The Yorkshire boss who thinks technology can free thousands from poverty

Andrew Rabbitt
Andrew Rabbitt
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Andrew Rabitt is leading a technological revolution that could free thousands of people from poverty, writes Deputy Business Editor, Greg Wright

WHEN you’re at the bottom of the econo-mic ladder, the odds are heavily weighted against you.
Many people have developed an unhealthy reliance on payday loan firms which can make it much harder for them to take control of their finances. I recently heard from the boss of a claims management firm who told me that one of their clients had been allowed to build up 137 consecutive payday loans, without anyone apparently questioning whether this was a wise decision from a commercial or ethical perspective.
Andrew Rabbitt is at the helm of incuto, an Ilkley-based ‘fintech for social good’ business, which is determined to put a spring in the step of the alternatives to payday lenders. The company provides technology to credit unions and community-based banks and lenders, with the aim of tackling the ‘poverty premium’ and giving low-income families another option.
Mr Rabbitt pursues his mission with an evangelical fervour. He regularly speaks in public on why ‘poor means more’ when it comes to paying for goods and services and how technology could free people from debt and poverty.
Incuto understands the challenges many community-based banks and lenders are facing. These include competition from rival banks and payday lenders, legacy technology and paper-based systems.
Community-based lenders can also be held back by limited distribution channels and difficulty engaging with new and existing customers. Incuto works in close partnership with credit unions and community banks in a bid to transform their services to members.
Using different tools and new technology, it builds a service to suit each client which balances the need to drive sales with the principles of ethical and responsible banking.
Mr Rabbitt said his passion for helping people on low incomes developed when he started his working life in the third sector. He discovered that life is far from rosy for people on low incomes.
Credit unions are non-profit financial organisations that offer an alternative to banks and building societies for saving and borrowing. They can offer better rates than the banking giants but their size – they are usually on a small scale – and dated technology can leave them at a disadvantage.
Mr Rabbitt, who has a background as a business consultant, was alarmed to discover that many credit unions were being hit by falling membership numbers.
Some credit unions “still had bits of paper flying around” which made it much harder for them to compete with the sleek, powerful payday loans firms, he said. He wants incuto to provide technology that will propel credit unions into the 21st century.
He added: “We want to leapfrog the banks. Credit unions are much smaller and more diverse. It is a sector built on the concept of fairness and equality.”
Incuto has been selected by The Treasury as the sole technology partner for a two-year pilot of its prize-linked savings scheme for credit unions.
Over the summer, the Treasury revealed the 15 credit unions which are participating in the pilot, with incuto on board to deliver the scheme.
The Treasury’s new savings scheme for credit unions offers cash prizes to savers. It is designed to boost awareness and membership of credit unions with the goal of helping people to increase their financial resilience.
Incuto’s technology enables credit unions to digitise their service and compete more effectively with banks and short-term, high-cost lenders.
It has 1.1 million accounts on its platform. Incuto is playing a key role in coordinating the credit unions participating in the Treasury’s pilot scheme.
Mr Rabbitt said: “Credit unions and community-based lenders offer a viable and more ethical alternative to short-term, high-cost credit such as that offered by payday lenders.
“We’re delighted to partner with the Treasury on this exciting project.
“It has never been more important to raise awareness of credit unions, and take steps to counter the financial hardship and exclusion which can result for some people when turning to pay day lenders.”
Mr Rabbitt added: “Our technology allows credit unions and other community-based banks and lenders to digitise the customer journey, as well as tackling financial exclusion via access to a bank account, sort code and debit card.
“Alongside the technology, partnerships with Starling Bank, Post Office, Vocalink, Telefonica, Mastercard and Experian give people better access to free-to-use services.
“It’s not just about enabling people to manage their money online, it’s about giving them financial freedom and the same level of interaction and engagement that they would receive from a high-street or online bank.” Tech Nation, the network for tech entrepreneurs, has included incuto in its 23 ‘scale-ups’ accepted on to its 2019 Fintech growth programme.
The programme is delivered as part of the Treasury’s Fintech Sector Strategy to maintain the UK’s place as a world leader in the sector.
Mr Rabbitt believes the lack of access to affordable credit is a big driver of the poverty premium. He is determined to change all that by making credit unions accessible to a much wider audience.
“We resisted the pressure to move to London,”’ he said. “We have got a really great team based here in Ilkley. There is an eco-system of other companies based in Ilkley in financial services.”
Incuto is also working with the Church of England to improve financial education, so the consumers of the future make better choices. Incuto, which has 20 staff, plans to speak to a new round of investors early in the new year.
It has already received backing from a number of social-impact focused investors, and is set to see its turnover rise from £1.2m to £3.5m next year.
“Our mission is to transform this sector and tackle the poverty premium,’’ said Mr Rabbitt.