ethnic for households to cover living expenses felt financially secure. In November 2020, food backgrounds have been heavily impacted as and manage debts. UK households are aid charities, such as Feeding Britain and the they have a higher dependency on zero hours’ experiencing the sharpest fall in incomes since Independent Food Aid Network24, reported a contract work the 1970s, with low-paid workers and mid- new influx of middle income families to their income households experiencing the greatest food banks. These are typically people with • 18% of vulnerable people in the UK reported income loss23. mortgages, cars and often self-employed, who thoughts of self-harm or suicide during the have been plunged into crisis by COVID-related first lockdown25 Low and middle income groups are at the job losses and gaps in social security. These • Individuals have found it more difficult to highest risk of redundancy, furlough, or ‘newly hungry” who, lived quite comfortably access mental health support and difficulties in involuntarily working fewer hours. This is before the pandemic and are now an indicator managing mental health go hand in hand with especially so in the hardest-hit sectors, such as of how the virus has pushed the cost of living challenges in managing finances retail, leisure and hospitality. As well as being crisis, further up the income scale. predominantly low-wage employers, many • Two thirds of ‘engaged gamblers’26 - those employees are young, from specific ethnic The pandemic has also shifted how people who spend on three or more betting products backgrounds and women. Repeated lockdowns access their money. Many more transactions a month - were spending more time and, and the eventual end of furlough schemes are made using cards and contactless methods or, money gambling during lockdown; with and other Government support programs is with lower risks of spreading infection - this is gambling sessions lasting an hour or more up expected to make matters worse. likely to have the biggest impact on the most by 23% year on year in March 2020, according vulnerable who are often reliant on cash. to a YouGov poll Again, it is the vulnerable who are hit hardest. High street bank branch closures, meanwhile, Pandemic conditions increase the prevalence of further limit options for those without debit problem issues. Unemployment, bereavement and credit cards or access to online banking. and ill-health have deepened the difficulties With already vulnerable customers hit hardest many already faced. The pressures of recent and new groups becoming susceptible, it has months have seen many young people, never been more important to address financial students, single parents, private renters, people inclusion and support the needs of all customers. with health problems and those with disabilities become more financially excluded.

23 Resolution Foundation (July 2020) 25 The Guardian, Fifth of vulnerable people considered self-harm in UK lockdown, July 2020 24 The Guardian, Growing numbers of ‘newly hungry’ forced to use UK foodbanks (2020) 26 Gambling commision 10/46 Growth through financial inclusion | A roadmap for UK banks

• Young carers have been negatively impacted • The COVID-19 death toll has led to an during lockdown, often caring for longer increase in the number of people turning to hours on reduced incomes and with limited bereavement charities for support. Additionally, opportunities for respite27 the cost of funerals in the UK continues The financial inclusion to increase • Financial abuse goes hand in hand with problem domestic abuse with 95% of domestic abuse • The consequences of months of shielding, self- victims experiencing economic abuse28. When isolation, quarantine, lockdowns, government the UK went into lockdown due to COVID-19, guidelines and ongoing health concerns is victims found themselves “locked” at home with having a massive impact on the nation’s their abuser, which created more opportunities mental health for abuse. In May 2020, two months into the • For people not identified on the clinical first lockdown in the UK, Refuge reported a shielding list during the first lockdown, things weekly average increase of 66% calls to its were further exacerbated; for example, while national helpline, and visits to its website up by supermarkets prioritised deliveries for people 950% compared to pre COVID-1929 on the clinically vulnerable list, some disabled people were forced to access supplies through more expensive routes, such as local stores

27 Carers Trust, My Future, My Feelings, My Family (2020) 28 Surviving Economic Abuse, Surviving economic abuse and the Covid outbreak (March 2020) 29 Refuge, Refuge reports further increase in demand for its National Domestic Abuse Helpline services during lockdown (May 2020) 11/46 Growth through financial inclusion | A roadmap for UK banks

Influencing factors

The financial inclusion problem

While poverty plays a large part in identifying We also know that many people are teetering people who are financially excluded, there are on the brink of a financial shock. Families relying other factors at play; many of which overlap and on low and unpredictable incomes, youngsters intersect. We found that individuals who are coming out of care without family networks and financially excluded are likely to be impacted people spiralling into debt through gambling, by a number of factors rather than one theme are just some of the susceptible groups. in isolation. For example, an older man who COVID-19 has illustrated that it doesn’t take is homeless may experience mental health much to tip an individual, or whole families, problems and addiction, a young person from into crisis. an ethnic background who is subject to racial bias may also have a zero-hours contract with A 2019 report by housing charity Shelter unstable income, and a single mother who has stated that almost 3 million people are one survived domestic and economic abuse which pay cheque away from losing their homes has damaged her credit score, may also live in a because they would be unable to pay the rent. rural area with no access to the internet.

12/46 Growth through financial inclusion | A roadmap for UK banks

Gender

The financial inclusion problem

Working women are considerably more likely to about salary progression, social mobility and controlling behaviours used by perpetrators suffer financial hardship than men. A quarter financial security. of domestic abuse. It may manifest itself as of working women are in the so-called ‘Poverty financial control, dependency, exploitation or Zone30 compared to 16% of men. Women also often lose earnings due to sabotage. maternity commitments. Mothers struggling ‘The Poverty Zone’ is defined by the Financial to make ends meet are the predominant Many victmis are denied access to money or a Inclusion Alliance, as “being regularly unable users of unsecured, short-term, high interest bank account. Many others have debts placed to meet basic personal needs in a sustainable loans-sold door to door charging interest at in their name. On average, the mistreatment way”. Women are over-represented in the rates as high as 340%32. Since women usually lasts more than six years. This kind of abuse is Poverty Zone partly because lower-paid jobs take the primary role in childcare, it is not often unreported because it goes unnoticed or such as carers, cleaners, caterers, cashiers and surprising that working mothers with small people are unwilling to talk about it. clerical jobs are taken by mostly women. It is children find themselves in the bottom 20% of partly because of the gender pay-gap31. which income groups. As well as making it harder for the victim to sees women paid an average of 17.3% less than leave the abuser, the abuse may also give men. There are 33% more women on zero-hour Meanwhile victims of financial abuse tend women poor and unjustified credit ratings and contracts than men32. These jobs rarely have to be female. Financial abuse has long been push women into debt, financial dependence career development opportunities that bring recognised as one element within a range of and homelessness.

Gender

25% 33% of working women are in the ‘Poverty Zone’ as compared more women are on zero-hour contracts to 16% of men32 than men32

Approximately 910,000 women in poverty (14%) have Struggling working mothers are the highest faced extensive violence and abuse—most likely including consumers of expensive credit paying up to financial abuse33 340% interest on borrowed money32

Working mothers with small children are often in the bottom 20% of income groups32

30 Financial Inclusion Alliance: Tomorrow’s Company ‘Serving All’ (January 2020) 32 Financial Inclusion Alliance: Tomorrow’s Company ‘Serving All’ (January 2020) 31 ONS figures 2019 33 Financial Inclusion Manifesto 13/46 Growth through financial inclusion | A roadmap for UK banks

Ethnicity

The financial inclusion problem

A 2020 report by the Runnymede Trust34 Ethnicity, culture, socioeconomic influences, the race equality think tank, into economic and social context are all components which and social fairness in Britain, concluded that provide crucial insights into how and why extensive and persistent economic inequality is groups are impacted in different ways - these rife among black and minority ethnic insights are lost under the ‘BAME’ (BME) groups. umbrella grouping.

