Author: Chris Kneen
Hark, what’s that sound???
No, it’s not angels singing, it’s the world breathing a collective sigh of relief that 2020 finally has one foot out of the door!
It’s been an unpredictable year. The Covid pandemic fundamentally changed the way we go about our daily lives, from where we work, how we shop, and how we interact with people, to how we manage our money. Many if not all industries have taken a hit, and financial services are no exception.
In what felt like an overnight shift, cash became dirty, bank branches were made off limits, and financial hardship became a reality for many previously stable businesses and families. As an industry that exists to serve customers with the products that best meet their needs, the ‘customer-centric’ mantra of many hit its first major test…
The result? Some failed, some passed, an elite few shone.
It’s those shining examples that I want to focus on today to bring 2020 to a close. Let’s give kudos to the financial services organizations whose efforts helped support families and businesses throughout the year. The resiliency, creativity, and adaptability of the teams at these incredible companies helped keep the world turning with human-centric digital-first banking experiences:
- Starling Bank – Starling lent £1.4bn to over 40,000 UK businesses through the government-backed BBLS and CBILS funds. They moved quickly; getting accredited on 7th May and lending on 11th May. Their Coronavirus Support Hub has also been widely praised by business owners. At the start of the pandemic, Starling recognized the logistical challenges that self-isolating customers could face earlier than others and quickly launched their Connected Card – a second debit card that personal account customers could give to a trusted friend or family member to buy groceries and essential goods on their behalf. At a similar time, they also launched their virtual Never Home Alone program, to help staff and their families adjust to being at home, providing a support hub of physical and mental health tips and shared experiences.
- Chime – US-based mobile bank, Chime, piloted a way for its users to receive their federal $1,200 stimulus checks instantly. They recently closed fundraising that valued the company at $14.5bn, making it the most valuable American fintech start-up serving retail customers. Chime has more than tripled it's revenue and transaction volumes in the last year from customers pivoting to mobile banking services. A key differentiator lies with their checking accounts that give access to paychecks two days early and allow free use of an overdraft facility. This flexibility has resonated with customers throughout the pandemic, who are increasingly choosing to shift their primary banking accounts to Chime.
- Ualá – Argentinian digital start-up bank Ualá launched three years ago. Their mission: to disrupt the LATAM banking space and address the challenge of financial inclusion in a region where only 54% of the adult population have a bank account and cash is still king. That balance is now shifting, and with demand for digital money services booming in recent months, Ualá’s financially inclusive customer onboarding has helped grow its user base of distributed cards to 2 million. Following growth in Argentina and a total $200m raise, Ualá recently announced an expansion to Mexico, staking their intention to be the next Latin American unicorn and lead a revolution that will change the way people see and understand their personal finances.
- Admiral insurance – Back in April, at the outset of the UK national lockdown, car and van journeys ground to a halt and Admiral Insurance took the decision to rebate £25 to each customer through its Stay at Home refund policy in recognition of reduced claims—the only UK insurer to do so. This cost the firm £110m, but resulted in an increased retention rate of 81%, up from 68% last year – saving acquisition costs for over half a million customers. Large savings were experienced across the insurance sector and the firm hit the headlines in the summer when, as a thank you for their hard work throughout the pandemic, departing Chief Executive David Stevens gifted a £10m bonus windfall to Admiral’s 10,000 staff.
- BBVA – BBVA moved quickly to offer special assistance to consumer and small business customers impacted by the ongoing Covid-19 pandemic, including ATM fee refunds, payment deferrals, extensions and waivers on existing loans and lines of credit, and many other offers. They also set up a $35m Covid-19 relief fund to boost the global response to the virus’s initial hit. The fund helped medical centers and hospitals around the globe through the purchase of medical equipment and supplies. In compliance with local health authorities, the fund has helped distribute 2,400 ventilators, 25,000 items of PPE, and nearly a million face masks to 265 hospitals across the BBVA footprint, with a portion of the fund allocated to helping older people and vulnerable families.
- DBS Singapore – In response to the spread of Covid-19, DBS Singapore introduced a range of support measures and financial assistance to affected customers, including complimentary insurance coverage and home-loan-payment relief for employees in affected industries. SMEs were supported with a six-month property-loan deferment, temporary loan bridging, an extension of import facilities, digital account opening, and next-day, collateral-free business loans. The bank also launched health and education-related tools, such as online doctor consultation, online video-based lessons for kids, and taxi street-hail contact tracing. These services were tremendously popular and their free Covid-19 hospital cash insurance policy, for example, recorded more than 52,000 sign-ups a day at its peak.
- Kuda – Nigeria’s digital-only bank, Kuda, is pioneering a new breed of financial institutions in the country! Nigeria has seen the use of digital banking services increase throughout 2020 with Kuda tripling the number of daily customers onboarded. This has led to a recent $10m seed fundraise, tipped as the largest of its kind in Africa. Kuda also launched a Covid-19 fund to help buy and distribute food and other essentials to people badly affected by the economic impacts of the pandemic in Lagos. Launched in April, the fund received an initial contribution of 500,000 naira from Kuda before being opened to the general public.
- Covid Credit – 11:FS, Credit Kudos, Fronted
It started with a single tweet on a Saturday morning back in March from Simon Taylor at 11:FS. The UK government had announced furlough support measures for full-time workers, but there appeared to be little plans in place for the 5m self-employed workforce to access these funds. A big piece of the puzzle was missing, and Simon quickly coordinated response from over 35 individuals from the fintech community, including Credit Kudos and Fronted, who together built an open banking journey, self-certification process, data capture, and ID verification – wrapped up as Covid Credit. Within 48hrs a functioning service was set up ready to present to the government and made available to the whole UK self-employed community. Truly inspiring. You can read the full story here.
The events of 2020 and the impact of the pandemic have been far-reaching, for the financial services industry it has provided the impetus needed to fast-track the transition from offline to online. The acceleration to serve and support customers in a digital way is a theme that is here to stay and set to continue. Businesses are racing to embrace digital transformation and the innovative teams behind these companies are finding incredible ways to use technology to power their human-centric, digital banking experiences.
The Provenir team and I would like to say a huge thank you to the people who’ve worked the extra hours and gone the extra mile to help keep the world turning throughout 2020.