The Role for Financial Services in Boosting Financial Literacy and Inclusion

foreign ladies and gentlemen my name is Martin Elliott and I have the privilege of being the current Provost at Gresham College which has been providing free education to the people of London since 1597. and worldwide since the Advent of the internet as Han Diaz said in his 2022 novel trust which was about the world of High Finance in New York no investment pays higher dividends than education now further to support that contention I'm pleased to welcome you tonight to the Gresham College annual Lord mayor's event the Lord mayor of the city of London is the president of Gresham college and the city of London corporation which together with the Mercer's Livery company support the college us Trustees of Sir Thomas Gresham as well the Lord mayor the right honorable Alderman Nicholas Lyons has had a glittering career in finance and in his mayoral year we'll Champion financing our future promoting a resilient resourceful and responsible City deploying capital and expertise to supercharge economic growth Nationwide and to grow our Global competitiveness tonight Alderman Lions will consider the role for financial services in boosting financial literacy and inclusion of vital for ignorant lack of money people like me but following his lecture he will chair a discussion with a brilliant group of influential panelists Sasha romanovic CEO of fair for all finance and co-chair of the inclusive economic partnership former CEO of Grant Thornton Patrick Jenkins Deputy editor of the financial times and Andrew holdain CEO of the Royal Society of the Arts chair of the government's leveling up advisory Council and former Chief Economist of the bank of England ladies and gentlemen we're in for a cheat and may I ask you please to welcome the Lord mayor of the city of London the right honorable Alderman Nicholas Lyons foreign well good evening everyone and it's a great pleasure to welcome you here to the Guild Hall this evening for those of you who don't know me I'm Nicholas Lyons the 694th Lord mayor of London and the Civic head of the city of London Corporation uh so welcome for this Gresham College lecture on the road for financial services in boosting financial literacy and inclusion in the UK today around half of working age adults have the numeracy level expected of a primary school child as a nation we're unfazed even amused when people pronounce themselves hopeless at maths but it is no laughing matter because at the same time a quarter of adults have less than 100 pounds in savings at half of people don't feel confident managing their money day to day poor financial ability is just one of the issues facing the 12.9 million adults with low Financial resilience a term that covers the unsteady starters renting rooms and working zero hours contracts right up to those in their ungolden years who have stable but low pension incomes the nation's productivity is affected because people's disposable income isn't Rising nor are they able to save adequately for a comfortable retirement across the UK people in vulnerable Financial circumstances are finding themselves shut out from mainstream Financial Services like credit and insurance that could help them weather the storm for example when the washing when the washing machine breaks down they can't just buy a new one forced to turn instead to a rent to own company and pay twice the retail price typical of what we call the poverty premium to paraphrase the theory of socioeconomic unfairness set out in Terry pratchett's 1993 novel men at Arms the rich stay Rich because they can afford to buy one good pair of boots the poor stay poor because they must buy several bad pairs and they still end up with wet feet numeracy for natural literacy and financial inclusion are the building blocks of a fairer society that help help people make sense of their money plan for the future manage unexpected shocks and get on in life in 2023 too many people are being held back because they lack these basic skills and access and efforts to tackle the nation's widening wealth Gap are made much harder the UK Financial Services is arguably the best in the world I believe we have a duty to use our experience our expertise and our resources to support the most vulnerable in society and ensure that everyone benefits from the square miles success today I will explore the role the city can play in improving new Mercy for natural education and access to finance these issues are related but distinct so I'd like to address each in turn beginning with new Mercy there's a false assumption that maths starts and stops in the classroom and anyway we have calculators on our phones don't we but the ability to understand and work with numbers is fundamental to the fabric of Our Lives we begin to gain an early sense of numeracy in babyhood developing a sense of space shape and measure as we explore the world around us when you estimate the distance of the car in front of you while driving when you put together flat pack Furniture good luck with that when you fill your shopping basket you're using numeracy skills home to the world's biggest foreign exchange and derivatives markets the global headquarters of leading Financial firms and so much more the city runs on numbers yet the UK's numeracy levels are significantly below average for the oecd and well behind leading countries such as Japan and Finland a figure that should shock and shame us a lack of basic numeracy skills is preventing people across the nation from reaching their potential in work and in life and it's also a huge barrier to learning more about their finances if someone has never learned how a percentage works how can they be expected to understand interest rates or compound annual growth rates the most important Concept in finance many people think maths ability is fixed but that's simply not true and that's why my charity the Lord