A win for financial and digital inclusion

4 minute read

The Right Thing

In the Financial Inclusion Strategy, HM Treasury now recognises that digital inclusion is essential for our financial lives, and our economy. Unaffordable, unfair, poorly designed or delivered services make life harder for financially vulnerable, and digitally vulnerable, people. Baking digital inclusion into financial inclusion is the right thing to do. In the words of the Economic Secretary to the Treasury Lucy Rigby MP, this is ‘supporting people’s economic participation, financial wellbeing, and independence.’ 

Joined-up Government

This is a great example of joined-up working between HM Treasury and the Department for Science, Innovation and Technology (DSIT). The Economic Secretary’s decision to join the cross-government Digital Inclusion Ministerial Group is excellent news. 

Opportunity Spot: Harness the expertise of the Digital Inclusion Advisory Committee (DIAC) for the new HM Treasury Identity and Verification Group and new Inclusive Design Working Group. The Connection Project is a great initiative to support joined-up working too. 

Power of Digital Inclusion

Our partnership work with Virgin Money is showcased in the Strategy. Since 2022, Virgin Money has baked digital inclusion into stores and banking hubs, with staff distributing over 4,200 free SIM cards from the National Databank to help people get online and stay connected. At Fair4AllFinance’s event last week, Virgin Money’s Kirsty Rudd shared the story of one customer. A free SIM card was the key that unlocked the door to using an online benefits calculator. In turn, that unlocked financial support he’d not been aware of. This put around £400 per month back into his pocket. He’d popped in on the way to the local chippie - saying it was the first time he’d been able to treat himself in a long, long time. 

This story speaks to the power of shifting mindsets and changing organisational behaviours in financial services. Seeing the bigger picture, and taking responsibility to do what you can because your customers trust you, and digital inclusion supports the whole of their lives. 

Opportunity spot: Let’s ensure that digital inclusion is baked into all banking hubs - and beyond. Online tools and support for debt advice and income maximisation can be life changing, and less stigmatising - as long as people have the kit, connectivity, and skills to access them, and the knowledge and support to know which ones to trust. Championing digital inclusion sits alongside the continued ability to access in-person support.

Inclusive by Design

Getting design right is a key theme. We need financial services and systems that reflect people’s different needs, keep people safe from economic abuse, and are affordable for everyone. The ‘online poverty premium’ is an additional challenge when it comes to access to affordable credit and insurance. Making financial products and services easy to use, safe, fair, accessible and affordable is what we should all be able to expect. 

Opportunity spot: We want to see UK Finance’s new Inclusive Design Working Group look at the entire customer pathway - design, delivery, and engagement. As the DIAC has a sub-committee on ‘Inclusive Digital Services’, let’s get these two working groups together to agree standards that work for digitally and/or financially vulnerable customers too.

Strategic use of new funds

This is a strategy with some money attached. This comes from industry levies; UK, Scottish and Welsh Governments; and £134 million for financial inclusion from dormant assets. For the first time, dormant assets can be used to help build the financial capability of people in financially vulnerable circumstances. The latest Consumer Digital Index from Lloyds Banking Group couldn’t be clearer: digital capability and financial capability are inextricably linked. Among people confident managing their money, 81% trust online transactions. This drops significantly among people not confident - only 44% trust online transactions. 

Opportunity spot: Both Fair4AllFinance and Money and Pension Service have the chance to embed digital inclusion into their approaches to commissioning and grant-funding. Some opportunities may easily be missed or overlooked. Here are two: 

1. Fair4AllFinance: the £30 million Credit Union Transformation Fund is a once-in-a-decade opportunity to bake digital inclusion into digital transformation. This would bring staff and existing members on a shared digital journey, and deliver better outcomes for communities served by credit unions, while securing future depositors. Fair4AllFinance and credit unions could explore together how the Fund might do this.
2. Money and Pensions Service: through scaling its Money Guiders programme, MaPs seeks to integrate money guidance within wider support services, like healthcare and job centres, and through family hubs. Wouldn’t it be powerful if this could be integrated with digital inclusion support as well - like joining up with the National Databank, and supporting money guiders to be digital champions.

Getting the metrics right

I was relieved to see the strategy state that ‘millions more struggle due to a lack of access, skills, or confidence.’ The outdated and problematic ONS indicator on whether someone has used the internet in the last three months tells us one thing only: we live in a digital society. It doesn't tell us anything about the nature, scale or significance of digital exclusion. I’m also encouraged that ‘UK adults able to confidently use online services to manage their money’ is a potential indicator. 

Opportunity spot: Brilliantly, Money and Pensions Service is using the three ‘Indicators of Digital Inclusion’ we’ve co-created with University of Liverpool and others in their annual survey of 12,000 people. This will give MaPs a much richer, more holistic picture of how digital access, skills, confidence, and availability of support interacts with financial lives. The three questions are ready for use by any organisation - and that includes the Government, the Financial Conduct Authority, and those designing and delivering financial services.  

Final thoughts

It has been a privilege to have played a part in shaping this strategy - with Helen Milner as one of the Financial Inclusion Committee members, alongside other stars like Jas Singh, Kate Pender, Martin Coppack, Michelle Highman, and Helen Undy. We need to keep on joining up, and ensure that the next steps and new funds also have digital inclusion baked in, not bolted. If we do that, then we can help to empower millions of people.