Since the 2008 financial crash, the rise in technology companies looking to help us make better decisions in our finances, using data and sometimes easier to navigate apps than our traditional banks, has created a host of so-called FinTechs emerging into the market.
A FinTech is essentially a Financial Technology company aimed at providing the end user (you the consumer) with a range of solutions to help them manage different elements of their finances.
We recently looked at the 6 FinTechs that could boost your business, but what about your personal finances?
The introduction of Open Banking has allowed for new FinTech providers to offer exciting new ways to help you with your finances by enabling companies to connect directly into your existing bank, so there is no need for yet another bank account or for you to fill in pages of personal information.
So whether it’s an app to manage your credit score, a simple budget tracker, or an easy way to remove fees when paying overseas. Taking control of your personal finances is easier than ever.
With so much choice on the market, it can be hard for consumers to cut through the noise and decide which tools will help them best.
Make sure that providers you choose offer secure solutions, whether they are authorised by the Financial Conduct Authority (FCA) or are listed on the Open Banking Register, there are several sources to help with your decision making process.
Below is a summary of the six most popular FinTech tools we think can help you manage your finances better in 2021.
MoneyBox offers a range of savings and investment accounts, allowing you to round up your purchases to the nearest pound and set aside the spare change.
To make your money go even further, MoneyBox also offers a vast range of investment accounts including a Stocks and Shares ISA, General Investment Account, Stocks and Shares LISA, Junior ISA and a Socially Responsible Investing Account. Investing can leave your capital at risk, so if you’d prefer a safer solution you can also choose to save to a 45/90 day notice account or LifeTime ISA, allowing you to earn interest on your ‘small-change’.
Since launching in 2015 MoneyBox now services over 450k users that deposit an average of £100m through the platform each month and a total £1bn in Assets Under Administration (AUA).
The company is based in London and recently completed a series C funding round, including raising capital through Crowdcube where they were overfunded at 707%.
In their own words MoneyBox says their mission is ‘to help everyone save and invest for their future’.
Unlike other saving and investment options you can open an account with a deposit as low as £1.
What are the costs? There’s a fixed subscription fee of £1 per month regardless of how many investment accounts you hold under one MoneyBox account. There is also a platform fee 0.45% of the value of the investment per year and a fund provider fee which ranges from 0.12% to 0.3%.
What the customers are saying: MoneyBox has an average of 4.3 out of 5 from 565 reviews including one user who says “It’s easy to track and weirdly makes it fun to save. Really like it.”
In a cashless society, it can be hard to teach your kids how to manage money. That’s where gohenry comes in, with a mission statement ‘to make every kid good with money’. gohenry was founded by a small group of friends who wanted a ‘simple, meaningful and common-sense solution for kids’ money management’.
After launching in 2012, their community has grown to over 1.35m users, both in the UK and USA. Headquartered in London, this tech company raised almost £12m through crowdcube and recently secured $40m in funding led by US-based growth-equity firm Edison Partners.
What makes gohenry so different? The parents remain fully in control and can easily set limits on their parent and child accounts to suit their child’s age and life stage, allowing parents to set weekly pocket money limits as well as helping kids earn and save by setting various tasks. The idea is that children understand the value of money they earn and the importance of money management whilst growing up. In their saving account children can set saving goals and work towards earning money to reach those goals by completing pre-set tasks.
Children can also show off their independent style with a range of card designs that can be personalised in their name – e.g. ‘goalice or gosydney’ – a unique feature to gohenry.
How much does gohenry cost? Unlike banks, they make no money from interest or debt and instead charge a flat-fee of £2.99 per month per child, which comes straight from the parent’s account. This fee includes a free Visa prepaid card unless you decide to upgrade to a customised card or EcoCard for a one-off fee of £4.99. One top up per calendar month is included in your subscription, with an additional 50p charge per load thereafter, so it’s good to try and understand how much you need to upload each month and avoid extra charges.
What the customers are saying: gohenry has an average of 4.2 out of 5 from 3,736 reviews on Trustpilot. It is praised for ‘giving children independence with their own money’, ‘teaching kids economics and the value of money’, and for being ‘easy to use and set-up’.
Crowdfunding has grown in popularity over the last few years, with several entrepreneurs using crowdfunding sites to raise equity, where they may have struggled to obtain investment through a traditional lender. Equally, crowdfunding also providers consumers with the chance to invest in early-stage businesses.
Seedrs is one of Europe’s largest crowdfunding platforms. They remove the barrier to investing by allowing individuals to invest in projects from as little as £10 and become part of ‘the next big thing’.
Since their launch in 2012, a total of £1bn has been invested through 1,243 deals.
So, what is equity Crowdfunding? The concept of crowdfunding allowed supporters of early-stage businesses to pledge funds for gifted perks such as a visit to the office or early release products, or just as a donation. Equity crowdfunding differs as funds are pledged in return for equity in that business – allowing investors to share in any future successes.
Authorised by the Financial Conduct Authority (FCA), they say they give ‘every Seedrs investor access to high-risk, high-return assets, together with the tools to build a diverse, growth-focused investment portfolio’.
How much does Seedrs cost? If you are looking to invest in a business, Seedrs charges a fee of 7.5% on any profit made, with no ongoing admin or management fees. Other fees may occur if investors transfer or sell their shares. If you’re an entrepreneur looking for investment, you only pay a fee if your fundraising is successful, including a success fee of 6% of all funds raised, a completion fee of £2,500, and a payment processing fee.
As with any investment, there are associated risks such as; loss of capital, illiquidity, lack of dividends, and dilutions. Seedrs advise that ‘investment should only be done as part of a diversified portfolio’.
