Banking start-up Fiinu to launch plug-in overdraft, list on LSE
Banking start-up Fiinu is set to be listed on the London Stock Exchange (LSE), before rolling out a first-of-its-kind plug-in overdraft, unbundled from a current account.
The solution, the first such offering since the overdraft was first introduced, will provide access to an overdraft facility without the need to switch banks and current accounts.
Fiinu’s Open Banking-led underwriting models are different to traditional underlying risk-based underwriting principle and methods which enable it to extend its overdraft credit to a substantially wider population than traditional banks.
Following receipt of its banking licence from the Bank of England, Fiinu will be able to promote its new plug-in overdraft as well as provide Financial Services Compensation Scheme-guaranteed deposits in the UK, guaranteed for up to £85,000.
Fiinu is set to be acquired by media company Immedia for approximately £37.5 million, which will see it listed on the LSE for the first time.
Non-executive chair of Immedia, Tim Hipperson, says: “Many people assume that everyone has on overdraft – they do not. This is in the main due to regulatory changes which in effect led to the disappearance of unarranged overdrafts.
“We have looked at and appraised a number of opportunities in the technology and fintech sector and Fiinu stood out when it came to a product in a market with incredibly high barriers to entry and its consumer-focused operating model which improves financial inclusion.
Fiinu says there is “clear demand” for its product, with 62% of UK adults who have a current account using some of overdraft in 2019.
In April 2020, the FCA imposed new overdraft rules which resulted in an estimated 16.5 million adults losing access to a form of overdraft in 2020, resulting in a more than £10 billion funding gap in the £300 billion unsecured lending market.