Caution is required when using the terms BME That said, research shows that people from and BAME (Black, Asian and minority ethnic) BAME backgrounds are more likely to be the because inequalities vary by ethnic group. For lowest-paid workers in any sector35. Research example, differences are greater for Black, also finds that people with Asian or African- Bangladeshi and Pakistani groups, less so sounding surnames have to send nearly twice for Indian and Chinese groups. Individuals’ as many CVs to get a job interview36. experiences differ as well in ways that are not Rowntree research shows that people from captured adequately by BME and BAME labels. diverse backgrounds are less likely to be Existing research referenced in this section found in senior management positions within uses the term BAME. As a firm, however, institutions and although representation of Deloitte is moving away from using BAME BAME workers in financial sector management because we believe it may prompt is growing slowly, as of 2018, fewer than one stereotypical responses and fail to reflect in ten management jobs in the UK are individual experiences. currently held by members of Black, Asian and other ethnic minority groups.

34 Runnymede Trust, The Colour of Money (April 2020) 35 Joseph Rowntree Foundation, Poverty and ethnicity in the labour market (2011) 36 Di Stasio and Heath, 2019 14/46 Growth through financial inclusion | A roadmap for UK banks

Ethnicity (continued)

The financial inclusion problem

In terms of financial services, BAME communities most wealth closely followed by Indian groups. communities ‘mistrust commercial providers, are less likely to have insurance and Black Pakistani households have under half the wealth who they believe are neither interested in nor households with low incomes are less likely to of white British households, with Black Caribbean understand their needs’38 and evidence suggests have mortgages compared to white households households possessing substantially less. Black people from ethnic minorities sometimes avoid with similar incomes37. African and Bangladeshi groups have much mainstream banks in the hope of finding better lower wealth. value for money, and increasingly turn to Trends show that BME people generally have credit unions39. much lower levels of savings or assets than white Trust is also an issue. According to the Community British people. White British households hold the Investment Trust, individuals from BAME

Ethnicity

BAME millennials are 47% more likely Around 18% of Bangladeshi workers, 11% of Pakistani to be on zero hours contacts and 4.17% less and Chinese workers, and 5% of Black African and Indian likely to have a contract at all than their white workers are paid below the National Minimum Wage41 peer group40

People with Asian or African-sounding Nearly 1 in 3 Bangladeshi men work in catering surnames have to send in nearly twice as and restaurants compared to around 1 in 100 white 41 many CVs to get a job interview41 British men

Less than 2% of top management roles in the UK are held by black employees42

37 Community Investment Coalition; Ethnicity and Financial Exclusion (2018) 41 Runnymede Trust, The Colour of Money Report (April 2020) 38 Kempson & Finney (2009) Saving in lower-income households: a review of the evidence 42 Yahoo Finance UK - Business in the Community, Race at the Top (2020) 39 The Guardian, UK banks have a racial discrimination problem. It’s time they admitted it (2017) 40 UCL Institute of Education (March 2020) 15/46 Growth through financial inclusion | A roadmap for UK banks

Age

The financial inclusion problem

Older people and older reported being the victim of fraud in An estimated 600,000 older people43 are the past year—equivalent to over 800,000 older financially excluded In the UK. Older people face people in England and Wales. a diverse range of challenges that may impact People over 65 find it harder to access insurance, their ability to access services. especially if they are disabled or experiencing a 44 Reduced mobility could cause problems serious illness. travelling to services which are far away, physical Younger people disabilities including deterioration of sight The squeeze on pay and the prevalence of and hearing can create problems accessing or insecure work means young people struggle understanding materials. Older people may to save. More than half of 22-29 year olds also find it harder to remember passwords and have neither a savings account or Individual security codes, particularly if they are living with Savings Accounts (ISAs)45. Many younger people cognitive decline. Financial security issues are are resorting to high-cost credit with recent raised if they are dependent on carers to assist figures46 demonstrating that 37% of payday loan with banking needs. borrowers were aged 25-34. Older people are at risk of financial abuse at Many young carers (under 18 years) and young the hands of a partner, carer or other family adult carers (16-25 years) live in low income member. This might be fraudulent use of money households and some are living in poverty. The or property or being put under pressure to act in time they spend caring affects their education a particular way in relation to financial issues. and employment opportunities as well as their A report by Age UK estimates that between 1 mental health. and 2 per cent of people aged 65 or over in the Children and young adults growing up in care United Kingdom today have suffered financial are least likely amongst their peers to participate abuse since turning 65 and that those who have in mainstream education, therefore missing out dementia or reduced cognitive function are on the basics including the opportunity to learn particularly at risk44. about managing their finances. Fear of fraud is also a significant factor for older people, with a 2019 survey44 finding that 7%, almost one in fourteen, of respondents aged 65

43 Age UK, Later in life survey (2019) 45 ONS Wealth & Assets Survey 44 Age UK, Financial Abuse Evidence Review (November 2015) 46 Finder.com, Pay Day Loan Statistics (2018) 16/46 Growth through financial inclusion | A roadmap for UK banks

Health and disability

The financial inclusion problem

Health—whether this is physical or mental The story of disabled people’s financial People with disabilities wellbeing—influences not only an individual’s inclusion is a complex one and is not simply ability to earn and manage their finances, but linked to a lack of money. Research47 by Scope also their opportunities to participate shows that one in eight (12%) disabled people in society. cannot physically access their bank; one in 12 (8%) want to protect themselves against 48% The Joseph Rowntree Foundation suggests that financial crises but feel they are turned down of all the 14.3 million people in poverty nearly half of people living in poverty in the UK for insurance. More than one-fifth (22%) come from a family where someone is come from a family where someone is disabled. said they are forced to pay higher premiums disabled48 Disabled people are also disproportionately because they are disabled. affected by the poverty premium, due to Scope also found that a majority of websites the high cost of living with disability and the and apps do not meet suggested UK additional costs paid for financial products and government guidelines on accessibility. This services, like insurance. 85% makes it harder for people who are visually or of disabled people cannot afford to People with disabilities tend to have fewer hearing impaired or experience cognitive issues save money, as compared to 79% of assets and savings and face greater difficulty to find the products and services they need at non disabled people49. securing a mortgage due to non-traditional affordable prices. employment patterns and, or, credit history problems. As with other vulnerable groups, disabled people are tempted by higher risk forms of credit. Research shows that about Research by Scope revealed that disabled 10% of disabled people take a cash loan people pay a financial penalty on everyday offered to them at their front door compared living costs that is on average £583 with just 3% of non-disabled people. more a month through a combination of the additional costs of disability and the poverty premium

1 in 8 (13%) disabled people have been turned down for 47 Ipsos Mori, Disabled People and Financial Wellbeing (July 2013) 48 Social Metrics Commission, Measuring Poverty (2019) credit in the last five years47 49 Wealth and Assets Survey 17/46 Growth through financial inclusion | A roadmap for UK banks

Mental health and addiction

The financial inclusion problem

Research undertaken by the Money and Mental anxiety—the two issues feed off each other to an application, however large bets or recurring Health charity indicates that people often lose create an ongoing cycle. examples of gambling that appear on financial control of their finances during periods of poor People experiencing mental health issues may records are likely to affect the success of a 50 mental health . In episodes of mental stress, face additional challenges—commonly addictive loan application. poor decisions can be taken which decimate behaviours such gambling, alcohol and drug use People who frequently gamble are more likely savings, create problem debts and damage a as well as homelessness. to miss their payments and other on-going person’s credit rating. The survey found that, The UK spent £14.5 billion52 on gambling in expenses related to bill payments, rent, credit when people were feeling unwell through mental 2018, while gambling addiction is estimated to cards and loan repayments. Missed payments health, 93% spent more than usual, 71% avoided cost up to £1.2 billion per year. Gamblers can and defaulted loans can negatively impact credit dealing with creditors and 59% took out a loan be prevented from accessing financial products reports and damage the credit worthiness of an that they would not otherwise have taken out51. and services as a result of their addiction53. individual. In fact, payment history is the biggest As a consequence, people struggling with mental The impact of gambling on a mortgage influencer of credit scores, which helps banks health can struggle to stay in work or manage application, for example, varies depending on decide on the loan approval process. spending, while being in debt and having the circumstances, and how much a person financial worries can cause severe stress and gambles. An occasional bet is unlikely to affect

