OPEN BANKING: ALT-FI Finding somewhere to live is a stressful – and expensive – experience for anyone. But the UK’s four million renters have a unique set of problems. Jamie Campbell’s open banking-driven platform Fronted is making it easier for them to move on Jamie Campbell had witnessed what it was like to be at the wrong end of the property ladder: that is, below the first rung. Which is why he launched Fronted to support one of ‘the least well-lookedafter demographics in the UK’. Renters.
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So, as co-founder of Fronted, he’s set out to make at least one of aspect of private tenants’ lives easier, using open banking to prise a down payment for their next home when the deposit is still tied up in the last. For many of the UK’s nearly 4.5 million households in private rented accommodation, who are, on average, moving every two to four years, having to find around £1,000 every time they relocate is at worst, impossible, and, at best, a struggle. By using open banking and financial technology to offer a credit product designed to finance deposits directly, Fronted believes it can reduce the emotional stress and time-consuming hassle that comes with moving, lending to tenants more cheaply than existing options and at lower risk to itself. As Fronted charges no early repayment fee, Campbell says it’s a solution particularly suited for those looking to bridge the payment gap between tenancies, when a new deposit may be requested before an existing one has been released. That was precisely the situation his girlfriend found herself in. “The landlord put the property on the market and they had to leave, pronto,” says Campbell. “But they needed two or three months to save up to move or borrow. I thought somebody must have fixed this because, to my mind, it’s where fintech works best: where there’s a niche customer problem, which is felt really acutely, that technology can make easy.” But, back in 2018/19, he couldn’t find any. “There were [no-deposit] insurance schemes available, but they were really expensive, and mostly owned by estate agents,” says Campbell. “When I started digging into the size of the market and how many people who are renting don’t have savings, I was like ‘OK, there’s something interesting here’. That started the ball rolling.” He wasn’t new to this area of finance. While working at Bud, the UK-founded startup helping banks deliver open banking solutions, Campbell had been involved in another solution addressing problems in the rental sector. In 2017, the Government announced the Rent Recognition Challenge – a £2million prize fund encouraging firms to develop applications to enable tenants to record and share their rental payment data with approved lenders and credit reference agencies. Bud used the fund to build AI software that automatically detects when an individual is paying rent and prompts them to get the payments verified. These payments are gathered in a rental profile that can be shared, via open banking APIs, with banks, mortgage brokers and other relevant services, to help renters demonstrate good financial management on their way to home ownership. Issue 20 | TheFintechMagazine
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