The future of finance - as imagined by Ryanair

No frills finance is taking off - and while many have an opinion on allocated seating, printing your own boarding pass and paying for food on-board, the model remains simple but thrilling.

When Easyjet, Ryanair and Jet2 launched they shook up an airline industry dominated by high prices and package holidays. They were able to offer a direct and simple way to get a better rate on your seat using the internet. They offered a new way to travel, giving people unprecedented access to air travel on a scale never seen before. While many have an opinion on allocated seating, printing your own boarding pass or paying for food on-board, the model was simple but thrilling – give the customer a low-cost, destination rich, frill-free option and see if it flies. It did, and became the new normal.

Fast forward 20 or so years, and something similar is happening in finance. While a few canny and charismatic entrepreneurs drove the adoption of low cost flying, it is a combination of people power and the latest technology that is revolutionising finance in this digital age - taking the frills out of finance but putting great rates back in. An example of this would be the peer-to-peer finance industry, which innovation specialists Nesta calculate to be currently worth a staggering £482 million in 2013 alone. Not enough to topple High Street banking yet, but certainly enough for mainstream customers to take notice. Peer-to-peer lending businesses have taken a very old model in banking, which is essentially lending and borrowing, and modernised it through online platforms to offer a more direct, open and transparent way to lend and borrow. It is a product that offers reward balanced against risk as platforms aim to diversify the risk, only lend to most credit worthy borrowers and some platforms even have safeguard funds in place in case of a default. There is also a social element as many lenders appreciate the community spirit involved as they are helping people finance a new car or home improvement or supporting a business to grow through a business loan. The return for enabling this is personal, and provides a financial incentive which currently offers returns two or three times higher than the rate of inflation. Meanwhile, high street banks offer savings rates so low that in real terms its costing people to save money.

In October 2013 the industry warmly welcomed the draft measure outlined by the Financial Conduct Authority (FCA) for regulating peer-to-peer lending. Put simply, regulation will help improve trust in an industry that is still growing and open it up to a whole new consumer audience. How they are regulated is one of the most common questions asked of peer-to-peer lending platforms, as there is an added level of perceived safety that regulation seems to bring to any industry. Some have speculated that regulation may stifle the creativity of those currently operating in the sector, but the majority believe it will normalise and legitimise these more democratic forms of finance.

With all businesses more accountable and connected to their customers than ever before, repairing the damage caused by the financial crisis is proving tough for traditional financial institutions. While there will always be a desire to have a transaction based relationship with banks, the increasing popularity of alternative finance options cannot be ignored. Startling growth rates of 200 per cent year-on-year have been predicted for the peer-to-peer lending platforms over the next few years, helped on by regulation and other benefits that this allows like tax free savings in ISAs. The take-off of peer-to-peer lending has been steep but it’s for many that regulation will bring about a smooth landing, with higher volumes of passenger numbers in 2014.

Giles Andrews is CEO and Co-Founder of Zopa

Could the principals of budget aviation be applied to finance? Photograph: Getty Images.
Giles Andrews is CEO and Co-Founder of Zopa
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What the Operation Black Vote poster row tells us about race in Britain

The poster aimed to draw attention to the cause of BAME voter participation - instead it stirred something deep in the British psyche.

Political advertising campaigns need to be controversial, but go too far and the fall-out can be disastrous. Critics of the new “white thug” billboard campaign, aimed at encouraging ethnic minorities to vote in the EU referendum, think that Operation Black Vote (OBV), the group behind the campaign, had made a spectacular misjudgement. “Racist and divisive” were some of the milder reactions on Twitter. Soon UKIP’s Nigel Farage jumped in calling it “disgusting”, and new London mayor Sadiq Khan claimed it “reinforced stereotypes.”

I took a long hard look at the poster after witnessing the torrent of hurt and anguish it provoked, from white and ethnic minority people alike. To me the poster depicted an angry neo-Nazi type young man fuelled with race hate, and an Asian elder stoic in the face of prejudice, like so many of her generation have been since arriving in the 1970s. It was set in a working class environment familiar to me, a place where even today Asian shopkeepers face regular racist hostility and the far right still organise on the extreme fringes of London in every respect.

The poster is reminiscent of a century-long grassroots struggle against fascism and the intersecting drive to raise the anti-fascist vote from black, Asian and minority ethnic (BAME) communities and the progressive working class. From the battle of Cable Street in 1936 to the ousting of British National Party councillors from Barking and Dagenham town hall in 2010. Raising the BAME registration rate and vote is a challenge because of disillusionment with a political system that appears not to care about the challenges of racial barriers that cause such unequal outcomes in employment, housing and health.

