Unlocking financial inclusion with the power of the vouch
The majority of adults in the UK experience some form of financial exclusion. This is a problem we’re working to solve.
Financial exclusion is a massive problem in the UK.
According to the Financial Conduct Authority (FCA), there are 1.1 million adults in the UK who don’t have a bank account, and around half a million households where no one has a bank account.
This disproportionately impacts the most marginalised groups in society.
The so-called “unbanked” population faces many barriers to accessing financial services, making it extremely difficult to access benefits, employment or loans.
This is not a niche problem.
The majority of adults in the UK experience some form of financial exclusion. According to FCA figures, 20.2 million people in the UK are financially underserved, meaning they have difficulty accessing credit from mainstream banks because they have low or volatile incomes, a thin credit file, or both.
A further 8.9 million people are at risk of becoming financially underserved due to the deepening cost of living crisis and are therefore considered to be “financially fragile”.
This is a problem we’re working to solve.
And it’s one we’re already chipping away at.
We started with the FCA through their Financial Inclusion TechSprint, and won the Jump Solution award for the technology with the most potential to provide the biggest jump forward.
Identity verification is a major barrier to access
One of the major barriers to accessing financial services is needing a passport or driving licence to pass a traditional identity verification check.
This is because many banks require potential customers to have a traditional ID to pass Know Your Customer (KYC) checks to comply with anti-money laundering (AML) regulations.
But 11 million people in the UK don't have a passport or driving licence and struggle to access even a basic bank account. And getting them can be an expensive, laborious process that requires documents like birth certificates that people may not be able to afford or have access to.
This is what greets you when you try to order a copy of your birth certificate online:
“I’ve been on [UC] for years. Probably had to show my birth certificate, but I couldn’t tell you where that is now. We’ve been trying to get a provisional licence, but there’s so many hoops to jump through. No idea how people afford it.”
– Research participant
The cost to society is immense
The knock-on effect of limited access to traditional ID is immense for individuals, and for society as a whole.
Being unable to access basic financial services only makes things worse for people already facing difficulties such as unemployment, poverty or health issues. And that leads to increased pressure on emergency services which are already under strain.
The FCA is tackling this by placing an obligation on financial services to accommodate customers who lack traditional ID. To do this, some banks use alternative means to meet KYCchecks for what they call hardest case users.
The problem is, these processes are convoluted, irregular and complex to navigate. For example, one way through is that customers have to present benefits letters and two proofs of address in person, at the bank
With closures of local bank branches increasing, this is only getting harder.
The solution: our trusted relationships
The solution is to use something that almost everyone in society has, and is integral to who we are: our trusted relationships.
Vouchsafe is the only identity verification platform that lets users prove who they are by having someone they trust vouch for them, as well as letting anyone verify their own identity with supporting ID.
You don’t need to rely on having old fashioned, expensive paper documents. Check out our demo to see how it works.
Vouchsafe has the potential to empower the 20% of adults who currently struggle to pass a traditional ID check to access basic financial services.
This creates financial stability for individuals who need it the most while simultaneously making services more accessible and profitable.
Work with us to make this happen
We want to work with the financial sector and regulatory bodies to understand how to integrate standardised vouching into KYC processes to provide secure, effective and accessible solutions to financial exclusion in the UK.
We’re already building Vouchsafe to be a robust platform for the needs of the financial services industry. It’s designed from the ground up with the security, data protection and fraud prevention deeply embedded.
If you work in the financial sector or regulatory bodies and would like to be a part of this journey, we’d love to talk: hello@vouchsafe.id
We’re hosting a summer party on July 3 for friends, family and curious outsiders to celebrate all the work we’ve done so far. RSVP if you’d like to join us.
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