FFREES. THE UNBANK. FFREES IS A NEW TYPE OF DIGITAL CURRENT ACCOUNT FOR EVERYONE, HELPING PEOPLE TO SAVE UP, PAY THEIR BILLS AND AVOID DEBT.

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1 FFREES. THE UNBANK. FFREES IS A NEW TYPE OF DIGITAL CURRENT ACCOUNT FOR EVERYONE, HELPING PEOPLE TO SAVE UP, PAY THEIR BILLS AND AVOID DEBT. CONTACT: Lucy Gratton or Peter Simpson at info@frees.co.uk or SAVING UP, NOT GETTING INTO DEBT Ffrees is unique in being a current account that has built its business model around helping people to help themselves by saving up, managing their money and paying their bills. Using Jam Jars (sub accounts to ring fence money to pay bills), plus saving pots in the account and stored-up cashback, Ffrees helps people to reserve cash, save up and pay bills. This is the Ffrees model. And as Ffrees does not lend money, customers are not required to go through laborious credit checks, so anyone can easily get an account after a simple online identity check Conversely, the traditional banking business model for free-if-in-credit current accounts is dependent on selling unsecured credit such as overdrafts (with the associated fees, interest and penalty charges), and high interest credit cards, as well packaged accounts with services people may not use. This model appears both adversarial and old-fashioned. Our mission at Ffrees is to ffree people from the grip of the banking model and to lead the revolution in "UNbanking Britain" WHY UNBANK BRITAIN? Type "I hate banks" into Google and you get 41.5m results. Nearly one result for every UK adult! Ffrees is not a bank, it is an UNbank. There is no selection process, everyone pays the same rate, fees are transparent, it is easy, modern and digital, and it helps

2 people to help themselves by saving up and budgeting for bills instead of heading further into debt. The UK statistics for household debt (recently published by the Money Charity) showed that unsecured debt had increased by per UK citizen in the past 12 months, with 2,314 per household in credit card debt (which would take 25 years and 4 months to clear on minimum repayments). The CFSJ reports that 8.8m households have problem debt, 41% of people have zero savings, and 13m have insufficient savings to last more than a month without income. And yet the banking model is continuing to drive people towards expensive debt, and making the problem worse. Our model is not predicated around debt. We think that it is possible to have a current account model that does not rely on debt and penalty fees and that a modern, ethical and democratic Ffrees can help change the nature of banking forever and UNbank Britain. THE FFREES ACCOUNT Ffrees is a current account which runs under the electronic money rules. It offers a debit card, sort code and account number, electronic payments in and out, standing orders and statements. Direct debits are being added with target delivery in Q On top of this Ffrees has its Jam Jars to reserve and save up funds for payments, and it offers a money manager, a unique 1-a-day saving scheme, and other tools that help people to help themselves. REGULATION & COMPLIANCE: KEEPING CUSTOMER MONIES SAFE AFTER FINTECH While Ffrees offers an alternative to traditional banking services, it is not a bank and so does not fall within the FCA/PRA direct regulatory regime in respect of its current account. Ffrees current account and Visa debit card are both provided by Contis Financial Services, which is regulated as an e-money provider and the Ffrees Account falls within its FCA regime. The monies relating to customer accounts do not pass through Ffrees and are safe from its operational liabilities. The monies are held by RBS in a single Contis account, protected from Contis liabilities and under a deed of trust. Ffrees is also adding a further regulated BIN sponsor to its roster of regulated e- money providers, working in conjunction with MasterCard. Ffrees is not directly

3 regulated in connection with e-money, but complies with e-money and Visa/MasterCard rules for operation of their programmes. FINTECH, TECHNOLOGY, SECURITY Ffrees has a pretty cool vision and stance as a challenger to the banks, but that relies on the Ffrees technology platform built entirely in-house. This is the Ffrees IP. It sits between customers and the banking and payments infrastructure; allowing the company to cherry-pick the services and providers that are required to deliver the UNbanking experience. The company has high level data and other security measures in keeping with the levels required by the industry. Making money, fairly (aka "Profit with Purpose") With the launch of the September product Ffrees allows users to choose how they want to pay for their service, either on a Zero account where there is no monthly fee but where transaction charges apply, or a selection of monthly fee options up to 10, with decreasing transaction charges accordingly. This allows a customer to know in advance the cost of their account. This represents the core 95% of Ffrees income with the remaining 5% coming from marketing contributions. PEOPLE ARE USING FFREES To date Ffrees has opened over 60,000 accounts and has had throughput of over 100m with 1m of annualised revenues. It is now gearing up to accelerate growth to 150k customers in the next 18 months. Ffrees is disrupting the banking current account model by targeting the 24m UK consumers who are 78% of UK population earning average to below average income (Source: ONS). Of these, there is a high level of dissatisfaction with the banks among the underbanked in particular. Ffrees has a mission to reinvent the core current account segment of the banking sector. This sector is owned largely by banks, with over 90% share; of which 77% is held by the Big 4 UK retail banks (Competition & Markets Authority, Personal Current Accounts, July 2014). The rest of the market is held by building societies, smaller banks and credit unions. The same report estimates that there are 80m current accounts in the UK, of which 65m are active, generating 8.1bn of revenue from over 1 trillion of throughput.

