The cost of living crisis has left many Brits in a state of shock, with many feeling like they have lost control over their finances. To give power back to the people, Cheddar, the UK bank-powered rewards app, has re-launched its loyalty app with seamless cashback capabilities. 

Cheddar 2.0 ensures consumers get cashback without any clunky experiences or long wait times. It also provides personalised recommendations based on their spending patterns. It also gives consumers the power to split bills with anyone – regardless of their bank. As a result, long or awkward exchanges are no longer needed to acquire the other person’s bank details.

As if that already wasn’t enough, Cheddar 2.0 is offering a new cash bonus referral feature, to quickly introduce others to effective ways to save.

Luke Ladyman, COO and co-founder at Cheddar says: “With the cost of living crisis eroding consumer purchasing power, people need a financial companion to help them spend smarter. Our new app harnesses the benefits of open banking infrastructure and the latest artificial intelligence.

“Consumers are empowered to use their spending data to strengthen their finances by accessing instant savings almost every time they shop. We look forward to accelerating our reach across the UK. Especially as we extend our partner base to become the UK’s number one and most innovative personal finance app.”

Open banking can generate non-stop savings

Available to UK residents nationwide, the new app ensures consumers never pay full price again. It links their bank accounts and credit cards to access saving solutions relevant to their spending. New rewards are available on the app at higher return rates from 150+ retail giants, including Amazon, ASDA and Costa. The app makes sure consumers make abundant savings on essential spending like groceries and fuel.

The app leverages open banking data and interprets user spending habits to match the most relevant options with the right consumers. This spending information – combined with Cheddar 2.0’s strategic brand placement – ensures key partners are kept firmly in the spotlight. Also, these functionalities means all brands can reach high-value new and existing customers and drive loyalty to maximise revenue.

• Francis Bignell

  Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

Access to finance and access to credit are quickly becoming some of the biggest topics in the world of finance. Particularly across the UK, people from all situations and backgrounds have revealed that it is much harder to access credit products or get loans approved. 

Now, new research from Tink, the payment services and data enrichment platform, has revealed that 78 per cent of 18 to 34-year-olds have had a loan application rejected. When asked why they had been disqualified from a loan, 12 per cent were told they didn’t have enough credit history to qualify, while 11 per cent were rejected because they were unable to prove their financial history.

Tink also revealed that younger people are abandoning ‘arduous’ applications, with no tolerance for any type of friction in loan application processes, meaning they may not be capitalising on the financial services available to them.

From Tink’s survey of 1,000 UK borrowers, 22 per cent of 18 to 34-year-olds abandoned a loan application and used a different lender because the process was too cumbersome. Meanwhile, when applying for a loan, 20 per cent of respondents said they had the correct documents, but abandoned the process because they needed to submit them manually (such as having to print them off and post them).

Another Tink survey of 200 UK lenders supports these findings, with research showing that 36 per cent of lenders cite manual income verification as the point when they see the most drop-off in the loan application process.

Similarly, the research suggests that cumbersome manual processes can be costly and time-consuming for lenders. Thirty-two per cent of lenders surveyed cite manual income verification as the most time-consuming step in their own risk decisioning process, and 25 per cent say document validation (capturing application information and analysing its authenticity) is the highest cost they face.

‘Harnessing data-driven risk decisioning solutions’

Jack Spiers, banking and lending director at Tink, commented: “Our research highlights a clear access issue amongst younger generations trying to borrow. Not only are a significant amount wrestling with cumbersome application processes, but they’re also being rejected for loans based on factors that suggest blinkered financial assessments.”

As a solution to overcome these barriers, younger age groups cite a willingness to give lenders permission to view transaction data from their bank accounts in return for smoother application processes and a better chance of securing a loan.

In fact, 40 per cent of 18 to 34-year-olds surveyed would enable lenders to digitally view transaction data from bank accounts to improve the application process, while 57 per cent would prefer the option of having loans tailored to their financial situation.

While the financial industry is often seen to move slowly when adapting certain areas of offerings and application processes to customer needs, Tink research suggests lenders are aware of the need for change.

Seventy-eight per cent of lenders surveyed agree reducing friction in the lending application process is important and would give them a competitive advantage, while 77 per cent say it’s crucial to improve risk decisioning models to give a more accurate view of people’s finances.