Mental health and addiction

67% Half of people Intimidating debt letters are thought to be a key of employees in financial difficulty report at with problem debt also have a mental contributing factor to the 100,000 people in least one sign of poor mental health54 health problem51 debt who attempt suicide each year in England54

People with mental health problems are People in problem debt are three times more As of Dec 2020, new rules will make debt letters six times as likely to face a debt crisis54 likely to have considered suicide than people less threatening as part of the government’s not in problem debt54 effort to support people in problem debt55

50 Moneysavingexpert.com, New money and mental policy institute (March 2016) 53 Credit.com, Can gambling affect your credit score? (November 2016) 51 Money and Mental Health Policy Insitute, The Facts (2019) 54 Money and Mental Health Institute 52 UK Gambling Commission (UKGC) data 55 Gov.uk (October 2020) 18/46 Growth through financial inclusion | A roadmap for UK banks

Life events

The financial inclusion problem

Life is unpredictable. Unexpected events Homelessness Key triggers also include mental health, such as bereavement, poor health, abuse or The most powerful predictor of homelessness addiction (used as coping mechanism), relationship breakdowns can occur without is poverty, accounting for 25-50%56 of the relationship breakdowns, trauma (childhood/ warning, and cause significant disruption. Such explanation for whether someone had adverse experiences), being on benefits or events can be the trigger for pulling individuals experienced homelessness as an adult. trying to get access the benefits system. who were otherwise stable into extreme Homelessness is an increasing risk for poorer There has been an increase in the number financial difficulty. Additionally, an accumulation renters, particularly since the housing benefit of people who are sick or disabled who are of less obvious yet equally challenging freeze. Nonetheless, not being able to afford homeless in the past two years57 and more situations can lead to vulnerable circumstances. the rent is not the whole story. than a fifth of homeless households are from This gradual process can often be dangerous ethnic58 communities. as it’s not as easily detectable and it can take There are many social causes, such as a lack of one time to realise the situation they’re trapped affordable housing, and unemployment. People in. For example, suffering perpetual economic can become homeless when they leave prison, abuse from a partner or relative, or incurring care or the army with no home to go to. Many debt over time. homeless women have also escaped a violent relationship and may not have access to any forms of identity.

Homelessness

41% 45% of homeless people report a long- of homeless people have a diagnosed term health issue59 mental health problem59

66% 4,266 of homeless people report drug people were sleeping rough in the UK in or alcohol use as a reason for first 2019 (this fell to 2,688 after the launch of 61 becoming homeless60 the ‘Everyone In’ scheme in March 2020)

56 Devon Community Foundation, Housing and Homelessness (2019) 60 Crisis Skylight Final Report of the University of York Evaluation (2017) 57 The Independent, Homelessness among ill and disabled people rises 53% in a year (December 2019) 61 Gov.uk, Rough sleeping snapshot in England: autumn 2020 58 Gov.uk, Statutory Homelessness (October 2018) 59 Homeless Link (2014), The unhealthy state of homelessness 19/46 Growth through financial inclusion | A roadmap for UK banks

Life events (continued)

The financial inclusion problem

Citizenship and identity Funeral poverty Access to financial services is dependent on Funeral poverty is where the price of a funeral having the appropriate documents to verify a is beyond a person’s ability to pay, and it is a person’s identity. For people living in the UK, growing problem for people on low incomes. not having a passport, bank account or valid Soaring funeral bills are forcing more bereaved proof of address can create problems opening families to borrow money to pay funeral a bank account, which in turn creates expenses. On average, these people had to other challenges. find £1,981 to pay for the funeral. Most people funded some or all of their contribution with Recently arrived refugees, economic migrants, their own savings or investments (30%), a credit newly released prisoners and victims of human card (25%), or they borrowed money from trafficking are particularly susceptible to someone they knew (22%)62. this problem.

The Prison Reform Trust believes banks could do more for newly released prisoners who may struggle to open a bank account because they do not have the list of former addresses, identity documents and credit history required.

62 Sun Life, Cost of Dying Report (2020) 20/46 Growth through financial inclusion | A roadmap for UK banks

Financial literacy and education

The financial inclusion problem

Financial services are complex and increasingly According to research by UCL Institute of Financial Literacy and Education require digital access. We have found that Education (IOE) and University of Cambridge, financial literacy and education, alongside one in three adults in the UK cannot work out Nine out digital exclusion present two considerable the correct change from a shopping trip. Those of ten barriers to financial inclusion. aged between 16 and 24 perform particularly consumers in the UK feel that they are badly. Perhaps unsurprisingly, young people undereducated in terms of personal finance63 Complex financial language makes it difficult feel particularly disadvantaged and would for many UK customers to understand the like to know more about financial products financial products and services available. available. Student finance and mortgages are The challenge appears to be two-fold; first commonly cited as subjects where help 50% of UK a lack of understanding of the financial is required. customers believe it is their bank’s duty to products themselves, and second, a difficulty 63 Language is also a likely barrier to financial help them make better financial decisions in developing this understanding due to inclusion. The average reading age of an adult in the complex language used across financial the UK is between 9 and 11 years old, according services. to ONS research in 2017. The technical jargon, Poor financial literacy means that individuals acronyms and abbreviations associated with 75% are less likely to make good decisions about banking and finance are notoriously difficult of young people in the UK get their financial understanding from parents and other family money because they lack the ability to assess to fathom for even the most determined and members63 financial risks and opportunities. Knowledge literate customer. deficits also increase the chances of being Equally, the tone and vocabulary used for caught by fraud or a scam and could magnify delivering the consequences of not complying the physical and mental health issues with lengthy terms and conditions could be 82% associated with being in debt—making it harder off-putting and even threatening to wavering of students would like more financial to find appropriate solutions. customers. education in school64 Although some financial education is now compulsory in schools, it is not part of the GCSE curriculum, and is not embedded in 39% primary education. of adults (20.3 million) don’t feel confident managing their money65

63 Business Insider, Research by Bank Leumi and cited by ‘Finextra’. 65 Money Advice Service, Market Segmentation (January 2019) 64 London Institute of Banking and Finance; Young Persons Money Index https://www.libf.ac.uk/study/financial- capability/young-persons-money-index 21/46 Growth through financial inclusion | A roadmap for UK banks

Digital exclusion

The financial inclusion problem

With the widespread closure of bank branches - 53% of UK outlets closed between 1989 and 3.8 million 201666 - the ability to access many financial UK households have no internet access at all67 products and services now depends on costly technology, digital literacy and access to the internet. 8% of people in the UK (4.3 million people) are estimated to have zero basic digital skills68 In this increasingly online age, those who do not engage effectively with the digital world are being left behind. Technological change 8 in 10 means that both digital skills and access to up- people have concerns about online security69 to-date technology are increasingly important for connecting with others. This applies to education, social, health and well-being, and Older age groups financial products and services as well as and digitally excluded households still remain significantly less likely to 67 meeting the changing demands of have internet and are still reliant on the post the workplace. In 2019, 7% of adults suffered fraudulent debit or credit card use from using the Older people are less likely to have the digital internet in the last 12 months70 literacy skills needed to access information online while some younger people struggle to pay for the digital technology required to 47% of the 4 million connect effectively. People who live in rural adults who had never used the internet in 2019, were aged 75 years and over.71 locations with poor internet connection or who cannot afford fast broadband connections are also at a disadvantage. Older, disabled people are least likely to use the internet, while younger disabled groups are just as likely as their non-disabled counterparts to use it72 The digital divide between those who have access to information and communications technology and those who do not, presents 17% another barrier to financial inclusion. of 16-24-year olds say they have had trouble paying for their communications technology services in the last year67

