Fintechs are failing on financial inclusion, says commission chair
Fintech firms are failing to widen their services to struggling consumers as they battle a cost of living crisis this year, the chair of the Financial Inclusion Commission has warned.
Speaking with City PM at the Fintech as a Force for Good conference, former Labour MP and chair of the commission Chris Pond said that the rising cost of living this year has presented fintech with a “real challenge and a real opportunity” but firms were not currently going far enough.
“At the financial inclusion commission, we have gone through the prominent fintech companies, and very few of them suggest that inclusion is one of their objectives – either their business objectives or their social objective,” he told City PM
“We have to move to a situation where, working with legacy financial services, many more of them see inclusion as part of their social mission, but also as part of business objectives.”
Pond, who was MP for Gravesham in Kent from 1997 to 2005, said that fintech firms should step up and broaden access while legacy financial firms were bogged down by higher costs.
“Legacy financial services have not risen to that challenge, but fintech can because it can be much lighter on its feet, shape to the needs of individuals in a way which legacy financial services can’t,” he added.
His comments came as he called for regulators to step in and more formally add financial inclusion to their agenda, claiming it should be a ‘have regard’ measure on its agenda.
Chief of the City watchdog Nikhil Rathi has recently rebuffed the move however, saying that adding financial inclusion would suggest it could resolve problems it does not have the power to.
“It might risk increasing expectations that the FCA should step in to fix problems that it does not have the power to solve, perhaps contributing to further confusion rather than addressing the root causes of exclusion,” he said.