mayor's appeal has partnered with national numeracy represented today by Vice chair Andy haldane which seeks to foster a culture where people of all ages feel comfortable trying to improve their numeracy skills research has shown that workers with low numeracy earn around six and a half percent less than if they had a grasp of the basics and one in four people will be deterred from applying for a job if handling numbers was a requirement through its every London accounts initiative National numeracy is helping londoners build their numeracy skills through a network of 500 newly trained numeracy champions the charity also offers a free skill building tool National numeracy challenge and National numeracy's work is so important because we know poor numeracy skills are hampering groups who are already at a disadvantage research shows that women are twice as anxious as men about maths and while 45 of men have the numeracy level expected of an 11 year old child that rises to 63 percent of women we also know numerous numeracy skills are weakest in regions where incomes are lowest and the Northeast West Midlands and Yorkshire and the Humber all have a higher proportion of working age agile adults with lower numeracy skills than the rest of the UK the government has set out a vision for a more productive prosperous country where everyone can succeed at which the city Corporation of course wholeheartedly supports but it's clear that unless we pull together to improve basic numeracy levels leveling up will remain just that a vision now let's look at financial literacy good numeracy skills and financial literacy go hand in hand and people need both to be able to make sense of an increasingly complex and pressurized Financial landscape let me be clear by financial literacy I don't mean Financial expertise what I'm talking about is a basic understanding of financial Concepts like budgeting which set an individual up to manage their money and avoid Financial abuse research from the center for social justice found that nearly half of adults who've experienced financial hardship think low money management skills played an important role and their situation would improve with more financial education so what's being done in response to that clear call to action while research shows the children's money habits are formed as early as age seven Financial education is absent from the primary curriculum it was introduced to the secondary curriculum in 2014. but low confidence among teachers in delivering the topic lack of resources packed phsc lessons and the absence of formal assessment means that many teens are still leaving school without a Quality Financial education a recent study found that kids aren't all right about that an encouraging 72 percent of pupils want to learn more about money rising to 85 percent of 17 to 18 year olds the financial times is financial literacy and inclusion campaign represented today by Patrick Jenkins wants to make learning how to manage your money as common as learning how to ride a bike supported by funding from the city Corporation flick has developed a financial education program that will be piloted in the city of London Academy shoreditch in a few weeks the hope is that by focusing on training teachers flick will embed Financial education in the curriculum and create a model that can be replicated across the country initiatives like this are so important because The Tick-Tock generation is entering a more sophisticated and a more dangerous world 55 000 children aged 11 to 16. are estimated to be problem gamblers meanwhile the children's Society reports that more and more young people are being financially exploited online the cost of living crisis provides further impetus for improved Financial education in January 2022 pint of milk cost 46p in December it was 69 p Aire a 50 increase and just one example of how prices have rocketed more than 150 000 people turned to Citizens advice for Crisis Support for the first time last year 150 000 people and one in three people would struggle to find an extra 20 pounds a month if they needed to the cost of a school Blazer could Financial education help people feel less hopeless and would you want your child or grandchild to enter a financial climate like this without a basic grasp of Money Matters these are important questions to ask ourselves not least because of the very real impact for natural hardship can have on people's health children living in poverty are more likely to suffer from chronic diseases and three times more likely to suffer from mental health problem and the more debt people have the more likely they are to have a mental disorder the Lord mayor's appeal is proud to have partnered with mq mental health research which is investigating the impact of the cost of living crisis on the nation's mental health and will produce evidence-based recommendations on how we can support the most vulnerable I'm interested to see if that work confirms what feels intuitive that building financial literacy could help boost people's financial and mental resilience I know the government recognizes the need for improved Financial education and I'm pleased to see local authorities benefiting from its 560 million pound multiply scheme to improve adult numeracy but clearly more support is needed for secondary teachers to deliver statutory Financial education the prime minister's commitment to extending maths education to 18 is to be welcomed though I'm sure I'm not alone in wondering how this is compatible with the shortage of qualified maths teachers I hope this policy doesn't lead to more Maths for Math's sake but instead focuses on practical lessons that will prepare teams for the real world employers also have a role to play and at the world economic Forum I was pleased to take part in the launch of make time for money week which asks employers to donate four hours for employees to focus on improving