HPE: Breaking Down Barriers
HPE: Breaking Down Barriers
By James Johns, Director of Corporate Affairs, UK & Ireland
At a time when it is estimated that around half the world’s population—3.2 billion people—is now online, with two billion of these in the developing world, it’s tempting to assume that the day is near when everyone can share in the benefits offered by the Internet. Sadly, things are not quite so straightforward.
Of course these billions of Internet users can all benefit from the easier communications, wider choice of entertainment or access to social media that being online offers. However, for many, even in the developed world, being online is akin to having your nose pressed against the window of a shop you can’t enter.
In some ways the advertising-based or “freemium” business models adopted by popular Internet services offer a universal resource; they place no real financial demands on those who wish to use them. Increasingly however, the most significant benefits of being online also require access to a bank account and a method of electronic payment. Price comparison sites might allow us to find the best deal on our insurance or energy bills, but without the ability to pay online or by direct debit, those benefits may be rendered inaccessible.
As a result, for many people at the lower end of the income scale the dominance of the Internet in today’s business world has widened the digital divide, as they lack the means to pay for goods and services electronically.
In the UK around one in six homes pay for their energy usage via a pre-payment meter that must be fed by coins or a cash payment made at a local store. Consumers who buy their energy this way are seldom able to benefit from the most favorable tariffs, which are restricted to those who pay electronically.
Similarly, it is accepted wisdom that when shopping for a range of products, from food to clothes, the best prices are increasingly only available online. For individuals or families who live in the cash economy there are also other challenges associated with this increasing disempowerment. Living “hand-to-mouth” makes it difficult to budget, not only for unexpected expenditures but even for recurring bills such as rent.
Proposed reforms to the UK’s welfare policy will see claimants paid monthly rather than weekly or fortnightly, in an attempt to make the experience of being on benefits more like that of being in work and to encourage better financial planning. Parallel changes that will see housing benefits paid to the claimants rather than directly to their landlords have met with resistance from lessors in the social housing sector who are concerned that this will raise their financial risk and increase the prospect of tenants going into arrears.
But living in the Idea Economy means we have the ability to enable those who have been stuck outside the shop window to walk through the door to economic opportunity.
The reduced cost to serve associated with electronic banking could lead to a new generation of accounts, allowing those on restricted incomes to share in the benefits that the cashless payment models, so central to the Internet, have brought. Such services could include features that allow users to better manage their budgets, for example, by allowing them to create virtual “jam-jars” into which a portion of their income is set aside for important bills such as rent or utilities.
Whilst some financial institutions are still hesitant to embrace the business case for providing banking services to those on limited incomes, new models are emerging that move the cost burden onto the organizations that benefit from serving this demographic. This could include social landlords such as housing associations, or utilities companies that, at a time of rising domestic energy prices, are under increasing political pressure to do more to enable their customers to access the cheapest tariffs.
Through its new Living Progress Challenge, Hewlett Packard Enterprise wants to hear from individuals or organisations with innovative ideas for how software applications and digital services can help improve people’s lives— such as by helping to address the problem of financial exclusion. You can find out more at www.hpe.com/livingprogresschallenge
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