Identifying the financial Void – and the vulnerable consumers it pulls in

By Andra Sonea, Weisi Guo, Stephen Jarvis and Faith Reynolds
Posted on June 03, 2019

Consider Tim, a 70-year-old wheelchair user living in a remote town in rural UK. Making a financial transaction hasn’t got any easier for him: nowadays, he’s required to take a trip to the local post office, which is only open one morning a week, or to take the bus to the nearest bank 20 miles away. But the bus comes only twice a day, and the wheelchair area is often already taken, forcing him to take a rather expensive taxi.

Tim is stuck in what the Financial Conduct Authority (FCA) calls “the Void”1. The Void sucks in consumers who “get ‘stuck’ or ‘blocked’ from accessing financial products and services because of physical ability and capability issues.”2 Tim finds himself in the Void because of an environmental failure; there isn’t much he can do about it. Financial infrastructure is as critical as water, transportation or energy, all of which is needed to guarantee a comfortable daily life for all citizens. Outages or interruptions to such infrastructures entail significant economic and social costs.

To ascertain coverage, robustness and resilience, it’s necessary to map out the way various critical infrastructures are built. Think of the legendary London tube maps, so ingrained within the collective minds of the population that everyone knows to avoid the Northern Line at 8am. And the UK energy map is so nuanced that when the popular tv series “Eastenders” comes to an end five times a week, France allegedly has to provide extra energy to cover the massive energy spike caused by millions of kettles being turned on at once.

“Like London tube maps, our research aims to contribute to building the infrastructure map of retail financial services.”

Mapping out the financial Void

Retail financial services don’t have anything like this. Over the last decade, financial institutions have been nailing up their branches and “axing” free ATMs3, 4, 5 because many customers now use digital banking. However, British media merely report the quantity and rarely the location of closures, failing to address the social ramifications. Even the latest Treasury Committee report6 does not provide any framework whatsoever for tackling the issue.

This lack of visibility motivated our research at the Warwick Institute for the Science of Cities. In order to build the infrastructure map of retail financial services, we need the physical locations of ATMs, branches and post offices on the one hand, and the availability of fixed and mobile broadband that enables digital banking on the other. Underpinning this is socio-economic data that characterises the communities affected. Who lives there? Are they employed? How old are they? It’s pretty basic data, one would presume, but we were startled at the unavailability of complete granular data.

Needed: more transparency

In response to the Competition and Markets Authority’s Open Banking Order, the largest nine banks in the UK have been required to make available the locations of their branches and ATMs7. Whilst getting the data from their open APIs was relatively easy, the other players in the industry are not held by the same requirements. For example, TSB is not mandated to provide APIs.

To make the situation even less transparent, the vast majority of ATMs within the UK are owned by payment operators such as Cardnetics and Note Machine, companies that are not at all required to provide APIs. As such, it was difficult to provide a complete picture of ATM and branch locations for the UK, forcing us to gather data through a cumbersome web-scraping process. Thankfully, the Post Office provides an excel file open to everyone, containing all their locations within the UK.

It would be helpful if policy-makers considered how their intention to mandate open data for financial industry can be truly achieved. If it is their true intention to understand the continuously shifting physical financial infrastructure, the regulators should extend their requirements for open APIs to all participants.

Searching for mobile blackspots

Initially, we were glad to discover that Ofcom, the UK communication’s regulator, has APIs8 as well. We were informed, however, that one is not allowed to build a data set from their API. Ofcom’s online mobile broadband checker9 alleges that “you are likely to have good coverage” for 95% of all UK postcodes, which would come as a surprise to anyone who has been on holiday in, say, Dover. Ofcom’s terminology of “good coverage" is undefined and makes no distinction between different levels of service. It is simply not the case that 95% of the country has the same level of coverage. As a result, the data is not usable for research at this point.

The alternative to Ofcom’s APIs was to use their ready-made dataset, but this is aggregated at Local Authority level10, obfuscating the blackspots we wish to identify. Luckily we were able to source a detailed dataset for fixed broadband from the CDRC UK11. However, the question of mobile data remains unresolved.

“To develop spot-on policies in response to identifying the Void, it is highly useful to first understand the profile of the population affected.”

Constructing a collated picture

If one wants to develop spot-on policies in response to identifying the Void, it would be highly useful to first understand the profile of the population affected. However, the devolved nature of the statistical functions in England, Scotland, Wales and Northern Ireland leads to varied measurement methodologies in each of these countries and different scales in respect to the same phenomenon. Constructing a collated UK picture is not easy. We are grateful to the researchers from University of Bristol who made available a UK-wide Indicator for Multiple Deprivation which has been instrumental in our research.

Despite all these challenges in sourcing and putting together the data, we are already analysing spatial data, and we cannot wait to share the results with the wider community as soon as our report comes out in the summer.

1 FCA. “Access to Financial Services in the UK.” FCA, 2016, 160.
2 Rowe, B., De Ionno, D., Peters, D. and Wright, H. , 2016. “Mind the gap. Consumer research exploring experiences of financial exclusion across the UK.”
3Cash Machines to CLOSE: Thousands of Free ATMs Could Be AXED across UK | UK | News | Express.Co.Uk. Accessed May 2, 2019.
4BBC. “Free ATMs ‘Vanishing at Alarming Rate,’” May 1, 2019, sec. Business.
5BBC. “Labour Could Use Post Office for New Bank,” March 31, 2019, sec. Business.
6Consumers’ Access to Financial Services - Treasury Committee - House of Commons. Accessed May 17, 2019.
7Open Data API Dashboard - Developer Zone - Confluence. Accessed May 17, 2019.
8OFCOM, Dev Portal. “ Developer Portal.” Accessed May 17, 2019.
9OFCOM, Mobile and broadband checker. “Home - Ofcom Checker.” Accessed May 17, 2019.
10OFCOM, Data Downloads. “Data Downloads.” Ofcom, December 15, 2017.
11Broadband Speed (2016, 2017) - 2017 Average Broadband Speed by OA - CDRC Data. Accessed May 17, 2019.

This project is a TFI short-term research grant winner. Andra Sonea is a PhD Candidate of Urban Science, University of Warwick; Weisi Guo is Associate Professor at the School of Engineering, University of Warwick; Stephen Jarvis is Professor of Computer Science, University of Warwick and Faith Reynolds is an Independent Consumer Expert.