their Financial Health I know there's a lot of activity concentrated in certain areas Geographic areas for example Tower Hamlet and we could learn a lot from pooling the findings of different groups operating in that one space for example local charity the switch works with business volunteers to deliver employability skills to students including the Abacus family financial literacy project in partnership with Lloyd's Community program there are lots of great initiatives being pioneered by our financial service companies but how can we shake change on a large scale and so too Financial inclusion of course we know education alone won't pull families out of debt and the cost of living crisis also exposes gaping holes within the financial services system for useful affordable products services and advice for people experiencing financial hardship the best deal available is often a bad deal demand for unregulated buy now pay later loans has soared I even saw one bnpl company promoting purchasing a burger in installments meanwhile energy regulator off gem had to intervene earlier this month to stop energy companies installing more costly prepayment meters in the homes of vulnerable people as CEO of fair for all Finance Sasha romanovic who's with us today has pointed out our financial system is designed around people with predictable lives and predictable incomes but in 2023 Britain how many fit that description cost of living crisis or no for example a direct debit is incredibly helpful for someone on a fixed wage but incredibly hazardous for someone on a zero hours contract fair for all Finance is one of the organizations trying to broaden access to financial services their no interest loan scheme has already allowed participants in Manchester to buy new white goods to keep their family running elsewhere fair for you have teamed up with Iceland to launch a food club that gives parents small amounts of credit during the expensive School holiday period the governments helped to save scheme which gives low earners a savings boost reached 359 000 signups in March meanwhile the financial services and markets bill will legislate for access to cash and allow all important Credit Unions to offer a wider range of products and services to their 1.4 million customers

this is all excellent work but as Europe's Premier Financial hub the square mile needs to develop the Financial Solutions needed for this variable and volatile world business is driven by its Financial purpose yes but also increasingly by its societal responsibility and an awareness of the role the private sector plays in stimulating economic growth as a global representative for the UK Financial and Professional Services sector I want to encourage businesses to look again at their offer and to consider firstly how they can help people cope with the immediate cost of living challenge through measures like debt repayment deferrals and secondly how they can ensure everyone in society is aware of understands and can access products and services to help them manage their money long term we're seeing some great initiatives in areas like Banking fintech and insurance a few of which I want to mention today while highlighting scope for further action looking at banking in the UK today around 1.2 million people are unbanked which means they don't have access to financial services for some that's a choice but many people are unaware of the availability of basic bank accounts designed for those with poor credit scores or otherwise find them hard to access the pandemic didn't lead to the tsunami of non-performing loans that was predicted but then again Banks aren't servicing households in the bottom 10 percent of course I am not suggesting that the credit risk posed by less financially resilient client clients can or should be ignored but there is an argument for that risk to be priced into Banks overall offer to clients so we can share the cost across the whole portfolio and bring people on the edges of society into the banking system in 2019 the FCA stepped in to stop Banks from charging higher prices for unarranged overdrafts but there is a long way to go to democratize the banking system research by the ft and ipsos Mori found that barely half of respondents were able to correctly compare the costs of borrowing via credit cards or Bank overdrafts regardless of wealth or gender alongside improved communication more must be done to fill the financial advice Gap between those who can get financial advice and those who want it but can't afford it 73 percent of advisors think that Gap has worsened over the last five years and nearly all those surveyed think technology is crucial to bridging it I'd like to see a mark to market analysis of where we stand in relation to other countries that have had to tackle these issues in a push for inclusion in 2014 The Reserve Bank of India directed Banks to allow people to open a savings account with a single photo ID as of January 2021 417 million bank accounts have been opened under that scheme greater use of digital Tech could help deliver a fairer more sustainable Marketplace but this won't come without a cost which would probably need to be born by our banking system let's consider fintech research shows that there is a positive correlation between fintech and financial inclusion and that fintech can help narrow class and Regional divides fintech can help customers shop around for deals spread costs and get cheaper access to credit money management apps such as Snoop money Hub and Emma allow users to see all their finances in one place track their spending and create budgeting goals and the wage Stream app helps consumers make emergency purchases by letting them access their wages at any point in the month on insurance the financial conduct Authority has stepped in to stop existing customers being charged more than new customers when they renew their motor and home insurance the ABI