Spiers also added: “It is important lenders are harnessing data-driven risk decisioning solutions to offer fair, accurate affordability checks, while also removing the friction associated with manual application submissions. And it’s not just benefiting the end user. Adopting these models can help lenders too – boosting customer acquisition through improved success rates, while reducing operational costs.”

IDnow, the identity verification platform provider, has revealed that there is a massive gap in UK consumer knowledge when it comes to key tactics used by fraudsters.

The research by YouGov, commissioned by IDnow, reveals that many Brits are vulnerable to cybercrime which has seen exponential growth in the last year. Despite almost half (45 per cent) of the UK-based respondents (2,264 were surveyed) being aware that scans or photos of ID documents could be obtained by fraudsters, they continued to send them on channels like messenger apps, email and social media, which can be infiltrated by bad actors.

Deepfakes and threats of AI

Such activity could lead to identity theft, which IDnow believes should be a concern to the UK public, especially given the rise in deepfake technology. Developments in generative artificial intelligence (AI) mean deepfake technology can now be used to create hyper-realistic fake documents.  Not to mention videos too. However, the survey found that less than a third (31 per cent) of Britons know what deepfake documents are and are aware of the potential risks posed by digitally generated images of physical documents.

Interestingly, 48 per cent of 18- to 24-year-olds surveyed have shared ID documents via such risky channels. This is compared to just 21 per cnet of over-55s. These figures highlight the potential need to better educate the younger generation on digital fraud threats.

Lovro Persen, director document and fraud at IDnow, commented: “Many of us have seen the uncanny deepfake videos of celebrities that spread like wildfire across the internet, showing how easy it is to emulate the likeness of someone using AI. But worryingly, this research suggests that the UK public is not as concerned, or aware as they should be, of the risks associated with such digitally generated images or videos.

“The extraordinary leaps in AI technology mean it’s now almost too easy for a fraudster to carry out financial crimes. Consumers shouldn’t make it even easier for fraudsters though. Our advice is always to think twice before sending a scan or photo of your driving licence or passport into the digital ether via unencrypted channels, such as social media or email.”

Is fraud front of mind?

The survey also revealed that three-quarters of Brits are most concerned about banking fraud. An additional 37 per cent of Brits are most concerned about fraud via social media channels.

With 54 per cent of Brits unfamiliar with social engineering, encompassing deceptive tactics such as phishing or smishing, the majority of the population remains vulnerable to potential fraud attempts. Social engineering, one of the most prevalent and hard-to-catch fraud typologies, sees fraudsters manipulating trust or fear, putting consumers at risk of divulging sensitive information or falling prey to malicious links disguised as trustworthy messages.

In terms of the likelihood of being a victim of crime, a fifth (21 per cent) of Brits believe they are most at risk of someone hacking their social media profile. In fact, social media was the primary security concern for those aged 18- to 24 years old, with each remaining age group citing their main worry as someone accessing their bank account through identity fraud.

Hence, for accounts connected to larger sums or investments, three-quarters of Brits (75 per cent) would be willing to go through a lengthier online onboarding process, if this made it safer.

More must be done

Doug Pollock, vice president customer success at IDnow, explained: “Our findings show that banks in the UK do not always go far enough to make their customers feel safe and secure. They need to go further in terms of fraud prevention technology to meet their customers’ risk appetite, especially when their money is at stake. Because, and our research confirms this, if banks get it wrong, the majority of people (54 per cent) would consider moving banks were they to become a victim of fraud.

“We hope these findings highlight the massive impact online fraud continues to have on British people. Because fraudsters work across industries, regions and use cases, it’s vital we all work together – financial services, technology providers, government, law enforcement and the public – to identify and stop fraudsters before it’s too late.”

Buy now, pay later (BNPL) offerings continue to grow in popularity across the UK. However, a distinct lack of protections in the space is leaving many Brits in debt they can’t afford to pay back, personal finance comparison site finder.com has warned.

An increasing number of Brits are using BNPL services despite the government being unlikely to introduce planned regulation to the sector in the UK ahead of the general election this year. If legislation was passed in the space, it would grant the Financial Conduct Authority (FCA) more power to regulate BNPL firms and protect consumers from unrestricted, easily accessible lending.

