Banking Tech Awards 2022 Winner: Updraft – Best Digital Initiative for Lending
Updraft is a mobile solution that enables people to break away from expensive debt such as credit cards, overdrafts and buy now, pay later (BNPL) loans. The company’s reinvention of financial planning and disruption of unsecured lending markets has been recognised by the Banking Technology Awards, with the solution winning the best digital initiative award in the category of lending.
Updraft – reinventing financial planning and disrupting unsecured lending markets. Image source: Updraft
Updraft is on a mission to help people break up with their credit cards and better manage their money. The solution is designed to change habits, with purpose-built lending products and contextual coaching and conversations.
“We educate and empower our members, we turn them from borrowers to savers and help them make changes that pay off, allowing them to live confident and financially carefree lives by lifting them out of debt,” says Aseem Munshi, CEO and founder of Updraft. “We are delighted to have won this prestigious award and it reflects the innovation and impact that we are bringing to the market and the fact that we care deeply about our users and their financial wellbeing.”
The solution
Updraft has created a personal finance ecosystem within a mobile native experience. A Credit Score & Report help users understand what affects their financial positions and gives suggestions to improve it. It brings access to high quality low-cost credit products with Updraft Credit. This uses open banking to provide a single place to view all spending and borrowing. There is also Money Talks, rich two-way messaging available to members whenever they want.
Last year, Updraft added Goals, where users can set extra payment credit goals to pay off even faster and Updraft Payce, where users are helped to convert their credit card purchases into cheaper, faster and flexible pay-off plans.
Customers love Updraft Credit and trust and advocate the brand. Users rate Updraft 4.7 on Trustpilot. Particularly highlighted by users is the fact that they can have non-judgmental, jargon-free plain English conversations with Upstart whenever needed.
The solution leverages artificial intelligence (AI) / machine learning (ML) on banking transaction data and provides personalised goals and tasks to save money, build savings and earn access to high quality credit. It also analyses transactional and mobile engagement data to better underwrite credit risk and lowers the cost of credit.
The requirement
Millennials/Gen Zs in particular are being crushed by the cost of living crisis, propelled by the increase in inflation and reduction in wage growth. They entered the workforce during the worst downturn since the great depressions and were impacted through Covid-19 during their peak earning years.
Unsecured debt is not generationally balanced, with older Millennials being 50% more likely to have unsecured debt than the average UK adult. As a result, debt will continue to escalate and things will get tougher for users of credit cards, overdrafts and BNPL products. They simply do not have the means to save enough to own a home or for other important life goals.
The market is large and growing with expensive balances like credit card, overdraft and BNPL now hitting above the £50 billion mark in the UK.
Major brands in the market maintain their focus on contributing to the problem. Most lenders provide solutions that further fuel spending.
Managing money is hard especially for users of “sticky” credit cards, overdrafts and now increasingly BNPL products. The core issue is a problem of inattention, driven by several factors – product complexity, psychology (self-efficacy, shame) and being time poor with busy work lifestyles. As a result, customers overpay for the use of credit.
This leaves a vast space for a new brand that is truly committed to helping customers optimise their money management and reduce high interest revolving debt, thereby setting them on a path to financial freedom.
The impact
Updraft has originated more than 300,000 users and surpassed £110 million in gross lending. More than 50% of users make lasting changes with credit cards and other revolving balances, £1,000 interest cost saved over the lifetime of a loan and achieved £1.6 million annual savings and £13 million lifetime savings.
Updraft was founded in 2017 and has been relentlessly delivering products and solutions that make a real impact in its users’ lives since then. The Banking Technology Award reflects its innovative, disruptive nature, with plenty of new features and facilities to come, which will allow Updraft to build on its impressive reach and impact to date.
Sponsored by Updraft