is also doing great work to broaden access including launching mental health standards to help those with a history of mental health to get insured in pensions Auto enrollment has increased the number of policyholders by 10 million in the last 10 years but businesses with fewer than five employees and the self-employed are excluded from the system platforms technology platforms for this segment of the population could help solve these problems but it requires more cooperation and bigger vision from Financial and Professional Service firms clearly it will require a group effort to turn the dial on numeracy financial literacy and inclusion as Lord mayor I see it as my responsibility to use the city's unique convening power to unite those different groups and to come up with a coordinated plan for further action on the 12th of April I will bring academics Charities businesses regulators and politicians together for the first for natural literacy and inclusion Summit AT mansion house this Summit seeks to establish what best practice looks like identify where there are gaps and weaknesses and most importantly map out the next steps the city of London receives its fair share of scrutiny but it has been and can be a tremendous Force for good organizations like the ones our panelists represent are doing fantastic work but the square mile must pull its weight there is a clear incentive for us as manufacturers of financial services to ensure our customers are better served and better informed it is the responsible way to finance our future if we come together we can create a more resilient more equal Society where people have the skills and support they need to manage their money and reach their true potential thank you [Applause] so I'm going to take a breather now and I'm going to ask my three extraordinary panelists Patrick Jenkins Sasha romanovic and Andy haldane to just share with us some of their thoughts from the first-hand experience that they have in all sorts of different ways Patrick but maybe I can start with you sure um well first of all thank you so much for inviting me to um what is an extremely important event and you've highlighted uh many of the reasons why um it echoes actually a lot of our thinking when we set up our charity uh there was a twinkle in my eye three years ago when I became Deputy editor of the Ft um it took a while but 18 months or so ago we launched uh what has become known as Fleck the financial literacy and the inclusion campaign and um as you said it it's kind of two-fold really that the reasons behind are wanting to do this aside from the fact that we felt that it was very important that the financial times did something proactively in this space in a way that lined with what the ft is all about subject-wise but also give something back in the kind of way that you're talking about is relevant for the city as a whole um and it's not just about helping people avoid pitfalls it's about empowering people to achieve their full potential so it's a it's a real key part of um we were talking earlier about the productivity puzzle uh in the city and around the country and you know this is a very simple part of that puzzle um so what has flick been up to since we were created well the our main focus has been um as you mentioned uh developing an educational program for young people where we're piloting we've been piloting for the past uh 12 months or so in in various uh School settings around the country but we're doing a full whole school um uh pilot uh starting in a couple of weeks time in uh a school this is with partial funding from the city of London Academy's trust which is um very promising it's in shoreditch park and we hope based on the learnings from that program to then roll out this six weeks teaching program to schools around the country any school that wants this program can have it uh we won't be sitting back and waiting for people to come to us we'll be very proactively rolling it out with Partners around the country but as you said uh it would be so much more uh so much more straightforward to do so much more um uh so much smoother to be able to do this if we had proactive government support for this through for example the master 18 program including explicitly for literacy as a part of that agenda because it absolutely chimes with what the Prime Minister was saying that this uh his reasoning was not only to uh um educate people ready for careers uh that depend on high levels of maths but actually also to educate the population in everyday maths so I think following through on that we would be very very keen to see financial literacy explicitly become part of the compulsory curriculum and that's another actually another arm of what we're doing as well as creating the the curriculum material and teaching teachers as well as students we are lobbying both in the UK and when we move abroad as well internationally we'll be lobbying for governments to make financial literacy a compulsory part of the way things are taught um just to mention a few other things that we've been doing and as you said kids do want to learn you know in our pilot so far we had a huge hugely positive responses to the the programs we put forward but they also uh not all kids want to engage at school but we want to reach the kids that perhaps don't want to learn through an academic means and one of our most successful initiatives has been a program of short videos that we've put out through social media channels um we put out 10 videos on one day in early September as an experiment we had one million views within a couple of weeks it was hugely powerful and we think that's going to be a key part of the way we we work going forward um uh I've talked about young people as our probably our primary focus so far are other two um uh demographics that we're focusing on are women and disenfranchised populations and these uh these three Are all uh parts of the of