Fifty per cent of UK adults have used BNPL at some point, an estimated 26.4 million Brits, according to new research by finder.com. Fourteen per cent (around 7.7 million) of these also started using BNPL for the first time in 2023, despite it still being largely unregulated.

After announcing plans to regulate the sector in 2021, the government released a draft of new rules in 2023 but has yet to publish a response to the consultation that followed, despite pressure from the FCA.

According to Liz Edwards, editor-in-chief at finder.com, it’s a ‘total lottery’ whether or not Brits can afford to repay what they borrow from BNPL lenders, which do not have to perform checks before approving loans.

Edwards explains: “Consumers need the same protections in this sector that they get with other types of credit – they need proper information upfront, such as what the deal is and what happens if they miss a payment, and they need to be able to complain to the Financial Ombudsman if things go wrong, which currently, they can’t.

“When I spoke to the Financial Ombudsman’s office about BNPL complaints, it couldn’t tell me how many it had received as it doesn’t keep records for unregulated products, since it can’t investigate them.”

Late fees and damaged credit scores among the ‘hidden’ dangers

Many BNPL providers have now introduced fees to customers for making late payments. Generally, these providers cap late fees at a certain price point but charge customers if they do not make repayments on time in line with their plan – with some charged multiple times per order.

The research from finder.com also found that 53 per cent of those who used BNPL in the 12 months to January 2024 had paid at least one late fee, with the average amount paid sitting at £23.50. With this in mind, finder has also revealed concerns that this will negatively impact the credit scores of many who rely on BNPL without fully understanding the associated risk involved.

BNPL usage is particularly common among the younger generations, as 69 per cent of millennials (aged 24 to 42) and 68 per cent of gen Z (aged 18 to 23) have used it. However, while BNPL is becoming more popular, almost 38 per cent of Brits have never used the payment method and have no intention to use it in the future.

Londoners have become more reliant on their savings than anywhere else in the UK, with almost three million people forced to dip into savings pots to afford essential everyday costs, according to new research from AI-powered transaction analytics firm, Fuse.

As the cost of living crisis persists, many UK residents have been forced to either dip into, or completely wipe out, their savings. This problem appears to be the worst in England’s capital. In fact, around 33 per cent of people in London rely on their savings to pay everyday expenses compared to 24 per cent of people across the UK as a whole.

As a result, exactly half of Londoners admit they are more concerned about their financial position than at any point in the last three years – compared to a 40 per cent UK average.

Fuse also revealed that these concerns are forcing 19 per cent of people in London to rely on credit to pay everyday costs with a further 18 per cent turning to borrowing to cover their mortgage or rent payments (compared to just 12 per cent across the UK).

Despite increasing reliance on credit, 20 per cent of people in London say their access to credit has worsened since the pandemic – higher than the UK average of 16 per cent. Many people struggling to access mainstream credit options are forced to turn to high-cost alternatives to afford everyday costs. Nineteen per cent of Londoners who borrowed from high-cost lenders had to do so as they failed the affordability tests of mainstream providers, compared to a UK average of 11 per cent.

Thirty-one per cent of Londoners say they want improved guidance and support from financial services providers, compared to 21 per cent of people across the UK. One in three (31 per cent) people in London also believe their bank could do much more to support them.

A London credit crisis?

Previous research from Fuse showed that 32 per cent of lenders have seen an increase in borrower defaults over the last 12 months and 31 per cent of borrowers have been rejected by lenders due to failing affordability checks.

Sho Sugihara, CEO and co-founder of Fuse, discussed the significance of the findings: “Londoners are facing a potential credit crisis – with the cost of living crisis showing no sign of easing, the savings pots that millions of people have been using as a crutch to cover everyday costs will soon have vanished.

“Without savings to fall back on, these people will be forced with little option but to turn towards credit to not only pay for essential costs but also to keep a roof over their heads. As we enter the expensive winter period, financial pressures will only rise. Unfortunately, increased reliance on credit is building at a time when many Londoners are experiencing a drop in their access to credit products.

“Lenders must ensure they not only improve access to affordable credit products but also enhance the support solutions on offer to prevent borrowers from piling up long-term debt. By utilising data insights into borrower affordability and vulnerability more effectively, lenders can identify potential issues for borrowers, stepping in with support at an earlier stage and reduce borrower defaults.”

