Each week The Fintech Times takes a lot at some of the top stories in UK fintech. In this weeks round-up, UK Leads Europe with £46M Card Fraud Loss Cut in 2020, London is the third-best global tech hotspot and Half of UK parents struggle to talk to their children about money
Consumer spending falls by 16% since the latest lifting of restrictions
User data from Yolt, the smart money app, reveals consumers have spent on average 16% less since lockdown restrictions lifted on the 12th of April, as economic uncertainty continues, and people remain cautious about their spending as they come out of lockdown. However, people spent 9% more on eating out in the last two weeks of May, following the easing of restrictions on the 17th, when compared to the same period in March.
Pauline van Brakel, Chief Product Officer at Yolt said: “The past year of lockdown restrictions has undoubtedly had an impact on our food shopping, dining, and savings habits, and with each change we are likely to see more shifts. Our data suggests that consumers are looking to spend smarter and reduce their outgoings in light of broader economic uncertainty. Even as lockdown eases, we anticipate people will want to continue to spend cautiously whilst making the most of their new freedoms.”
Half of UK parents struggle to talk to their children about money
A new report by Blacktower Financial Management Group found that 51% of UK parents struggle to talk to their children about money matters, with 6-in-10 parents (63%) not regularly discussing finances as a family. 59% of parents believe their children should grow up blissfully unaware of how and why it is important to start saving. This is a pleasant theory, but a lack of understanding around basic finances can leave children falling behind as they grow up and struggle to manage savings and outgoings.
John Westwood, Group Managing Director at Blacktower Financial Management comments on the study “It’s eye-opening to see the large percentage of UK parents struggling to talk to their children about money even though parents know they are the biggest influencer over the development of their child’s money management skills. We hope that our useful tips will help you to start educating your child about money and have a positive impact on your child’s financial future.”
Over a third of SMEs in the UK say the pandemic has super-charged their business
Over a third (35%) of UK small and medium-sized enterprises (SMEs) believe the pandemic has been a positive catalyst for change as digital skills soared during lockdown, according to the findings of PayPal’s inaugural report, The Business of Change: Recovery and Rebuild.
The poll of 1,000 SMEs reveals 30 per cent believe their business plans have been expedited by a year or more due to COVID-19, with one in eight (11%) stating they are now at three or more years ahead of where they expected to be, despite recent lockdowns.
“Small firms must apply the hard-learned lessons from the pandemic, building on their new digital capabilities and retaining the focus and effectiveness demanded by these tough conditions. These lessons will make them stronger, more resilient to future shocks, and more likely to be in a position to grow and thrive in 2021 and beyond,” said Michelle Ovens CBE, Founder of Small Business Britain.
Cashflows research reveals the impact of the pandemic on ethical shopping behaviours
Cashflows have published new research revealing the impact of the pandemic on UK consumer shopping habits. The research shows a marked increase in those who say they feel motivated to buy based on ethics, however cost, quality and convenience remain the primary concerns.
More than nine in ten (91%) UK consumers say they actively seek out products with ethical affiliations and 35% are more motivated to do so now than they were before the pandemic. This rises to 45% for the key retail demographic of 18-35 year olds, and 47% for consumers within Greater London. Respondents over 56 are most likely to opt for local produce (43%) and British manufactured products (42%), whereas 18-35 year olds seek cruelty-free products (32%) and products with recycled packaging / that do not use plastic (30%).
UK Leads Europe with £46m Card Fraud Loss Cut in 2020
UK financial institutions continued to lead the charge across Europe in thwarting the criminals. New data from FICO’s updated European Fraud Map shows that the UK achieved the greatest fall in card fraud monetary losses, dropping 7 per cent and £46 million year-on-year.
However, other nations among the 18 European countries studied did not fare as well. Overall, card fraud losses in these countries were reduced by €62million.
“Fraudsters are constantly scanning for access to poorly protected accounts and opportunities to manipulate transactions and this is what made 2020 such a challenge,” said Matt Cox, vice president for financial services in EMEA at FICO. “Fraud teams would have faced wave after wave of sophisticated COVID and Brexit scams, which makes the success of UK financial institutions – protecting Brits’ finances – even more impressive.”
London is the third-best global tech hotspot
Over the past year, it’s become clear how powerful electronic technology can be – from helping us stay connected across distances, to disseminating crucial news and data in real-time. With the entire world relying on tech devices, particularly recently, the tech race has never been this competitive. Electronics retailer Carphone Warehouse created the World‘s Tech Hotspots index to find out which cities around the world are on the winning stretch.
It’s probably no surprise that the leader in the World’s Tech Hotspots is San Francisco, home of Silicon Valley, however, London sits in third position. London scores well across several metrics, including the joint-highest smartphone penetration percentage of all cities assessed (82.9%, alongside Manchester), great start-up scores, and top scores for education.
UK’s fintech industry is much less London-centric
Despite the above and that London is still one of the strongest cities in the world for fintech, many cities outside of London are developing into thriving fintech hubs. Birmingham entered the rankings at 123, Cardiff came close after at 127. Although London is by far the largest fintech hub in the UK, the growth of what the report identifies as ‘tertiary hubs’ is promising.
Although growth in large English cities like Manchester and Birmingham is to be expected, as is the presence of fintechs in cities near London like Cambridge and Brighton, the report showed surprising growth in other British cities like Cardiff (ranked 127th) and Newcastle upon Tyne (ranked 155th), both of which were new entries this year.
Findexable’s founder and CEO Simon Hardie explains: “The UK continues to be a major player in fintech, but unlike the larger finance sector it is moving away from being largely London-based. We are seeing how investment in creating technology hubs in secondary cities is translating into the creation of thriving communities and viable companies.”
TfL has abandoned plans to make the London Underground go cash-free
Transport for London has announced they have abandoned its plans to make the London Underground go cash-free. A total of 200 of the 262 Tube stations stopped taking cash in May 2020 amid concerns that the sharing of notes and coins could spread Covid, and to prevent queues at ticket machines to aid social distancing.
However, City Hall has announced that the “vast majority” of Underground and DLR stations would now have one machine able to accept cash payments to buy tickets or upload credit onto Oyster cards.
Dean Wallace, Practice Lead, Real-Time & Digital Payments at ACI Worldwide said: “Cash is no longer king, despite Transport for London (TfL) doing a u-turn on its plans to go cashless.
“It’s clear that we’re moving further and further into a cashless society. That said, the move by TfL highlights the scepticism associated with this shift brought on by fears of the unknown. But this move to cashless should be embraced, not feared! Digital payments actually lead to fairer access to cash and payments, stimulating the economy itself.
“While TfL’s move seems to go against the turning tide of a cashless economy, commuters will continue using digital payment methods on the tube, just as we will see the continued adoption of faster digital payment methods in all other walks of life.”