society that consistently show underperformance in financial literacy uh testing so that's why we've focused on them and for for those we've we've produced another uh set of uh content for example um part funded by the ABI uh we regret began a program of work uh to promote Financial Basics to people working in jobs with unpredictable incomes exactly the type of uh individuals you were talking about who find it difficult uh direct debits of their enemy um so that's a that's been a big focus and we'll be developing that and um for women we've we've helped by ft live the the Ft conferences division we've we've held uh q a sessions which have been which have gone viral as well um uh in this kind of format a live session uh has also been streamed so none of this of course would be possible without uh the kind donations of flick supporters which have been primarily ft readers um uh in addition of course as I said to the city of London the ABI at a few private sector companies as well but to Echo the Lord mayor's appeal we really really do need more support to continue this very important work so um thank you for the opportunity thank you very much Patrick and clearly the uh the reputation and reach of the financial times is immensely powerful yeah you talked about your convening power we feel we've got a similar but maybe complementary convening power that we feel is very important to bring to that yeah very good super Sasha maybe you could talk to us a little bit about natural inclusion brilliant thank you Lord and just thanks for everybody for giving up their time on a Monday evening and um for making Financial inclusion political campaign it's incredibly important so Federal Finance we were founded in 2019 and were actually funded by dormant assets which means effectively money that people forgot existed is going to make difference for people for whom every pound counts and so I think it's a really great example of actually a voluntary scheme that currently Banks it will be expanded to other City organizations participating where they find that lost money and is able to be put to use for good purposes so when we were set up it was in absolute recognition that financial literacy and numeracy are important and yet actually there was a real gap which was around people being able to access the financial products and services that can provide them with a stepping stone to financial resilience and I've been we've talked about some of these and so maybe I'll just pick pick them out in turn the first is the access to Affordable Credit when you've got 17 and a half million people in financially vulnerable circumstances 14 million people with less than 100 pounds in savings things like a washing machine breaking down or even getting a washing machine can be an insurmountable hurdle for people and post the financial crisis for actually very good reasons mainstream Banks withdrew from providing small amounts of unsecured credit to people what happened you were all very familiar with the likes of wonger the payday lenders and that boom and quite rightly The Regulators plant it down on that but what that what's happened is that's left this enormous Gap and So currently we estimate there's about a two to three billion pound gap between what is needed in those small amounts of unsecured credit and what's available through credit unions and cdfis that provide that for people when the Gap exists in the marketplace people spot on opportunity and sadly at the moment it's organized crime and illegal money lending that is looking to step into that Gap and I won't distress people maybe you can call Corner me over a drink later some of the stories I've heard are truly shocking for 2023 in the UK as the Lord mayor said we've been funding for you um we we do both investment we research what works we are able to then start to put together what structural mechanisms might be needed to ensure that that market Gap is filled well for for me it's often the stories that really stick in my mind and the two stories I will share which I think bring out the the importance of this access and um and also why sometimes the well people should just save up is not really stepping into the reality of what people's lives are like so the first one is a lady who is a customer Affair for you and she was able to get some get her first loan to be able to get a washer dryer she was a single mother and she had two children her son was severely autistic and was doubly incontinent and before that they didn't have much money she was washing his clothes and drying them with a hairdryer um and he was bullied at school because he smelt um so she told me the transformative effect that actually having a washer dryer had made on her life and the difference it made and you think that's pretty powerful don't you until she said oh but it was the second loan that really made the difference I was able to get him his own bed which meant I wasn't sharing a bed with him and now I sleep at night and she's been able to now move into getting part-time work so with fair for you they've been able to demonstrate the social value of being able to provide those small loans is delivering for every pound that is actually lent it's delivering at least 12 pounds worth of social value to the economy people's ability to participate I was also speaking to a social housing provider recently and they were talking about some of the systemic challenges and they said we're building social housing these days where it's got a nice space for a washer washer dryer and we don't provide outside space for drying anymore but then people can't afford to fill that space in their kitchen and so the clothes are around their houses and apartments and without the heating on the condensation and The Damp and everything that we know so so the knock-on impact of not having access to these small amounts of money is enormous the challenge in scaling up Affordable Credit