New research from GoCardless, the bank payment company, finds that 45 per cent of consumers say they donate regularly to charity today; representing only a slight drop from the 49 per cent who did so last year, despite continuing financial difficulty caused by rises in the cost of living.

The GoCardless study shows that, despite persistently high inflation and interest rates rising to their highest level in 15 years, almost two in three (63 per cent) consumers have still donated to charity within the past few months.

Encouragingly, 37 per cent of respondents plan to continue giving to charity even if they are under more financial pressure. These results show that a large proportion of UK consumers remain committed to supporting the causes they believe in.

The research, conducted by YouGov with a nationally representative sample of UK consumers, pointed towards technology as one way to help increase donations. Over half (52 per cent) of respondents say they would give to a charity again if the donation process is fast and easy, which is why platforms such as JustGiving are focused on innovation and implementing new payment solutions.

This is already a popular option for supporters, with 32 per cent of consumers reporting that they have some form of automated payment, such as a Direct Debit, set up to give to charity on a regular basis.

The research comes on the back of GoCardless’ sponsorship of the GoCardless JustGiving Awards, a partnership between the fintech and its long-time customer. The online fundraising platform, which has processed $9billion in donations to date, has seen firsthand how donors have adapted so they can continue to give, despite a tough macroeconomic environment.

‘More people choosing to give little and often’

Oliver Shaw-Latimer, senior director of payments and innovation at JustGiving, said: “As a result of the cost-of-living crisis, we’ve seen a change in the way in which people donate to charities and good causes, with more people choosing to give little and often.

“In response to that change in behaviour, there’s an exciting opportunity for new types of payment technology, such as those powered by open banking, to play a vital role in helping more funds get to charities quickly and cost-effectively.”

Pat Phelan, managing director and chief customer officer at GoCardless, also added: “Even though we’re all struggling with the rising cost of living, it’s hugely encouraging to see people continuing to give. Charities that keep on innovating, putting the donor experience first and looking for new ways to increase efficiency will stand a better chance of weathering these tough times and getting into a better position for the future.

“We’re proud to work with JustGiving and others in the charity space to transform their organisation through payments.

“One innovation we’re particularly excited about is open banking payments. They’re smooth and secure, which meets consumer demand for a fast and easy way to give. And because they move money directly from one bank account to another, it keeps costs low – so charities can retain more of the funds for the causes they support.”

The UK has been a leader in the open banking space since its official launch in 2018. Its adoption has steadily increased since then to the point where one in five (21 per cent) of Brits are now making regular payments using the technology according to Moneyhub, the open banking paytech.

The Moneyhub research was conducted by Censuswide among 2000 nationally representative consumers. It shows that while cards remain the dominant payment method of choice, alternatives are being looked at. Open banking payments are one of these alternatives.

They enable users to make a payment directly through their phone’s banking app or online banking account. As a result, consumers can make faster, more cost-effective payments – especially when compared to standing orders, direct debits or card payments.

Payment preferences

In fact, according to Moneyhub’s research, open banking payments achieved a milestone earlier this year, hitting 11.78 million transactions in September. This was following a surge of active payment users (68.2 per cent) in July 2023 compared to the same month the previous year.

Payment type	Percent of Brits using	Percent of 16-24-year-olds	Percent of 25-34-year-olds
Direct debit	70 per cent	47 per cent	63 per cent
Through a phone with open banking	21 per cent	29 per cent	27 per cent
Through the website	21 per cent	21 per cent	22 per cent
Standing order	18 per cent	11 per cent	15 per cent
Payment on the phone	10 per cent	14 per cent	14 per cent
With a cheque	Two per cent	Three per cent	One per cent

High acquiring costs and settlement delays impact cash flow. This in turn triggers a need for alternative payments As more users become aware of the use cases of open banking’s variable recurring payments, such as regular bill payments, traditional forms of payment like direct debit (which currently sees 70 per cent of Brits using it) will fall to the wayside.

Mark Munson, MD of Moneyhub’s payment division comments: “The world of payments is constantly evolving, and the smart payment revolution that open banking enables is set to shake up how we manage our regular bill payments. Fifty years ago we would have seen payment by cheques or cash as the predominant tool to pay for bills, then direct debits and standing orders grew into popularity.”

