Partnering with banks and financial services providers to increase provision of services

Major retail banks play an important role in a functioning market, but right now they don’t serve all customers in vulnerable circumstances. While many have invested in financial education, provision of basic bank accounts and support for existing customers falling into financial difficulty, much more is needed to meet the significant market and customer needs.

We’re working with banks and mainstream providers to deliver affordable funding to help community finance lenders access the capital needed to grow their loan books.

And we’re building evidence and understanding of the role financial institutions can play in serving customers in vulnerable circumstances well and the difference this makes. This includes establishing best practice in measuring financial inclusion activity and research into banking practices during Covid-19 and how ethnicity influences access to financial products and services in the UK.

Funding community finance providers

We’re bringing together mainstream finance and the community finance sector and social providers to identify short and long term opportunities to increase investment in the sector in line with demand whilst identifying regulatory and other market constraints.

This includes holding a roundtable with leaders from across the industry with the aim of building a joint programme of activity to make affordable credit provision sustainable.

Establishing best practice

We are also developing our thinking on how we encourage Financial Inclusion as part of the wider Environmental, Social and Corporate Governance (ESG) dialogue, paying particular attention to the ‘Social’ element.

We know most banks have signed up to the UN Sustainable Development Goals (SDGs) and the UN Principles of Responsible Banking – which is also the framework we have aligned our work to – and we’ve heard from the responsible banking community that this would be a useful tool. 

We’ve been working to bring together input from across the sector so we can collectively design and agree the specific metrics for the financial inclusion aspects of social and to start benchmarking. We’ll have more to share on this soon. 

Covid-19 Banking Best Practice research

To support our banking engagement strategy we are researching the way that the retail banking sector responded to the challenges that customers have faced during the pandemic, particularly in 2020.

Much of the work banks did during this period was unprecedented and was a great help to customers during this difficult period. We therefore think it is appropriate to understand this more to highlight successes and to inform potential approaches to handling the current squeeze on the cost of living. 

We’re planning to publish our findings in the autumn.

Increasing the financial inclusion of people from black, Asian and minority ethnic communities

In partnership with Esmée Fairbairn FoundationNatWest Group and StepChange, this research aims to fill current gaps in understanding and will explore practical short, medium and long term solutions to current inequalities. The goal is to show how financial services providers can be more inclusive of people from black, Asian and minority ethnic communities. 

We’ve completed the first part of this research and are convening a Practitioner Group from across the financial sector, including banks, regulators and money advice services that serve minority ethnic communities. The group will engage early in the research findings and work collaboratively to turn recommendations into actionable solutions.

The second part of the research is underway and we’ll publish findings and more details on next steps towards the end of the year.

Working with the insurance sector

Did you know 1 in 4 households have no home insurance? Let’s change that. We have been working closely with Aviva on a proposal to set up a ‘Financial Inclusion in Insurance’ Action Group with the aim of increasing the financial resilience and wellbeing of people in vulnerable circumstances through improving the availability of fair and accessible insurance products and services. Specifically home, motor and income protection products.

The group will be convened by Fair4All Finance and will include key representatives from major insurers, brokers and price comparison sites. We’ve had a positive response to the proposal so far and we’re planning for the first meeting to take place in October.

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