66 Financial Health Exchange, Abandoned Communities Report (July 68 ONS, Exploring the UK’s Digital Divide (March 2019) 71 ONS, Internet users UK: 2019 2016) 69 LLoyds Bank, UK Consumer Digital Index 2018 72 ONS, Internet Access - households and individuals, Great Britain (2019) 67 Ofcom, Access and Inclusion in 2018 (January 2019) 70 ONS, Internet Access and use in Great Britain (August 2018) 22/46 Growth through financial inclusion | A roadmap for UK banks

Gaps and challenges

To gain a deeper insight into today’s barriers education around basic money management. with a local group or a partnership with a Gaps and challenges to financial inclusion, we carried out research, They also give practical support and advice with national charity, a person supported through including interviews, with a range of charities finding employment. these organisations might experience a ‘warm and social enterprises. We talked to them handover’. However, if someone’s support To have real impact, the banking sector and about the effect of COVID-19, the solutions comes from elsewhere, that experience could community groups should strengthen their that are currently on the market and the feel very different. ties, working closer together to ensure a holistic interventions they feel could have the biggest understanding of an individual’s circumstances. Specialised support is needed positive impact. This coupled with our existing This will help identify the immediate support research, allowed us to identify several Life has a very short-term focus for the most required and what’s needed to get people overarching challenges which we have excluded in our society. People living hand to on their feet. A collaborative approach outlined below. mouth are unable to think beyond their basic should ensure all blind spots are covered— needs for that week. One-to-one specialist The banking sector, charities and social for example, while charities may lack the support could help individuals navigate the enterprises need to forge stronger links to resources of banks, their personal contacts and financial system, while things are still under tackle the challenge grassroots support means they can provide control. Understanding the specific challenges The complexity of circumstances makes unique insights which banks would struggle that people are faced with, and identifying it apparent that a collaborative approach to access. tailored solutions, as opposed to a ‘one-size between retail banks, charities and the private Financial inclusion is often a low priority for fits all’ approach is crucial here. sector is required to fully address existing third sector organisations when they are Many third sector organisations play a challenges. These organisations cannot work dealing with clients’ complex and multifaceted pivotal role in educating and informing their in isolation, as each serves a unique purpose issues. Charities may only become aware of a clients about their financial options, but this in an individual’s journey. client’s financial difficulties when the situation knowledge is dependent on individuals’ local People from deprived communities who has become extreme. Through a more rounded networks and contacts, with little do not have support networks in place are relationship, the third sector and banks could formalised training. particularly susceptible to financial exclusion work in partnership to provide earlier and more People with mental health and resilience and, are more likely to seek support from local effective intervention. challenges, such as care leavers or victims community groups they feel they can trust, How banks interact with vulnerable people can of abuse, are also less prepared to address than engage with financial institutions. depend on the connection the bank has with their finances or seek employment, and need Community groups provide targeted support the group or charity supporting that individual. hands-on support and guidance at key to build confidence, self-esteem and deliver For example, if a branch has strong connections life stages.

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Gaps and challenges (continued)

Systemic change is required individuals who are most in need of financial ‘outgoing’ mean and how to pay rent, before Gaps and challenges Currently banks are mainly focused on support are the least able to get it. As a result, they start learning about ISAs and APRs. people on low incomes are turning to higher supporting and meeting the needs of their Financial education could also be offered at risk forms of credit which come with crippling existing customers and dealing with the key life stages, for example, at the point of interest rates. This is, in part, due to bank impact of COVID-19 on their own business. independent living, when individuals get their loan application processes not evaluating Existing products and services are no longer first job, emerge from debt, open their very individual’s circumstances holistically and a lack serving the shifting needs and preferences of first bank account and so on. customers that have been triggered since the of trust in the system on the side of customers. Building financial education into the pandemic. We suggest that a more forward Need for simple and targeted curriculum is to be welcomed but vulnerable thinking, inclusive approach would be to ensure financial education all products and services are designed with people not in education and employment (and We know there are a myriad of financial vulnerable people in mind—a shift which would who most need the advice) can miss out on education solutions on the market with varying benefit everyone. these valuable lessons. In addition, we believe levels of success. These range from educational that good money management skills need Financial exclusion can impact anyone and the resources for schools to websites full of advice, to be deep-rooted at an early age to prevent pandemic has shown how quickly individuals workshops and one to one support. However, negative behaviours becoming engrained. can move from relative financial security into the central issue of the complex nature of financial crisis. However, most available financial financial products and the language associated The challenge is further aggravated because products and services have not kept pace with with them is still a barrier for many people. people most in need of financial education, our ever evolving society. For example, people Resource developers should be mindful of are the least likely to go looking for it in with disabilities have found themselves digitally the approximately nine million adults in the conventional places. We would argue that excluded because many websites selling UK are functionally illiterate73 and that the UK- consideration could be given to more essential goods and services are not accessible. wide average reading age is equivalent to the creative routes to connect with hard-to-reach In fact, a study sponsored by the UN in 2005 expected reading age of a 9-11 year old.74 audiences through influencers, gamification with accessibility agency Nomensa, found and existing platforms with high traffic. We believe there is a gap in basic financial that 97% of websites in the UK did not meet education that needs to be closed before minimum levels of accessibility. more complicated issues can be addressed. The nature of the banking system, with For example, people should understand its extensive risk evaluations, means that how to open a bank account, what words like

73 The Guardian, Britain’s battle to get to grips with literacy 74 Office for National Statistics, How we read on the web (2017) 24/46 Growth through financial inclusion | A roadmap for UK banks

Gaps and challenges (continued)

Banks need to be more approachable Many vulnerable groups view bank branches Banks need to re-think their role to Gaps and challenges We know that 50% of the unbanked would as intimidating and accessibility is a challenge support prevention prefer to go without a bank account, relying for many disabled people with even simple The breadth and depth of data held by banks on friends and family for support instead. We tasks like withdrawing cash proving difficult. about an individual offers an insight into discovered that roughly 70% prefer to borrow Increasing digitisation of banking in branches, an individual’s behaviour that is not widely from friends and family due to a mistrust such as automatic paying-in points, may help known. When viewed through a financial in institutions, a fear of being in debt, past people who struggle with face-face interaction inclusion lens this knowledge provides an experiences with pay day lending, and the but presents an additional barrier for people opportunity for the sector to play a more perceived reduction in risk borrowing from a uncomfortable with technology or with visual preventative role; flagging behaviours and friend or relative. impairments. patterns and putting mechanisms in place to support individuals before the situation There can be a fear of engaging with financial Telephone banking also has its challenges. escalates. This intervention has the potential institutions among the homeless, young Older people in particular are often to be lifesaving, particularly in the light of the people, victims of abuse and other vulnerable agitated by having an inconsistent customer recognised link between financial abuse and groups. There is however an opportunity experience, for example, speaking to different murder by the abuser. However, it does also to break down barriers, for example by representatives and having to explain their raise interesting ethical questions around training contact centre and branch staff. situation multiple times. The trend away from the role a bank should play in supporting its Consciously or unconsciously, the excluded human contact, with the increasing use of customers and where lines should be drawn. may remain excluded because of language and artificial intelligence (AI) and robotics, limits appearance. the opportunity for vulnerable customers with complex circumstances to build trust with Financial institutions could simplify their their bank and see it as a ‘safe space’. This is complex language. Bearing in mind the particularly pertinent to vulnerable groups surprisingly low average reading age in the UK, who are less likely have a query which matches there is an opportunity to apply more concise the call centre script. and approachable language to financial products and services. However the central position of banks on our high streets delivers an opportunity to re- Using hyper-personalisation, banks can think the breadth and depth of the role they integrate behavioural nudges into their play. Branches could develop more engaging product design in order to reach underbanked relationships with customers through customers. There are both demand-driven stronger local connections and charitable and supply driven factors that help explain collaborations to provide a range of additional why some customers are underbanked. support services. 25/46 Growth through financial inclusion | A roadmap for UK banks

