Fintech solving the long standing issue of missing customer and dormant assets in financial services 

Duncan Stevens, CEO, Gretel

Gretel, (www.gretel.co.uk)  the free online hub which reconnects consumers with financial services providers and enables the repatriation of lost and dormant accounts, has announced two new partnerships as it continues to unlock millions of pounds in value for the UK public. 

The latest partnerships are with Forester Financial, a leading provider of UK Child Trust Funds, and ClearScore, the leading credit score app and marketplace. Both partnerships have been extremely impactful in a short space of time: Gretel has matched almost £4 million in Foresters assets to its members in just a few weeks.  

With the commencement of the ClearScore partnership at the end of February, its 13 million UK users now also have access to Gretel to help track down lost savings and investments, with users finding over £2,200 in lost assets, on average. 

But how have so many dormant accounts become lost or forgotten?  This situation presents a considerable problem for both the industry and the UK government, as it limits the efficient allocation of resources and has numerous consequences for society at large. 

It is estimated that around £50bn is currently lying in dormant and unclaimed accounts, with many consumers becoming disconnected from their money and unable to track it down to reclaim it. 

Gretel estimates that 20.8 million people in the UK have become disconnected from financial products they own and there is as much as £78 billion collectively sat languishing in dormant or unclaimed savings and investments. By far the biggest pot of unclaimed assets is the £27bn† – £65bn  in lost pensions belonging to over 2.8 million† people according to industry data.

Dormant assets can have a significant social impact. The assets are often linked to individuals who have lost touch with their financial providers or forgotten about the existence of the asset. In many cases, these individuals or their families may be in need of the funds, whether to cover living expenses, healthcare costs, or to invest in education. The inability to access these assets can exacerbate financial hardship and inequality.

The presence of dormant assets can also pose regulatory and reputational risks for financial institutions. In recent years, regulators have been more proactive in identifying and addressing the issue of dormant assets. Financial institutions that fail to adequately address this problem may face fines, sanctions, or damage to their reputation. The industry must take action to minimize these risks and demonstrate its commitment to consumer protection and social responsibility.

So what is the solution?  The problem of disconnected customers and the consequential issue of dormant assets within the UK financial services industry is significant and complex. It presents numerous challenges for financial institutions, the government, and society at large, from the loss of value and misallocation of resources to the social impact and  regulatory risks, including an organisations ability to comply with the FCA’s new Consumer Duty. To effectively address this issue, a multifaceted approach is required:

Firstly there needs to be collaboration between the government, financial institutions, and consumers.  The UK government and financial services industry should work together to develop and implement a comprehensive national strategy which aligns with the Consumer Duty requirements and appropriately addresses the issue of disconnected customers and dormant assets. This strategy should include standardized procedures for customer reconnection and in turn, identifying, managing, and reclaiming dormant assets. Clearly, the Holy Grail would be a centralized database to facilitate consumer access to information about their unclaimed assets.  The Pensions Dashboard would have gone some way to starting this process, however it has been beset by problems, which is where fintechs can provide the answer.

By leveraging innovative fintechs, the financial services industry should simplify the process of reconnecting lost customers and identifying and reclaiming dormant assets. Implementing digital platforms such as Gretel for managing and tracking unclaimed assets, using artificial intelligence to improve data management, or developing mobile apps that make it easier for consumers to monitor and manage their financial assets are all potential opportunities which could radically transform customer engagement.

Finally, it is essential for the financial services industry to work together to address the issue of disconnected customers and dormant assets. This includes sharing best practices, pooling resources, and collaborating on initiatives aimed at identifying and reclaiming these assets. By working together, the industry can develop more effective solutions and ensure that dormant assets are put to productive use.