is actually getting Finance from the city getting lending Capital getting first loss capital is really hard for the organizations that are doing this well and we have to ask ourselves as well is it right that eight million people in the UK cannot turn to a mainstream Bank to be able to provide access to those basic things for them we're also paying attention to products and services one in four people don't have insurance that Lifeline for Life events making insurance so that it's affordable so that if you miss a payment because you're on a variable income you don't suddenly find your policy has stopped when you need it most those are challenges that we're facing as well and looking at where there are gaps so the no interest loan scheme has been a really good example many councils in the cost of living crisis are looking at how can they make their hardship funds go further well actually a lot of people could afford to borrow but not pay the interest they might be deemed to be a bit too risky to lend to but with them under right they could be lent to what we found is that over 90 percent of those people on our pilot scheme who would have been deemed too risky to lend to or actually repaying just fine and that those loans are actually giving them the opportunity to borrow the deposit for a nursery place they can actually get the nursery place and get into work to buy the second kind of car that gives them the means to actually get to work to take that job so the difference that the access to financial products and services can make just can't be understated but it just needs people to work with us and we're really privileged to be working on a systemic issue with some funding to do it and we know that collaborating with government with civil society and with business then it really is possible to transform the lives of millions of people in the UK today so that's me I get on my soapbox you know that that's why you're here Sasha that's great that's very helpful Andy move to you thank you even everyone lovely to see you all uh hard to follow Sasha's fantastic and terrible stories at the same time um let me congratulate either of them with that fantastic Russian nature um which I think set out so compellingly why we as a nation need to build our capacity across numeracy across Financial inclusion and across Financial education that tramvra really have defined most of my professional life and Truth uh the bank of England um where alongside selling those interest rates that no one understands Lord mayor um at a hand in building out the banks financial education program and schools and then as you mentioned in my role as Vice chair of national numeracy working in partnership with with you and your team which we're honored to do for your lord mayor's appeal and latterly and most recently at the the RSA who have previous on education stretching back at least 150 years truth be told those three issues are problems of long-standing and we have made few if any inroads on them over the past generation or so um the fca's financial live survey 2020 had as many as 86 percent of people rating their knowledge of financial matters as low and those problems are even more acute among younger cohorts of people you know fully half of whom facing Financial precarity of various types and fully three-quarters of whom have Financial knowledge that is ill-equipped to tackle those precarious forces indeed you mentioned the mental health mental health epidemic facing those younger cohorts that is not unrelated to those financial pressures and Bones ill I think for both the financial and mental health of future Generations I welcome the little mayor appear what will mayor appeals work on just those issues on all of that is hard to make sense of isn't it because we as a nation have a real richness when it comes to financial expertise in and around this square mile and indeed Beyond we have the simultaneous richness of expertise and resources in one place and yet these yawning deficits of knowledge in others and those disparities have without question be made worse worse much worse by the cost of living Christ of the past several years which has fallen disproportionately on those people and places uh that will pour us to begin with so Recent research from National numeracy in collaboration with Experian operating the postcode level has Illustrated that those facing the most acute challenges financially or also those operating with lowest levels of numeracy or put differently those facing the most acute Financial stresses or author those people least well equipped to handle those stresses a genuine uh double whammy so how do acute those pressures a few years ago we can say with some certainty they are more acute still now what was a policy priority a year ago is now a policy imperative so what purposefully might be done I hugely welcome the summit you mentioned lordmer on financial literacy and the inclusion I hugely welcome that everyone's accounts initiative that we're doing National numeracy in partnership with the Lord mayor those 500 numeracy Champions supporting the least advantaged communities that's a means of recycling those surpluses of expertise into those communities facing significant deficits of the self-same expertise the government's multiply initiative I think can and should reach widely and deeply into communities especially if we can do it on a continuous basis but I think In fairness Lord mayor even with all of those initiatives in place we will fall short given the scale of challenge we face truth be told I think ultimately we need to rethink and reframe pretty fundamentally our education and learning model if we are to reach those Millions upon millions of both young people and adults that currently face acute anxieties about both numeracy numbers and about Finance and that calls I think for us experimenting with very different approaches to teaching and learning with a