The opportunity to make an impact

Using the insights gathered, we lay out six highlighted the need to develop and deliver banks need to evaluate risks of bias, conscious areas of opportunity for banks and Deloitte to innovative financial products and services or unconscious, directed towards the financially improve financial inclusion. which support all customers. Banks have an excluded. They should investigate ways to make opportunity to play a crucial role in the UK holistic, rather than purely financial, decisions. The opportunity to make As well as improving existing customers’ economic recovery through transforming the an impact financial well-being, we believe financial way they look at financial inclusion and how There is also an opportunity for banks to review inclusion will build trust and help attract new they structure themselves to support it. their target customer base post COVID-19. customers. At the core, the six measures involve innovative product and Personalised banking service development. People who are financially excluded face Building on the lessons learnt from complex issues that further isolate them from COVID-19 trusting financial institutions. Addressing these Consumers have taken a hit on both their challenges could inform the development of financial resilience and mental health as services and products specifically designed to a consequence of COVID-19. Banks have target an individual’s needs and wants. responded quickly and flexibly to alleviate the financial strain on customers—particularly The creative design and production of financial those most vulnerable—with a compassionate products calls for a bottom up approach approach and innovative credit solutions. and insight which reflects a customer’s real life requirements. ‘One size fits all’ does not As social-distancing restrictions persist, the work because individual circumstances vary strain will continue. The onus is on the financial considerably across different social, cultural services industry to support consumers in ways and community contexts. Financial inclusion that are responsible and most likely to lead to should be embedded as a criterion during the long-term positive outcomes. early stages of product development to ensure that new digital products for financial services Looking to the future, banks can build on the are designed with this in mind. lessons of COVID-19 to address the needs of the most vulnerable, ensure an accessible and Banks should review existing processes around inclusive approach. COVID-19 has raised the opening current and savings accounts, granting profile of financial inclusion within banks and loans, mortgages and insurance. In doing so,

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The opportunity to make an impact (continued)

Specialised support Banks have a pivotal role to play in identifying Understanding the needs and wants of an early triggers and applying behavioural nudges individual means looking at life through their to intervene appropriately at the relevant The opportunity to make eyes. It means understanding the relevant stages. They hold the data and capability to an impact factors and nuances. In order to achieve the identify unusual spending, fraud and financial greatest impact, end to end support solutions abuse. They can analyse transactions to flag are required which consider people holistically. difficulties individuals may be experiencing. A dynamic and responsive process of listening Supplementing this information with knowledge and learning prior to implementing is about the lived experience of financial exclusion therefore critical. should enable banks to spearhead support to the most vulnerable. Solutions to address this This approach can be supplemented with would require GDPR considerations. personalised advice, tailored to individuals’ circumstances with ongoing specialist support. Wider collaboration and knowledge-sharing Within communities impacted by poverty or among stakeholders is key to understanding social isolation, being able to interact face to first-hand experience of financial exclusion. face with someone and engage at frequent Working with social enterprises, charities and touch points with support providers is crucial public sector organisations would enable better for establishing strong, authentic and trusting understanding of the situational contexts and relationships. Credit unions and charities current obstacles individuals face. This insight have mastered this approach and warm- should allow banks to pre-empt the negative handovers with such organisations will play an outcomes of financial products that do not important role. accommodate and/or are inaccessible to certain individuals. Prevention is critical in supporting vulnerable people. How can we support people to be more pro-active about their own finances and enable the banking sector to play a part in detecting challenges early on?

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The opportunity to make an impact (continued)

Approachable banking Staff should feel confident in handling Banks also have some work to do in terms challenging circumstances but have the of customer perception. Can they make support of specialist teams if an individual’s The opportunity to make themselves more accessible, working alongside needs are especially complex. an impact customers as a trusted friend, to encourage honest conversations to take place, without There is more to be done to make products and fear of negative implications? Ensuring a warm, services easy to understand through the use kind and compassionate tone and approach— of more accessible language along with a need irrespective of circumstances—would improve for more channels offering free independent communications with customers who might be guidance for the most excluded. subject multiple anxieties and stress.

Staff training and cultural change is essential if banks want to improve financial inclusion. This might include raising awareness around specific circumstances such as mental health, but it is also about developing an understanding about the causes of an individual’s disadvantage and offering an empathetic approach which might pre-empt a situation getting any worse.

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The opportunity to make an impact (continued)

Money made easy Together, the impact will enhance financial well- To be effective, financial education needs to being. Moreover, there are social, health, and be accessible, digestible and framed to suit economic benefits to be achieved. Education The opportunity to make customer capabilities, preferences, motivations is required at school ages with reinforcement an impact and behaviours. As well as delivering facts, it throughout adult life. should give people the confidence to interact with financial institutions so that they can Low literacy and numeracy skills in the UK make good decisions and build a trust-based population as a whole combined with limited relationship with their bank. access to effective financial education is making financial-decision making increasingly As things stand, financial language, or jargon, is onerous for consumers. Problems with financial a significant barrier. It is our belief that it is the decision-making are particularly evident among responsibility of banks to simplify the language financially excluded individuals. Enabling and terminology they use to describe banking education, meanwhile, can be targeted: for products and services to enable more people example, to support debt prevention strategies. to access them successfully. Without financial knowledge, people may Financial education has two main functions: choose unaffordable financial products 1. To enable individuals to better manage because they appear to be the only option. their own finances and make good Lack of knowledge, low awareness of terms and financial decisions conditions which can acquire debt, reduced 2. To shine a light on an individual’s own options, and reduced assets and savings can all spending patterns and habits so that they expose people to financial vulnerability. can make better decisions based on their own tendencies and behaviours

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The opportunity to make an impact (continued)

Inclusive financial services sector Purpose-driven financial organisations that To become fully inclusive, the financial services show empathy and inclusion are likely to be sector needs to embrace diversity at all levels recognised as industry leaders. In their actions, The opportunity to make forging ties with charities and embedding they demonstrate they are playing their part an impact itself into the local ecosystem. Research from not only in the economic life of the nation, our Better Banking survey demonstrated that but also enabling longer term stability and customers are more likely to choose a bank wellbeing of society. which makes a positive social impact. There is an opportunity for the financial We believe there is an opportunity for banks services industry to collaborate on practical to recommunicate their values and explore and powerful initiatives to lessen a range of opportunities to strengthen financial distress. inclusion and create opportunities to support the more vulnerable through re-skilling and Market leaders in banking services will see apprenticeship opportunities. There is also financial inclusion as more than a nice-to-have an opportunity for banks to improve diversity add-on. It will be at the heart of all they do. within their organisations by recruiting and investing in the development of more diverse talent.

