Published on 6th January 2023

Our recent research paper on Britcoin examined several of the failures in the Fintech digital payments industry that have gone unresolved.

The paper is entitled ‘CAPTURE – BigTech and Digital Payment Giants dominate the committees evaluating the replacement of physical cash with ‘Britcoin’ – a UK ‘Central Bank Digital Currency’’.

You can find a click-through to the full paper here:

Fintech has gone big on its relevance for financial inclusion, but this seems to us to be a cynical ploy to pander to contemporary mood music and conceal its lack of content.

CBDC at least is irrelevant to financial inclusion, as the Hong Kong Monetary Authority’s work on Central Bank Digital Currency (CBDC) concluded: ‘issues of declining cash use and financial inclusion do not serve as compelling rationales to introduce e-HKD’.[1]

Since this opinion was issued, the case of FTX – the failed crypto currency exchange[2] – has put a wider question mark against the veracity of claims that any type of digital or crypto product can serve financial inclusion.[3] Just because promoters of a product espouse philanthropy and declare that it serves financial inclusion does not bind others into believing them, and does not mean it is true.

The phrase ‘predatory inclusion’ has been coined to indicate where those who were supposedly to be the beneficiaries of the democratization of finance in the name of social justice have been those most roundly despoiled by the products bearing that advertising label.[4]

At a lower level of damage we have ‘virtue-signalling inclusion’. Here in the UK, Open Banking, the Financial Conduct Authority’s new duty of customer care, The Payment Association’s Project Inclusion – to name but a few – are examples of policies and initiatives claiming to make a contribution to the inter-twined themes of social justice, the democratization of finance, financial inclusion and so on.

We do not intend to repeat in detail our critique of the collateral, produced by Pockit, behind Project Inclusion.[5] The collateral exaggerated the size of all the elements in the ‘Poverty Premium’ except the cost of credit. This was so much in preponderance over the remaining elements that the ‘Poverty Premium’ did not exist in the way described – as a significant cost uplift for ordinary services imposed just because you had less money. The issue was lack of money and lack of access to credit, meaning one could neither charge up a pre-paid Mastercard nor obtain a Mastercard credit card. The former – Pockit’s service – was irrelevant, whilst the latter – the real solution – was unavailable.

Never mind, ‘financial inclusion’ plays well in the media, and perhaps one simply has to jump aboard the ‘inclusion’ bandwagon, as Fintech has vigorously done, to be in tune with the contemporary mood music and to avoid accusations of trying to build a business and create wealth. Good people care about the vulnerable; bad people work to create wealth.

This mood music now has its orchestra installed at the very top of UK society. We know that Fintech’s biggest supporter in the UK occupies the office of Prime Minister. His acolytes are quickly getting with the programme, hence the Chancellor of the Exchequer, in his Autumn Statement, packaging his policy of raising all state benefits in line with inflation as betokening the Conservative Party as ‘compassionate’ and as committed to protecting ‘the most vulnerable in our society’, without stating any definitions of ‘vulnerability’. Good people care about the vulnerable, and are entitled to despoil bad people of their wealth in order to do so.

The Chancellor’s positioning inferred that the entirety of the 5.6 million Universal Credit claimants are vulnerable.[6] If the claimants themselves are, then the unknown number of others who benefit from Universal Credit as dependants must also be.

The Financial Conduct Authority’s ‘Financial Lives research’ from 2021 went far further and claimed that 27.7 million adults in the UK had characteristics of vulnerability such as poor health, experiencing negative life events, low financial resilience or low capability.[7] This research is the collateral behind the introduction of the duty of customer care. Any distinction between ‘being vulnerable’ and ‘having characteristics of vulnerability’ gets lost in the noise. 27.7 million is 50% of the UK’s working age adults. Factor in the same proportion of the UK’s 7.6 million dependants below the age of 18, and it turns out that 53% of the entire UK population is vulnerable, or at least is living in a vulnerable household.

The creation of such preposterous statistics, the hyperbolic verbal statements – like the Chancellor’s – that go with them, coupled with the 24×7 media coverage of the NHS’ supposed failure to meet the health ‘needs’ of the nation, the drumbeat in favour of better provision for adult social care, mental health care and dental care, combine to deliver a constant-loop of mood music whose lyrics are that over half of the UK population is unable to take care of itself, and that the other half of the population needs to pick up the pieces. Self-certification and an eradication of objectivity and sanity checks enable anyone to identify themselves into the 53% of ‘takers’ and out of the 47% of ‘givers’.

These are only the figures as of now: the direction-of-travel is clear. The percentage of ‘takers’ is open-ended in an upwards direction, likewise the degree of their ‘needs’. Being a ‘taker’ is good, because a ‘taker’ is vulnerable and deserving of compassion. ‘Givers’ are bad, and should ante up all that they have. This might be modern and progressive but it signposts a national financial disaster.

We should not be too hard on Fintech, CBDC, crypto and their extended ecosystems and make them take the sole blame. After all, they are on the make, with increasingly desperate investors on their backs, only hyped-up vapourware to sell, and no legitimate revenue model even if they do ensnare a few hapless users. It is not suprising that they should mindlessly go with the flow and parrot vacuous, benevolent-sounding nonsense if governments and authorities are doing the same. All they are doing in playing to this world view and identifying themselves to the ‘takers’ is to establish their credentials as modern and progressive. Who cares what is true in our post-truth world? Everyone can be better off at the touch of a button by using Fintech services: free and instant international payments, interbank exchange rates, elastically stretching your money with budgetting apps AND high returns on surplus cash AND cut your loan costs AND save for a house at the same time. A future of health, wealth and happiness awaits: you don’t need to work hard and over an extended period. Money can even be conjured out of thin air – look at bitcoin.

Welcome to the Fintech world. It’s a euphemism for national delusion, ethical bankruptcy and, in due course, financial bankruptcy (that’s if you have not already been made bankrupt through Authorized Push Payment Fraud thanks to your Fintech provider selling your bank statements on to scammers).

[1] accessed on 29 April 2022

[2] accessed on 14 November 2022

[3] accessed on 3 January 2023

[4] accessed on 3 January 2023

[5] accessed on 4 January 2023

[6] accessed on 17 November 2022

[7] accessed on 16 November 2022