Replacing traditional ‘alternative’ payments

As standing orders and direct debits replaced cheques and cash, it appears they are now being replaced by open banking tech. While website payments (21 per cent) and open banking payments (21 per cent) are used by the same amount of Brits, specific age ranges show a trend of adoption of the latter.

According to the Moneyhub research, 29 per cent of 16-24 year olds are using open banking payments compared to just 21 per cent using website payments, and 11 per cent using standing orders. The next age bracket shows a similar trend too. 25-34-year-olds also prefer open banking payments (27 per cent) to standing orders(15 per cent) and website payments (22 per cent).

Interestingly, close to half of those surveyed classed themselves as full-time students (44 per cent) and use open banking to make regular bill payments. However, this trend was not continued by the elder generations as just 13 per cent of those aged over 55 years old use open banking payments.

“Open banking offers greater flexibility, and quicker, more efficient and largely more cost-effective payments for both the merchant and customer. A new generation of consumers is embracing open banking payments.

“With new, innovative and more flexible propositions coming to market, open banking has demonstrated that early adopters of those services, not only demand a greater choice in what they are buying, but how they are buying it. They are not wedded to payment solutions from previous generations.”

As it emerges that around 37 per cent of Brits are in favour of a complete ban on cryptocurrency ‘mining’ in the UK due to its environmental impact, where does this leave the crypto market? Forbes Advisor reveals new data that hints at where the future of crypto may be headed.

Crypto mining is an energy-intensive process as it relies on significant amounts of computing power – causing many in the UK to oppose it. Some analysts have even suggested that Bitcoin mining alone consumes more energy in a year than some countries.

With this in mind, 42 per cent of Brits believe the crypto industry must do more to mitigate its environmental impact. Meanwhile, 51 per cent, are in favour of government regulations aimed at addressing and reducing carbon emissions caused by cryptocurrency activities.

Among adults aged 18 to 34, 44 per cent support a complete ban on cryptocurrency mining due to environmental concerns. Of those aged 35 to 54, 35 per cent favour the ban, while the same amount of those aged over 54 agree.

While there appears to be no substantial gender divide regarding support for a ban, 40 per cent of men and 34 per cent of women are in favour, men are twice as likely as women to oppose the ban. Seventeen per cent of men are against prohibition, while only eight per cent of women oppose the ban.

The Forbes Advisor study also highlights the need for more education on the issue. Overall, 59 per cent of Brits are not fully aware of how people mine cryptocurrencies and the environmental impact of this process.

How is this attitude to crypto impacting actions?

Environmental concerns influence the investment decisions of around 16 per cent of investors, whereas the majority prioritise other factors. The top considerations for investors are the potential returns on their investments (37 per cent), the cost associated with purchasing cryptocurrencies (31 per cent), and the popularity of specific digital assets (25 per cent).

Significantly, 21 per cent of Brits express a willingness to invest in environmentally friendly cryptocurrencies, even if they offer potentially lower returns. This is even more pronounced among those who have already invested in cryptocurrencies or are planning to do so, with 58 per cent open to making such eco-conscious investment choices.

Meanwhile, 38 per cent who have invested in cryptocurrencies have deliberately avoided specific digital assets due to their perceived environmental impact.

Mark Hooson, crypto expert at Forbes Advisor, explained his take on the findings: “Support for a crypto mining ban is notable, and a substantial number of investors are open to less energy-intensive ‘proof of stake‘ cryptocurrencies, even if it means the possibility of lower returns. Many investors are starting to weigh both the potential returns and the environmental impact of their choices.

“Those concerned about the environment will want to research and choose cryptocurrencies and investment platforms that prioritise sustainability. By increasing awareness and making informed choices, investors can contribute to a more sustainable cryptocurrency landscape.”

In total, 27 per cent believe it is possible to power cryptocurrency mining operations with renewable energy sources. When questioned about why they would not pursue this route, concerns about market stability (36 per cent) emerged as the primary reason. Other significant barriers include a lack of access to reliable information (29 per cent) and uncertainty regarding regulatory issues and legal compliance (25 per cent).