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The opportunity to make an impact (continued)

In 2021, Deloitte will launch a Financial Inclusion of the crisis, even more people are suffering Financial Inclusion Network, please visit Network to bring together people from across poor financial wellbeing or are at risk of tipping our website. the financial services industry, charities, social into financial difficulty. Many are finding they The opportunity to make enterprises and the private sector. are unable to access the financial products It is our intention to engage across the sector, an impact and services they need to get their lives back to fan the flames of constructive debate, and to Our aim is to share information about on track. drive change. Should you wish to discuss how problems, causes and best resolution practice. we can work together, please get in touch. In collaboration and with innovation, we have There is an opportunity for banks to support the best chance of achieving the shared goal of their existing customers and attract a broader improving financial inclusion in the UK. customer base. As this paper has shown, a collaborative approach is likely to produce Now is a critical time in the development of greater positive impact. financial inclusion. The COVID-19 pandemic has worsened a situation that was already To read more about our work improving affecting millions of people in the UK. Because financial inclusion, and to sign up to our

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Contacts and Authors

Authors

Zeinab Chaudhary Lucy Traynor Claire Burton Manager, Senior Manager, Director, Human Capital Human Capital Head of Responsible Business +44 20 7303 6557 +44 20 7303 4409 +44 20 7303 4816 [email protected] [email protected] [email protected]

Contacts

Richard Hammell James O’Riordan Partner, Partner, Sponsor Lead for Financial Inclusion Head of Financial Services UK Chief Global Officer, North South Europe +44 20 7303 7549 +44 20 7007 4933 [email protected] [email protected]

Richard Kibble Margaret Doyle Partner, Partner, Head of Banking UK Chief Insights Officer, Financial Services +44 20 7303 6761 +44 20 7007 6311 [email protected] [email protected] 32/46 Growth through financial inclusion | A roadmap for UK banks

Acknowledgements

We would like to acknowledge the contribution from Paul Sutters, Nicola Weir, Elena Karvouni, Folabi Ajayi, Adam Siddat, Paula Scott, Simon Stacey, Lucy Winship, Aarti Guru, Srikanth Reddy, Maximilien Lambertson, Roshan Babu and Kalyan Perugu.

We would like also like to extend our appreciation to the following societal partners for the taking the time to share their insights with us.

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Appendix Appendix

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Existing initiatives addressing financial inclusion in the UK

Since the term ‘financial inclusion’ first emerged unions, social enterprises and specialist affiliation or community connection. Much like in 1997, many milestones have been passed; charities tend to receive a warmer welcome traditional banks and building societies, they Basic Bank Accounts were introduced in 2003, from consumers. can offer a range of savings accounts, current HM Treasury published ‘Promoting Financial accounts and loans but their not-for-profit There are currently 100,000 social enterprises Inclusion’ in 2004 and the Financial Inclusion framework establishes tends to engender trust operating in the UK. Some social enterprises Task Force was set up in 2005. with members. support people directly with alternative low- Over the past decade, the UK government, cost financial products while others address To appreciate the current response to financial inclusion, we have considered the initiatives financial institutions, FinTechs, charities the underlying causes of financial exclusion by, Appendix and social enterprises have responded to for example, providing employment, boosting currently being offered under five the challenge of financial inclusion with confidence and signposting people towards broad categories: multiple products, programmes, initiatives additional local support and solutions. These • Relieving debt and technology solutions. In 2014 financial specialised services have been helpful in • Easing access to financial services education was introduced into the National targeting specific issues experienced by the Curriculum and in 2015 the Financial Capability aforementioned groups, moving beyond the • Improving financial literacy Strategy51 for the UK was launched by the mainstream product offerings which oftentimes • Addressing specific needs Money and Pensions Service. lack the nuance required to assist the most • Response to COVID-19 disadvantaged. While many of these measures have encouraged more people to access the Specialist charities build close and trusting banking system, financial inclusion is still a relationships with the people they support and challenge; availability of suitable ID, limited provide a variety of options for people who money management skills, low levels of financial are financially excluded. As well as the tailored literacy, and digital exclusion all present guidance for a particular issue—such as mental considerable barriers. health, homelessness or disability—many charities run campaigns to improve access to Trust and suspicion of global financial benefits, education, training, jobs and institutions remains a challenge—as online resources. demonstrated by the thousands of UK residents who choose not to open a traditional Credit Unions are run by members who have bank account—while community-based credit something in common such as a religious

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Relieving debt

Individuals borrowing more and more money, Retail banks and greater control over spending with the use at higher and higher interest rates, can find Retail banks offer advice in this area both in of prompts and notifications, which remove themselves in a never-ending debt cycle. People branch and online. In October 2020, the ‘Stop cognitive effort and increase understanding of who are financially excluded are more likely to the #DebtThreats’ campaign, which is backed one’s financial situation. Examples likePlum, experience this kind of debt and resort to high by many retail banks, successfully persuaded Wollit and Tully deliver smart saving tools, interest rate options that are easier to access the government to change the decades-old bespoke budgeting and accessible banking such as pay-day and door-stop lenders. People law where lenders send intimidating letters to services. In 2019 Nationwide launched it’s who don’t use banks or accredited lenders are people with problem debt, negatively affecting ‘Open banking for good’ challenge, partnering often borrowing from family and friends but their mental health and contributing to suicidal with seven FinTech companies to address this brings its own problems. thoughts. Lloyds has partnered with the financial inclusion. Appendix Close personal relationships between Good Things Foundation to deliver financial borrowers and lenders can add stress rather inclusion programmes which show how digital than be helpful. Payment terms may be unclear, can empower people to build their repayment can be demanded at any time with financial capability. little notice, and conditions under which people FinTechs borrow can subject them to economic abuse. On the whole, the FinTech approach nudges As these are usually personal arrangements, behavioural change by tracking spending, borrowers and lenders are exposed. There setting up budgeting pots or encouraging is no regulatory protection, and the fear of regular saving. Nudges are a resourceful way upsetting friends and family can be a further to switch away from harmful behaviours and barrier to seeking help. encourage positive habits. Nudges which are tailored to a consumer’s specific goals or needs enable better financial management

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Relieving debt (continued)

Challenger banks Credit Unions and Natwest are backing in 2015 and reports of the social impact of its Challenger banks have also shown themselves PayPlan which offers products and advice for work in an annual review. people on low incomes or who find themselves to be innovative in this area, incorporating Charities money management elements into in a financial crisis. Customers can contact Charity StepChange helps people with money their accounts. PayPlan via secure and accessible social media platforms such as WhatsApp. management and financial difficulties through Credit unions free, confidential and personalised expert debt Social enterprises A survey of credit union members by the advice, both online and on the phone. Financial Inclusion Centre75 found the Social enterprises are also offering alternative Appendix majority of respondents viewed a credit union financial products; MoneyLine provides as an invaluable alternative to high-cost credit affordable low-value loans to low-income such as payday loans, rent-to-own firms and households while Fair Finance aims to deliver door-step lenders. Credit unions are leveraging financial services that improve the financial this trust to deliver loans and services wellbeing of its clients. with kinder terms than banks. They have Social enterprise lender Fair for You was set up successfully engaged with partners such as the as an alternative to payday loans to provide ‘fair, Scottish Government and Library Services to flexible and affordable credit’ for vulnerable offer additional services and encourage low-income families. It has provided a total of regular saving. £10 million in loans since it was established

75 The Financial Inclusion summary report (2018) 37/46 Growth through financial inclusion | A roadmap for UK banks

Easing access to financial services

Hurdles faced by people wanting mortgages, In 2018 the UK government launched a Help loans and insurance as well as savings and to Save scheme, which is a type of savings current accounts, are a significant factor in account which allows certain people entitled to financial exclusion. Our research suggests Working Tax Credit or receiving Universal Credit that FinTechs, challenger banks and charities to get a bonus of 50p for every £1 they save are moving faster in this area than more over four years. established financial institutions.

In general, FinTechs, have made it much easier Appendix for new customers to open an account, with the whole process usually achieved, online, in minutes. However, there has been some controversy around e-money institutions— including instances of customer accounts being frozen, leaving vulnerable people unable to access their money.

