Funding which could help transform how people manage their money has been awarded across 15 financial technology firms.
The “open up 2020 challenge” – which has a total £1.5 million prize pot – encourages firms with ideas to help people better manage their financial lives, from saving and budgeting to help with debts.
People who could end up being helped by the wide range of concepts include gig economy workers with unpredictable incomes, millennials trying to get on the property ladder, or elderly and vulnerable people who need extra support with managing their money and greater protection against fraud.
All of the solutions use “open banking” technology – which means that people can give permission for their financial information to be securely shared with certain firms which can then help them to manage their money better.
Whether it is gig economy workers, 18 to 35-year-olds, or more vulnerable groups, millions of people across the UK are struggling to keep on top of their financesChris Gorst, Nesta Challenges
Open banking can be used in many different ways, but it could mean that, for example, details of someone’s spending habits could be shared with a budgeting app which could then look at ways to help them save money.
The prize is run by Nesta Challenges, in partnership with Open Banking Limited (OBL).
Fifteen concepts, some of which are already live in the market, were selected from more than 100 entries.
Each of the 15 has been awarded £50,000, with three also being awarded an extra £50,000 based on their ideas having an emphasis on financial inclusion, such as helping the elderly or vulnerable.
Those who have been awarded a share of the prize pot are:
– Moneybox, whose app helps customers to save. It rounds up spare change from spending or people can make regular deposits.
– Canopy, which offers a portable digital rental identity to help renters improve their credit score.
– Cleo, which helps younger adults budget, save and track spending.
– Currensea – a travel debit card that connects to customers’ bank accounts, saving on bank charges when spending takes place abroad.
– Moneyhub – a financial management platform offering insights to consumers to improve their finances.
– Portify, which helps workers with unconventional earnings patterns manage their money. It analyses earnings and spending to help prevent overdraft and interest charges.
– Toucan, which helps people who need extra help managing their money because of impairments such as dementia or mental illness. The app allows them to securely share spending alerts or financial information with someone they trust.
– Mojo Mortgages, which combines credit and open banking data to determine if a customer is “mortgage ready”.
– Wagestream, which allows employees to save directly from their salary.
– Plum, which boosts bank balances through automated savings, easy bill switching and investments.
– Kalgera, which detects and predicts financial vulnerability to help prevent fraud.
– Sustainably, which makes it easier to donate to charity by automatically rounding up spare change from spending.
– Creditspring, which offers affordable credit, helping those with limited savings or persistent debt to cope with unexpected expenses.
– Tully – a digital debt adviser for those struggling financially.
– Updraft, which is designed to help millennial users clear their overdraft, pay off their credit cards, save more, and reach their life goals faster.
Kalgera, Toucan and Wagestream received an extra £50,000 sum each because of their focus on financial inclusion.
The firms will now work with Nesta Challenges and OBL to develop their solutions – and then some will go on to be named the overall winners in July 2020, receiving a further £150,000 to £200,000 each to invest in their idea.
Research to mark the challenge found nearly a third (29%) of people regularly run out of money each month, and nearly half (48%) would like new tools and apps to help them manage their finances.
Nearly eight in 10 (77%) people believe that those struggling financially or on lower incomes need to be better supported to make more of their money, the research found.
Chris Gorst, director of challenges at Nesta Challenges, said: “Whether it is gig economy workers, 18 to 35-year-olds, or more vulnerable groups, millions of people across the UK are struggling to keep on top of their finances.”
Imran Gulamhuseinwala, trustee of the Open Banking Implementation Entity, said: “Open banking has huge potential to improve our relationship with money, and open up 2020 is a vital component in ensuring that the UK continues to be developing innovative open banking-enabled products.”