Trezeo gains FCA backing for 'income smoothing' product

Source: Trezeo

Trezeo, the business account providing financial stability for the UKs self-employed (currently invite-only) has just become the first income-smoothing service to receive authorisation from the Financial Conduct Authority (FCA).

Historically, Britain has been a nation of makers, small business owners and entrepreneurs, and the rise of the platform and gig economy has only propelled the growth of the self-employed, particularly among the younger workforce. In fact, the ONS estimates that the number of self-employment workers in the UK has grown exponentially - 50% in the last 10 years - to almost 5 million. This new sector of workers is set to outstrip public sector employment by 2018.

But, while self-employment grows, so does the precarity and instability of income for these workers. In fact, it’s a top concern of the self-employed according to recent research conducted by IPSE. Many are left with no other options when bills come due, or they have an emergency during periods of slow work, other than to take out a costly and unpredictable unarranged overdraft or payday loan.

This is where Trezeo comes in; creating a new financial category to ease the short-term financial volatility of, and in time financially empower, the self-employed.

Trezeo is a business account aimed at the self-employed, providing customers with a regular, defined income. Trezeo’s income smoothing service uses AI and machine learning to turn unpredictable income streams into reliable and regular payments, with no interest or hidden fees involved. They do this by identifying customers’ average income, and when they dip below it one week - whether because work was slow, they were sick or just took a day off - Trezeo tops them up to their average and gets paid back when the customer earns again. They also help customers build savings without having to think about it, as well as access to income advances for emergencies.

Trezeo has now become the first such platform to offer this type of access to credit to the self-employed. Rather than charging costly interest rates or overdrafts, Trezeo charges a single, predictable subscription fee based on a percentage of customer income. The FCA has recently launched a consultation looking into the high cost of credit in the UK, and approval of Trezeo’s innovative business model to provide access to credit demonstrates the desire of the regulator to find solutions that work better for customers.

Garrett Cassidy, Trezeo Co-Founder & CEO, said: “The vast majority of today’s self-employed are working in this way out of choice, but today’s world still isn’t set up for them. Whilst technology is enabling and driving the growth in self-employment, the self-employed are still being ignored by the mainstream financial industry. We’re pleased with our experience working with the Innovation Hub and immensely proud to have been approved by the FCA to provide an innovative new solution to the self-employed, and an entirely new category in the UK financial services sector. The self-employed deserve better access to affordable credit and we look forward to continuing our positive relationship with the regulator to continue to drive innovation in this space.”

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