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Improving financial literacy

The UK government, financial institutions, The Financial Inclusion Alliance has produced manage their finances and to improve their FinTechs as well as charities and social a report with Tomorrow’s Company77 which financial understanding. enterprises have tried to bridge the knowledge explores the roles of businesses in developing In a report written in 2019, FT Advisor78 gap in finance by delivering advice and financial security, wellbeing and inclusion assessed a number of financial education education across a broad range of channels. strategies to help Britain’s working poor. initiatives and highlighted the importance of Financial education is now part of the Credit unions are less visible in this area; the professional qualifications of the person National Curriculum and in 2015 the Financial concentrating on financial ‘health checks’ and delivering the training, the positive impact Capability Strategy76 for the UK was launched delivering financial advice via their websites of ‘gamification’ on young people and the by the Money and Pensions Service. Appendix while retaining focus on responsible saving. increased likelihood of engagement if the Employers are increasingly mindful of the content feels relevant and tailored to the The Charities play an important role in negative impact of money worries on their audience. providing targeted one-to-one support to their employees and many offer ‘financial wellness’ clients to help them understand what support advice and guides as part of their HR resource. and services are available to them, how to

Retail banks are working hard on initiatives to address this issue— The challenger banks have also been proactive through both general and targeted solutions. For example, Natwest although on a smaller scale—MetroBank has introduced MoneySense is a free financial education resource for schools, parents & a financial education programme for kids and adults and young people aged 5-18, NatWest has teamed up with broadcaster Emma Monzo has an initiative ensuring customers in financial Gannon to produce a guide for freelancers and Barclays has ‘Money Mentors’ difficulties are contacted in person with tailored advice. offering online information and practical learning activities related to budgeting, managing debt and credit scores. The Big Exchange, which is aiming for ‘a financial system which works for everyone’, offers accessible advice about how to choose and use financial products on its website. HSBC UK has a primary school initiative called Fairer Tales: Stories, Roles and Dreams Among charities, The Money Charity is committed to This initiative is targeted at First Steps learning for Reception, year 1 and financial inclusion, delivering free workshops for 11-19 year year 2 in a range of formats including classroom, digital and video. They olds, training for adults to help anyone get on top of their take familiar fairy tale stories and add a twist to them to support financial money and a free budget builder tool. The Just Finance education. This encompasses things like an exploration of why we go to work, Foundation is working with schools to offer Lifesavers earn money and how this influences our financial decisions. financial education.

76 The Financial Capability Strategy 77 Financial Inclusion Alliance: Tomorrow’s Company ‘Serving All’ (January 2020) 78 FTAdvisor, Improving financial education (December 2019) 39/46 Growth through financial inclusion | A roadmap for UK banks

Addressing specific needs

To reach customers facing specific difficulties in July 2020 estimates that 28 million personal Health and Income Commission has been some organisations have chosen to partner current accounts do not have the option to set up by the Money and Mental Health Policy with third sector organisations while others block gambling expenditure. Commission to examine the link between have taken a more direct approach. In this mental health and income. In collaboration with GambleAware, which section we take a closer look at the initiatives commissioned the study79, the researchers Lloyds launched a partnership with Mental which have been launched to tackle: put forward a number of proposals to improve Health UK in January 2017 and in 2018 launched • Gambling the effectiveness of gamble blockers. The its “Get the inside Out” campaign, again • Mental health suggested measures include calling on the with the charity, aiming to help normalise Appendix Financial Conduct Authority to recommend conversations around mental health in • Bereavement gambling blockers as standard on debit and society. The bank has raised over £11 million • Financial abuse credit cards, and proposal for a cross-sector in fundraising for Mental Health UK since • Homelessness consumer awareness campaign placing bank the partnership began and aims is to raise a • Disabilities and health card blockers alongside other forms of self- further £4 million by the end of 2021 to expand exclusion and player controls. ‘Bloom’—a UK-wide program delivered in • Modern slavery schools and colleges which supports young Gamcare offers specialist advice to problem people’s mental health resilience. Gambling gamblers whilst also providing gambling From April 2020 the Department for Culture, blockers software direct to consumers. Bereavement Media and Sport imposed a ban on credit Mental health In 2016 banks, building societies, charities, trade cards being used for gambling and over the last bodies and consumer groups came together HSBC UK launched a mental health education two years, eight banks, including HSBC, Lloyds, to form the industry’s first Financial Services programme for its employees in 2019 and First Natwest and Monzo, have begun offering Vulnerability Taskforce, chaired by Joanna Direct has partnered with Mind to offer mental gambling blockers on certain products and Elson OBE, Chief Executive of the Money Advice health training across its organisation. The First ranges. These enable customers to temporarily Trust. They agreed a set of principles and Direct initiative includes Mental Health First prevent spending on a bank cards at gambling recommendations for the industry to deliver Aiders and a core team available to take care of outlets, both online and in-person and it’s improved outcomes for customers. Under the customers identified as being estimated that these cover 60 per cent of Vulnerability Taskforce principles, the UK’s largest acutely vulnerable. personal current accounts. high street banks and building societies worked to Mind supports people with accessing benefits design and deliver the Bereavement Principles for However, a review of the availability, uptake, and and sick pay and is currently running campaigns personal banking customers, to offer greater help effectiveness of bank card gambling blockers around Back to Work, Sanctions and the and support for bereaved families. in the UK released by the University of Bristol Work Capability Assessment. The Mental

79 University of Bristol: Money and Gambling; insight an evidence 40/46 Growth through financial inclusion | A roadmap for UK banks

Addressing specific needs (continued)

These included greater consistency in steps taken Lloyds Banking Group has set up a Specialist Monzo and The Big Issue partnered on a pilot following the notification about the death of a Domestic and Financial Abuse Team in to enable The Big Issue vendors to re-sell their loved one, and an internal one-stop notification partnership with Surviving Economic magazines digitally by their customers “paying system across products within UK brands80. Abuse (SEA). The bank is also backing the it forward”. Vendors, who were set up with government’s #YouAreNotAlone campaign— Monzo accounts, benefited from additional Financial abuse which helps those suffering from domestic revenue from the additional sales. In 2017 UK Finance’s Financial Abuse Project abuse—and is working with Relate to assist Group and Consumer Advisory Group brought customers solve financial difficulties associated together representatives from charities, victim with their relationship. Appendix support groups and government departments to develop a voluntary Financial Abuse Co-op has run a financial abuse awareness Code of Practice. The ambition is to increase campaign with Refuge while Santander’s awareness and better understanding of what ‘In Someone Else’s Shoes’ was designed to financial abuse looks like for firms, colleagues, increase awareness of the same topic during victims, potential victims and their families, and Domestic Violence Awareness Month. ensure more consistent support for those who Homelessness need it. HSBC UK’s ‘No Fixed Address’ plan is helping In June 2019, HSBC UK introduced an people without a fixed home address by untraceable sort code as part of a new providing them a bank account, in partnership procedure to identify victims of financial abuse with Shelter, and other UK charities. It aims and help them regain control of their finances to lift people out of homelessness, by giving and in October 2019, NatWest announced them a safe place to keep and spend money a £1m fund for SafeLives for the support received from work benefits. It also helps them of economic abuse victims. Together they spend or save towards their future. Following have published a guide to help highlight the a successful pilot in Liverpool, the service is signs that someone may be experiencing currently live in 31 selected branches in major financial abuse. UK cities including London, Birmingham and Manchester.

80 UK Finance 41/46 Growth through financial inclusion | A roadmap for UK banks

Addressing specific needs (continued)

Disability and health Modern slavery Several banks, including Lloyds offer support HSBC UK has launched its ‘Survivor Account’ to customers facing long-term health problems for victims of human trafficking and modern such as cancer in partnership with Macmillan. slavery as they work to rebuild their lives after Among other things, customers can get help the trauma of trafficking, forced labour, sexual with mortgage payment holidays. exploitation or domestic servitude.

