What if we put the power of financial innovation to work on our most urgent social challenges?

Last year, the Lab held a series of ideation events around the UK. Supported by Barrow Cadbury Trust, the events aimed to generate ideas for financial innovations that harness the power of data to tackle our most pressing social and environmental challenges.

In October 2018, the Lab team held three ideation events with experts in finance, tech, civil society and policy in London, Edinburgh and Bristol. Using a participatory design thinking methodology, attendees generated 14 new ideas for how financial innovation could help to tackle the poverty premium, contribute towards inclusive growth, and support the transition to a carbon neutral economy.

POVERTY AND THE DATA REVOLUTION

Our ideation series started in the Lab’s home, London, in partnership with Fair by Design. Fair by Design is a campaign working to end the ‘poverty premium’ – the extra costs associated with being poor, which averages a staggering £490 per year for low-income households in the UK. The campaign is working with financial institutions to ‘poverty premium proof’ their products, and supporting start-ups tackling the poverty premium through an accelerator programme and fund.

We brought together a diverse group of participants including representatives from Moneyline, the Open Banking Implementation Entity, The Open Data Institute, Equality Trust, Scope and Citizens Advice. They worked in teams to generate new ideas to answer our design challenge: how might we make the cost of living in the UK fair for people with lower-income through innovating financial services?

Their ideas included an AI-driven aggregator app that acts as a ‘one-stop-shop’ for financial products and services, searching available options and using data to determine the best deals for each user; a new ethical lender which centres its services around the experience of the loanee, allowing them to tell their story and set their own repayment reschedule; and a bulk purchasing initiative which buys and distributes food and goods for communities, using data to track demand of different products and prevent waste. One group pitched a community platform utilising collective bargaining power to demand the best price from service providers, and another presented a credit-rating service using alternative data. Read more in our Poverty and the Data Revolution briefing.

INCLUSIVE FINANCIAL INNOVATION

After London we headed to Edinburgh, where we partnered with UCL’s Institute for Innovation and Public Purpose for our second ideation event. In line with the Scottish Government priority of inclusive growth, this workshop was dedicated to Inclusive Financial Innovation, exploring how innovative financial services could support an inclusive economy.  We were warmly welcomed by our hosts Foundation Scotland, and a fantastic group of participants from organisations including Fintech Scotland, CEMVO Scotland, Resilient Scotland, RSA Scotland, Mydex CIC, and The Good Economy. They worked together on the design challenge: how might we create fairly shared prosperity for Scottish citizens through innovating financial services?

Their ideas included an online marketplace for entrepreneurs to find, interact with and rate business mentors; a bank to specifically serve and support SMEs (with some similarities to the forthcoming Scottish National Investment Bank); an app-based savings community based on the historical saving clubs in Scotland known as ‘menage’; and a platform that enables people to borrow money in exchange for non-financial offerings such as labour-time. These ideas are not all ‘hi-tech’ or without precedent – instead, they identify the potential of new forms of collaboration, new business models, adapting business models to unmet needs, or using technology to update concepts for a digital world. Read more in our Inclusive Financial Innovation briefing.

SUSTAINABLE FINANCIAL INNOVATION

The final leg of our ideation tour took us to Bristol. Known as a pioneer of sustainability and alternative lifestyles, it was the perfect location for our third workshop on Sustainable Financial Innovation. We hosted the event at green finance leader Triodos Bank, in partnership with the Climate Safe Lending Initiative. We were joined by changemakers from the Bristol Pound, Bristol City Council, Avon Mutual, Friends of the Earth, ShareAction, the Financial Conduct Authority and many more.

To better understand the specific sustainability challenges in the region, our participants heard from Merlin Hyman from Regen and consultant Sarah Toy. They then worked on the design challenge: how might we support Bristol’s citizens to flourish through living sustainably by innovating financial services?

Three of the design teams focused on the difficulty green start-ups and social enterprises have in accessing the funding and business support they need, and came up with a range of solutions to address this issue. They pitched an AI-powered business plan development tool; an online aggregation app for founders of retrofit businesses to identify funding and other resources; and a decision-tree based website allowing ethical SMEs to identify and rate funding sources. The other two teams worked on the financial barriers to green transport. They developed pitches for a 0% loan provider for building EV charging points, funded by parking charges, and a pre-paid card offering discounts on sustainable transport options and associated services. Read more in our Sustainable Financial Innovation briefing.

NEXT STEPS

Following the ideation events, we’re working to share the ideas and insights generated amongst the Lab’s community and beyond. They have already influenced the recruitment criteria for our Lab Fellowship this year. We also plan to hold a data sprint to build on one of two underlying themes that emerged from across the three events, each challenging fundamental assumptions about how data is used in finance and offering exciting opportunities for innovation that serves people and planet: data pooling and forward-looking data. To find out more and express your interest in taking part or supporting this work, please email our Head of Programmes, Marloes Nicholls, via marloes@financeinnovationlab.org.