No one should be left behind in the financial services digital revolution

Technology and innovation is one of the most exciting parts of my brief as City Minister - the digital revolution continues at breakneck speed, throwing up all sorts of interesting questions for the future of financial services.

How do we protect consumers and investors without stifling growth and enterprise? How can technology help us balance the needs of an aging population against the aspirations of young people? And how do we ensure that the most vulnerable members of our society aren’t locked out of the opportunities or left behind by the pace of change?

Today I spoke at an Equifax Spark event where I outlined what the Government is doing to ensure the UK remains at the forefront of innovation in these areas; and, crucially, what we’re doing to help direct this technology towards the challenge of financial inclusion, which is one of my personal priorities.

Digital innovation can’t just be about providing wealthy people with sophisticated products and services. The real opportunity before us is to bring about a stronger and more resilient financial sector – one that caters for everyone in our society.

Government and industry has an obligation to ensure everyone can access safe and affordable forms of credit that are appropriate to their needs. We want to encourage lenders to think about how technology can help vulnerable individuals access the normal financial choices that most of us take for granted.

Take housing as an example. Many people who rent accommodation go on to face problems getting a mortgage because they have a low credit score. In 2017 we launched the Rent Recognition Challenge to find a simple way to record and share rental payment data with lenders and credit reference agencies.

One of the three winners – Bud – is using its share of this money to build an artificial-intelligence driven rental recognition tool which automatically detects when an individual is paying rent and prompts them to get the payments verified. It also takes advantage of Open Banking by allowing lenders to integrate this service into their apps, so people can use the data when they apply for a mortgage.

This for me is indicative of the real power of FinTech – products that deliver a social as well as a financial benefit.

Following on the success of the Rent Recognition Challenge, we are launching the Affordable Credit Challenge.

We want to create a whole new market of products to serve credit unions and other social lenders – ones that are tailored to the needs of this diverse sector and the communities they serve. Applications open this summer, and I’m looking forward to seeing what ideas emerge.

These are just two examples, and I’m under no illusion that Financial inclusion isn’t a complex issue. But as the digital revolution continues, I have faith that it will offer more and more solutions.

The only limit is whether we have the attitude, aptitude and ambition to make them most of the opportunity. And I’m optimistic that we have.

You can read my full speech here: https://www.gov.uk/government/speeches/economic-secretary-speech-to-equifax-spark-2019-conference