traditional chalk and talk approach accompanied by examinations you could not imagine a system more likely to generate anxiety about Finance of numbers than that one and it needs fundamental root and Branch rethink rethinking and retooling we do need a system of learning that's much more practically focused on people's everyday problems and everyday lives we need one that is not rooted in our examination with its paths or fail culture into a much more digital in its orientation including the use of techniques such as gaming as a vehicle for learning we need a system with far greater degrees of personalization learning Journeys attuned to people's individual learning styles circumstances and capabilities never before in human history have we been able to personalize a Learning Journey but now we can in the same way as we have we are personalizing medicine we absolutely can and should personalize learning harnessing that deep well of embedded expertise in UK Financial Services alongside the UK's deep well of expertise in Tech and AI to go from lagged to leader when it comes to personalizing people's Journeys for financial education and inclusion that would be a legacy the aggression himself a great inventor would be proud and what better way and what better place to make good on that than he let me stop there thank you Andy that's fantastic terrific I'm conscious that you're expecting to be wind at seven o'clock and I know this audience gets very anxious when they know that that time is approaching I think we were going to have an opportunity Provost perhaps for Q a yeah can I hand over to you thank you thank you very much indeed it was a wonderful panel um I'm going to we have a lot of people watching online as well so I'm good first of all going to take a question um from online which includes an acronym an acronym I don't know so I'm hoping one of you will explain it more inclusion means simplification of the access process for example the Indian example you gave us yet AML regulation complicates the process how do you resolve that what is AML please AML is an anti-money laundering all right very good I think probably kyc is probably what what he's driving at um uh know your client uh these are of course um requirements on banks to make sure that they have done their due diligence before taking on new clients so I I would agree that this is non-trivial um this is not simply a question though of um photo ID there's also a a technological platform which becomes the model that all financial institutions looking at that segment of a client base looks at so the point about it is this is one of those areas where after natural Services system has built itself up to be as strong as it is globally because it's competed at every turn and and we mustn't lose that competitive Instinct but there are times particularly when you're looking at this unbanked population where I personally believe we need to come together as an industry to find a solution that we all participate in that we all contribute to the cost of and the cheapest and most effective way to do that is to have one technological platform rather than a multiplicity so that we can deal with those AML and kyc challenges oh okay I would just add one thing is the HSBC are a great example of a bank that have taken a need they've managed to create a homeless bank account it is quite possible to actually verify somebody's identity even when they don't have a fixed Abode and I think that the technological platform of getting something that's simple across the board I must admit it doesn't just apply to actually access any any women in here who have chosen to keep their maiden name but also have a passport in their married name can't get identified for a lot of money so it's an unconscious that the that Sherrod Cooper Coles from HSBC has just put his hand up perhaps to contribute on that particular Point well thank you Lord mayor I wasn't ready could you take the microphone for us thank you Lord mayor I wasn't going to speak wearing my HSBC hat although I owe uh Douglas Flint a great deal of thanks because when I joined HSBC nearly 10 years ago he put me to work on financial inclusion and I was lucky enough to spend nearly six years chairing the UK Financial inclusion commission and I just wanted to endorse everything you said Lord mayor I think it's absolutely outstanding lecture I hope you send it to the Prime Minister the chancellor the leader of the opposition and Rachel Reeves and I wanted also to endorse everything that Andy said because what's happened in which breaks my heart is we're Treading Water lots of good things are being done by Sasha by Patrick by all the different charities but things aren't really fundamentally improving and what we need is a National Drive bipartisan we need the treasury to get behind this they set up a financial inclusion Forum driven by my commission but forum is the Latin for talking shop it's not really for getting stuff done we need legislation we need it in the National curriculum we need a minister for financial inclusion and we need a Financial Health Service or the equivalent thereof and it needs ministers to drive this not just leaving it to people like Sasha and Patrick and Andy a new Lord man I hope your summit in April really does Hammer this point home you've hit on an absolutely crucial I just end by the thought when I was a boy the access card came out and the slogan for access was access takes the waiting out of wanting and there was some Bishop who attacked this as being but there is a cultural problem in the Anglo-Saxon countries about attitudes to money and Thrift and saving that needs to be addressed by Summits like yours and by National Action so thank you Lord mayor you are what you are doing is hundreds of thousands of people across this country and it couldn't be more important [Applause] hi thank you a very interesting range of topics come Professor Atul