What the customers are saying: Seedrs has an average of 4.4 out of 5 from 1,844 reviews on Trustpilot. With users saying they were ‘able to invest quickly and easily’. But some reviews complain of investors losing capital through investments that went south.
Pensions can be overwhelming, especially if you invest with multiple providers. PensionBee aims to help users consolidate their old pensions into one, easy-to-use plan.
Founded in 2014, PensionBee has since helped over 70k users invest over £1.4bn into pension funds.
What makes PensionBee different? They’re on a mission to make pensions ‘simple’ and give you complete ‘control and clarity’ over your retirement. They have created a simple online pension that you can access via a web dashboard or through their mobile app. They also claim to ‘actively fight’ for the rights of pension savers, by calling out hidden costs, removing jargon, and campaigning for consumer switching guarantees.
PensionBee currently offers nine different plans to suit different risk appetites. These include a Tailored Plan that reduces risk as you move through life, a Fossil Fuel Free Plan that excludes the fossil fuel and tobacco sectors, a Future World Plan that invests money into companies that pledge to move to an environmentally friendly economy, and Shariah Plan that invests money only into Shariah-compliant companies.
Signing up takes minutes. Enter your details, follow the instructions to provide information on any existing pensions you wish to move over, pr set up a contribution if you’re self-employed and don’t have pensions to transfer, and let the team handle the rest. Once you’re signed up, you can easily manage your pension online and make flexible contributions as you wish, with no minimum savings amounts. Once you reach 55 years old (57 from 2028), you can withdraw your pension at ease.
How much does PensionBee cost? There’s an all-in annual management fee of between 0.5% and 0.95% depending on which plan you choose. If your investment is over £100k, associated fees are halved for any amount over this level. Whilst it’s free to use PensionBee’s drawdown option, if you withdraw everything within 12 months of having a live balance there is a withdrawal fee of £480.
What the customers are saying: PensionBee has an average of 4.7 out of 5 from over 3,500 reviews on Trustpilot. With users complimenting the ease of use and helpful customer support team.
Taking control of credit score can be hard work. Several providers offer you a snapshot for free, but you often have to pay a monthly subscription to access more details.
After launching in 2006, TotallyMoney has secured over £34m in funding. Silicon Valley Bank provided £5 in financing in November 2019, following a £29m investment from Scottish Equity Partners and Elliott Advisors (UK) Limited. They have since grown their user base to over 3m.
TotallyMoney is a credit eligibility and comparison website that allows you to make better sense of your credit report, so you can see exactly what affects your score every month. Ultimately, helping you take control of your finances.
TransUnion provides TotallyMoney with the data to build your free credit report. You’re scored from 0-710 and anything above 604 is classed as good.
Why is it important to have a good credit score? If you’re looking at buying your own home, you may be looking to take out a mortgage and you’ll need a good score to get accepted and the benefit from better rates. If you have a good credit score it also means you’re likely to get better rates when you take out other credit products such as loans and credit cards.
Ultimately, knowing your credit score, allows you to apply for credit with more confidence when you decide to.
How do you sign up to TotallyMoney? Signing up takes minutes, simply enter a few personal details such as your name and date of birth. You’re then asked a few other details to help validate your identity. These questions are the same as other credit reporting services and are required to keep your data safe. The good thing is that because TotallyMoney is free to use for life, you don’t need to enter any credit card details, making the whole process much quicker.
How is TotallyMoney free? As a credit broker, they make money whenever their users are accepted for a credit card or loan, allowing them to offer their platform for free for life.
What the customers are saying: TotallyMoney has an average of 4.7 out of 5 from 11,181 reviews on Trustpilot. With one user saying ‘A useful App that guides and supports your credit rating. The perfect tool to know where your finances stand.’
Every time you spend in a foreign currency you’re likely to be paying upwards of 3.25% in fees when you use your high-street debit card.
The Currensea travel debit card offers a new solution to this problem, in the form of a world-first Open Banking Debit Card. A card that works with your existing bank account, allowing you to access 180 currencies, without worrying about hidden fees.
There is no need to sign-up for a new bank account or worry about topping up a prepaid travel card. This means that you still benefit from the reliability and security of your High-Street Bank, with the added innovation and savings of a FinTech.
Thousands of satisfied customers have used our FCA authorised travel debit card to make online purchases, travel, and other holiday purchases worldwide.
Currensea also allows users to offset their carbon emissions when they travel through their partnership with onetreeplanted.org. You can choose to contribute a proportion of your savings and automatically spend trees every time you spend with your Currensea travel debit card. Every 75p saved plants one tree. For example, if you contribute a third of your savings and spend $100 on a family lunch in New York, we’ll automatically plant a tree on your behalf. Currensea has already offset over 1 million KG of CO2.
What the customers are saying: With an average Trustpilot score of 4.7 out of 5 based on over 2,000 reviews, customers mention that it is ‘seamless to use’, has ‘excellent service’, and enables customers to ‘draw cash and pay bills abroad in the cheapest way possible’.
There are several FinTech solutions on the market to help you better manage your finances and save money.
Open Banking, whilst relatively new, allows new FinTech providers to create new solutions that help consumers get more from their traditional high-street bank.
Consumers benefit from more choice, innovative solutions, and better insight.
There are hundreds of FinTech providers to choose from, with more entering the market every day. Depending on what issues you need solving, you might find a new tool that has a positive impact on your finances.
Want to find out more? Get in touch today.
Currensea Limited is registered in England and Wales (No. 11413946), authorised by the Financial Conduct Authority (Reference No. 843507) and is a Principal Member of Mastercard. We are registered with the Information Commissioner's Office (Registration No. ZA524676).
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