OBV’s billboard poster seemed to be a collision between this experience of the anti-racist struggle and a slick ad-man. I was troubled; why should so many people see ‘racism’ in the campaign where I saw none? Surely the poster would only be racist if the thug in the image represented white people in general? To me he represented only the sort of hardcore racist who hated both my African mother and my English father for being with her. The sort of racist that hated England too. I asked myself who, in their right minds, could feel any affinity with such a vile character?

True, there were only two people in the image, one white person and one person of colour, but this wasn’t black versus white, it was BAME versus hate and prejudice. There was no earthly reason why the fascist’s skin colour should be an insult to non-fascists who only share the same ‘race’.

Throughout my life I’ve heard people of colour being accused of having a chip on their shoulder, and I’ve been accused of the same. We are routinely stereotyped for seeking out imagined racism, of being overly-sensitive and failing to understand the nuances behind something negative towards black or Asian people. Yet the deluge of anger unleashed by OBV’s campaign led me to conclude that the poster’s critics were doing exactly what BAME people have long stood accused of.

Some cried ‘if the poster showed a black/Muslim thug pointing angrily at an old white granny there would be uproar’. These are clearly people oblivious to the negative portrayal of BAME people daily amid no uproar whatsoever. Occasionally a big household brand might end up in the news for peddling racial stereotypes but mostly it goes unremarked but not unnoticed by those impacted by racism.

If racism is power plus prejudice why were so many consumed by the belief that the poster was racist? Why this overwhelming feeling that white people are being treated unfairly? After all, every study of privilege shows that power rests firmly with white people.

Part of the answer can be found in the impact of changing demographics, as illustrated by the BBC documentary this week The Last Whites of the East End which explored white working class feelings that BAME families are taking over and that traditional white English culture was being erased.

The Cockneys fleeing to Essex to ‘be with their own’ fail to comprehend that it is they themselves who are accelerating Newham’s BAME proportion through their white flight. It is a flight sparked by alarm that their ideal balance between white and colour is out of kilter, so they move and thereby accelerate segregation. White British are still the largest single ethnic group in Newham but they don’t see it that way because everyone else – Somalians and Pakistanis, Turks and Nigerians – are lumped together in one homogenous ‘other’ no matter how different their culture is from one another.

The shifting plates of race, population change and migration are building fault lines of tension that manifest in tremors of fear about white people being under attack, of being strangers in their own country. This growing sensitivity can be seen in the reaction to OBV’s poster (‘look, they’re treating us unfairly’) or Britain’s Got Talent’s Alesha Dixon called a black group “sexy chocolate men” (‘if I said that it would be racist, so surely she’s racist too’).

Nigel Farage and hundreds of Twitterers who objected to the poster don’t identify with the fascist in the image but they do feel sensitive to accusations that white people are being discriminated against – despite all the evidence to the contrary – and want to stand up for white people’s feelings, integrity and rights. They felt slighted by the juxtaposition of the white thug and serene Asian granny and mistakenly see it is an attack on them when it wasn’t really about them at all.

Where once it mattered not whether white people were portrayed positively or negatively, because white was the colourless default, now the white colour is racialised simply by proximity to someone of a different colour on the other end of a children’s swing.

As commentators and academics grapple with what integration means in a changing nation where BAME-majority cities are just years away, and white families with money flee to less diverse pastures leaving behind an increasingly threatened white working class, the demand for equal treatment for white people will inevitably grow. After decades of unfair discrimination against people of colour where politicians have failed to act, they are finally standing up for the feelings of a minority. A white minority, if not in proportionality then in certainly in mentality.

OBV’s poster aimed to draw attention to the cause of BAME voter participation. Instead it stirred something deep in the British psyche, a feeling that in a multicultural society disrespect of whiteness is a sign that white privilege is under assault. Was the poster racist? No, but it did inadvertently touch a nerve.

Lester Holloway previously worked for Operation Black Vote, and was Editor of the African and Caribbean newspaper New Nation. He is writing in a personal capacity and tweets at @brolezholloway

Lester Holloway is a Liberal Democrat councillor in Sutton and an executive member of the Ethnic Minority Liberal Democrats. He tweets @brolezholloway