Shah City University of London what about the enabling role of financial institution in terms of exploiting customers who are illiterate in finance last week at the treasury select committee I think there's Chief Executives of the banks were brought forward and they were asked about savings interest rates and the answers were absolutely appalling credit card interest rates start at 24 and they are the same when savings interest rates were zero percent um and I can go on right simple things like lending and these same Banks the just I think today the news is they've made record profits at the expense of all that you've been talking about that the country is in Dire Straits and these banks have made record profits so if we talk about the good things these banks are doing and about the good intelligence when they are quite often fraudulent criminal organizations and they have been in and out of uh the courtroom for years and years are we being nice or are we being realistic thank you well good good challenge and and um I I I think I hope that you took away from what I said that this is not something where I think banks are without Fault by a contrast I'm actually saying that there is a a a real dearth of service that the banks are not providing but we also have to recognize that we have to create the environment to encourage financial institutions to provide these services and banks are not you know are not going to we we can't look at the banks of the lenders of Last Resort to uh to groups of people who you know who who are not going to be able to repay loans the banks are not there for for charitable purposes we have to shape something in a way that makes sense so my what I was suggesting there is that Sasha used these statistics that of this group 90 percent managed to repay their loans of this group of what are otherwise hard to bank that means 10 are not and what the banks are doing is they're charging they're putting a charging structure in place that looks at that segment of 100 and it increases the cost for everybody what I'm suggesting is that actually they should look at that 10 and spread the cost of those non-performing loans at that 10 across the whole of their banking population now that can only happen if everybody does it otherwise you end up in a situation where you know One Bank does it and ends up with poorer performing Patrick perhaps the there's a question hidden behind that which is how much can the man in the street trust the banking system because trust is a key part of this if you're wanting to um trust that group of people to give you money and then they're not going to Nick it and run off and get richer ly savings contracts more images or including pension pensions are the worst let's let them answer that I think yeah well I I would I would respectfully say that I don't agree with what you're what you're claiming I I think there are absolutely um we have a very strong regulatory system in this country with the pra and the FCA all of our financial institutions have a very high bar that they need to reach and I can tell you from having sat on the boards of financial institutions for the last 20 years the quality of oversight from non-executive directors on boards is of an exceptionally high level I I believe that the governance structure that we now have in this country and financial services is as good as any in the world I'm not saying for a moment that there aren't egregious situations where certain customers end up being significantly disadvantaged and you may very well be right in particular circumstances there are organizations that are taking advantage of people like that I don't think that is a common feature of our regular regulated industry I think it is a feature and a risk of the unregulated financial institutions in this space which is one of the reasons why we need to address that I think we should thank you very much I'm afraid we're all going to have to stop so we can have a drink but I'm I would like to invite Lloyd Grayson who's chairman of Gresham Council to come and close the evening very much Martin thank you I have the awesome responsibility of standing between you and happy hour so I'll be very brief firstly I want to thank you all in the finest tradition of Gresham that was stimulating a challenging even alarming but it was a fantastic hours performance so thank you all very much indeed will you join me in Thanking us I I I hope for those of you who are for whom this is the first experience of Gresham that it will encourage you to participate more frequently in what we have to offer um tomorrow is um is Valentine's Day and uh if you really want to crank up the romance there is no better way than joining Professor Victoria Baines for her talk on the problem of encryption in I.T highly recommend it first and all celebrating the city-wide Centenary of Sir Christopher Wren who by the way was Gresham professor of astronomy and his uh successor Professor Catherine Blundell will be discussing Ren's conception of the cosmos next month we have Philip mold kicking off our series on art history talking about portraits of Queen Elizabeth II there is a huge huge range of subjects and activities which we consistently strive to bring you inspiration and education and entertainment because rather like Marshall mcluh and I think that anyone who thinks there's a difference between education and entertainment doesn't know anything about either of them so please do come to our website and see what's on offer and actively support us in our mission of spreading the best of learning which we've been doing since 50 and 97 um before we adjourn to the Livery hall for our Libations and celebrations um would you please join me in thanking the lord mayor Andrew Patrick and Sasha and thank you all indeed for joining us this evening for this special event thank you very much

2023-02-20 15:51

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