Scope campaigns to create a fairer society Santander is a founding partner of Stronger for disabled people and their families and Together supporting organisations to tackle Appendix runs a number of campaigns including a modern slavery and also works in partnership push to reform sick pay. In 2014 it set up with the Gang Masters & Labour Abuse an independent enquiry—Extra Costs Authority to protect vulnerable and Commission—to explore the additional exploited workers. financial burdens placed on disabled people and their families.

Website regulations came into law for UK public sector organisations in 2018 which require the inclusion of an accessibility statement on websites and ask for website or mobile apps to be made more ‘perceivable, operable, understandable and robust’.

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Responses to COVID-19

Financial institutions responded swiftly to the support young entrepreneurs and Lloyds ‘We pandemic, with mortgage holidays, easing of are Digital’ training was set up to help people credit conditions and support on websites and access online services such as food shopping social media. The government and HMRC have and offered priority access to NHS workers. been widely congratulated for communicating In the charity sector, StepChange and PayPlan and implementing their grant and employment have been offering guidance and support to support programmes with clarity and speed. people facing debt and Turn2us has made They have made good use of social media, 3,306 grants totalling £1,952,63783. video and email to reach out to people who Appendix are entitled to support. In September 2020, Nesta the innovation foundation, launched it’s Rapid Recovery Many other organisations have also provided Challenge to find and support tools and useful online calculators and advice, notably services which improve access to jobs and Citizens Advice and money for people across the UK hardest hit Moneysavingexpert.com. by the pandemic. This £2.8million challenge 84 A University of College London study found is funded by Nesta in partnership with JP that the government’s “Everyone In” scheme Morgan Chase Foundation and Money and that rapidly moved 15,000 homeless81 people Pensions Service. into emergency accommodation at the start of the pandemic, saved tens of thousands of England’s most vulnerable people from catching the. It also prevented as many as 266 deaths82. The successful collaboration of individuals, charities, local organisations and celebrities that made ‘Everyone In’ a success, is galvanising these groups to work together again to implement measures to prevent a return to pre-COVID levels of rough sleeping.

A new partnership between NatWest and the Prince’s Trust has created a £5million fund to

81 The Big Issue, Homlessness in lockdown 83 Turn2Us, Our grant-making during the pandemic (July 2020) 82 The Lancet, Covid-19 among people experiencing homelessness in 84 Nesta (September 2020) England: a modelling study (Sept 2020) 43/46 Growth through financial inclusion | A roadmap for UK banks

Case studies

HSBC, Lloyds and NatWest have taken steps to embed financial inclusion more deeply into their organisational structure.

HSBC—supporting victims of financial Lloyds—Helping Britain Prosper NatWest—Supporting Customers in abuse Lloyds Banking Group ‘Helping Britain Prosper’ Vulnerable Situations The bank has worked alongside charities plan was established in 2014 to address social, NatWest has trained over 69,000 employees such as Refuge, Women’s Aid and Age UK, economic and environmental challenges in in this area and partnered with SafeLives, as well as other financial service providers, the UK including financial inclusion. GamCare, Citizens Advice, Alzheimer to develop and implement the Financial A Financial Inclusion Steering Group Scotland, the Royal National Institute of Appendix Abuse Code of Practice. To identify victims established five themes for the planned Blind People (RNIB), BackUp and Samaritans of financial abuse and enable them to regain initiatives: on variety of programmes including: control over their finances, the bank has • Accessible Products and Services • Support for British Sign Language users introduced an untraceable sort code. • Supporting customers in financial difficulty in the UK HSBC UK branch staff receive training on • Partnerships and signposting • 14,500 Natwest staff became Dementia how to spot the signs of financial abuse and Friends during 2019 provide appropriate support. • Culture and capability • Financial education • Accessible bank cards designed with the Additional measures introduced by the Alzheimer’s Society bank include: In addition, an advisory Group of external stakeholders meet bi-annually to help the • Debt advice with charity partners, such as • Separating joint accounts and removing bank keep up to date with real effects of Money Advice Trust, Samaritans, SafeLives additional cardholders to prevent financial exclusion in communities and focus and GamCare Help for people debt further abuse on priorities. By 2019, the bank had achieved • Commitment to improve financial health • Appointing a trusted representative to 91% of the target set including: of 2.5 million people each year deal with the finances of an individual • Providing digital skills training to 730,000 on their behalf if they are not in the right individuals, SMEs and charities • Support for young people through its frame of mind to be dealing with them flagship financial education program— • Supporting 2,900 charities through the MoneySense—which is used in one in • If the customer is unable to provide Group’s independent charitable foundations three schools across the UK identification and verification of address • Enabling business growth by investing over due to their circumstances, the bank now £2.6bn, helping 230,000 new businesses accepts a letter from a recognized charity start up and funding energy efficient or victim support organization real estate

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Case studies

Barclays - Providing access to financial Santander – Supporting older people and Nationwide – building homes and community and digital empowerment preventing scams NatWest has trained over 69,000 employees Barclays has made a commitment to Santander aims to be the most dementia- Nationwide is focused on its roots as a Building enhance financial and digital empowerment friendly bank in the UK. In collaboration with Society, in helping people to access quality homes. for millions of individuals and small Alzheimer’s Society, the bank launched The Society is developing Oakfield, a not-for-profit businesses. The bank is on a mission to help a steering group, made up of people living 239 home community in Swindon. In collaboration people “embrace the new digital revolution”, with or affected by dementia. Part of the with the Borough Council, Nationwide identified a including providing digital skills education steering group’s role is to review products, brownfield, previously derelict site. The vision for Appendix and support for customers and non- services and digital access. In 2020, over Oakfield is a community of quality homes, where customers. Content has been created to half of Santander employees became multi-generational families can thrive. Nationwide suit diverse needs, from in person support “Dementia Friends”. The bank has delivered worked with its members to develop the vision for to gamified online learning. The bank has training to enable employees to better Oakfield, which will include shared garden, cycle brought digital skills programmes to care support customers affected by dementia, paths, play area and a community hub. The homes homes, schools and online into homes. and together with Alzheimer’s Society they will be energy-efficient, with both affordability and Barclays has made a commitment to ‘making launched a practical guide outlining support the environment in mind. available for people. banking easier’ through inclusive design Nationwide has made £22million available for Santander and Age UK have been working and accessible services through the use housing related charities and organisations over together since 2016. They joined forces to of new technology. The bank has taken the next five years. The Society is working with improve the financial independence of older steps to ensure the services it provides are Shelter and St Mungo’s to support rough sleepers. people. Support has included digital skills accessible through a range of tools to make It is a leading sponsor of HomelessWise, a St programmes and in-person training to help banking easier for customers who are: Mungo’s initiative that enables Nationwide branch prevent scams and fraud. • Blind, have sight impairment or have staff to provide practical help to rough sleepers, The bank has also delivered training difficulty reading including guidance on local services. programmes to young people, via an • Deaf, hard of hearing or have a speech in-school mentoring programme ‘Wise The Nationwide Foundation is an independent impairment workshops’. In these sessions, Santander charity funded by Nationwide. Since 1997 the • Neurodiverse and learn and understand volunteers teach students about topics such Foundation has made grants of over £38 million information differently as responsible money management, career to over 3,000 charitable causes. In 2018, The In 2012, Barclays was the first major UK planning, and staying safe online. Santander Nationwide Foundation announced it was bank to provide customers with audio cash partnered with Kurupt FM and created an awarding over £800,000 in funding to support machines, which benefit many customers award-winning video series designed to private rented tenants to have a stronger voice on including those who are deaf, hard of educate young people about online scams. housing matters. hearing and dyslexic. 45/46 This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms or their related entities (collectively, the “Deloitte organization”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser.

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