4 THE "UNDERBANKED" In truth most of us are underbanked! By that we also include those of us who feel underserved, over-charged and generally pretty underwhelmed. The mass market of people (those on average to below average income being 77.8% of UK population according to ONS) do not put enough money into their accounts each month for the bank model of interest mark-up to be viable. Hence these customers (that is most of us) are generally experiencing poor levels of engagement and service. The low profitability of this sector also means that investment in better and more modern products and service for this segment is likely to remain a low priority for the banks. CHALLENGING THE BANKS This is the area of competition for Ffrees where there are some small players active already but where no-one has specifically grasped the marketing throttle with a clear and well-articulated positioning. That opportunity remains absolutely virgin today. The main challenger banks, with full banking licences, are mainly new digital challengers focused on lending and smart new interfaces with clever tools and easy applications. These are highly tuned towards the traditional model of attracting wealthier customers or serving up attractive unsecured credit to the mass market. COST OF CURRENT ACCOUNTS The actual costs of using bank accounts are hard to tabulate. This lack of transparency has worked well for the banks in shielding their Free if in credit accounts from consumer scrutiny. For Free-if-in-credit accounts, the cost can range from nothing to many hundreds of pounds per annum depending on individual discipline. It is no secret that the banks rely on customer indiscipline to make these accounts profitable. According to Bangor University research, published by The Friends Provident Foundation, the annual actual costs vary, with customers having high deposits or high overdrafts paying most. The banks themselves are also currently being investigated by the Competition and Markets authority over the level of fees and charges. ETHICAL AND DEMOCRATIC

5 Ffrees allows online sign-up to and access to banking services that have been either spurned by customers due to complexity, cost or trust issues, or which have simply not been made available to them. Additionally, Ffrees differentiated business model which drives a focus onto saving rather than borrowing, is already engendering wholesale financial inclusion right across the social spectrum, on a commercially sustainable massmarket scale. This has helped Ffrees to position itself as one of the UK s most ethical current account providers, and has won widespread media and political comment and support, including a recent mention in a House of Commons debate. AWARDS & RECOGNITION Ffrees has gained recognition with a number of awards and nominations in the past 18 months, including PrePaid 365 Best Basic Bank Account (Silver) and Best Prepaid Card (Gold), Best Prepaid Product of The Year (Card and Payments Awards) and Best Non-Bank Competitor Retail Banker nominee. ABOUT FFREES Ffrees is based in Sheffield and has over 30 people creating the new UNbank. We are a privately owned company, Ffrees Family Finance Ltd., with funding from management, private and company investors. Our Management Team is: ALEX LETTS: FOUNDER & CHIEF UNBANKING OFFICER Alex was trained at the world s largest ad agency and founded the SMI Group, which became the largest B2B agency in Europe. Publicis bought SMI in 1997 and Alex served 3 years as International CEO of Publicis Technology. He was Chairman & CEO of RI3K Ltd, the e-commerce trading service for the London & Lloyd s insurance market, which was sold to the Qatar Financial Centre in He founded Ffrees in late 2011 with Stephen Woodford. Between them, Stephen and Alex have invested nearly 500k in Ffrees. They believe they can UNbank Britain! STEPHEN WOODFORD: FOUNDER & EXECUTIVE DIRECTOR

6 Stephen has been involved in Ffrees for every minute of its existence. His career has been in the advertising industry, where he rose to Chairman & CEO of DDB, Adam & Eve as well as holding CEO positions at The Engine Group and WCRS. He is UK Executive Chairman of the agency group Lexis. Stephen brings insight to the company in its highly innovative marketing activity. NIGEL MEDHURST: CFO Nigel is a qualified chartered accountant. He trained with KPMG and is an experienced CFO for venture-funded companies, including Dr Foster. Nigel has M&A, IPO and other fundraising experience having been a Director of Corporate Finance at HSBC. Nigel does much more than just the numbers at Ffrees, and leads commercial negotiations and investment strategy as well as being the yin to Alex s yang. PETER SIMPSON: COMMERCIAL DIRECTOR Peter helped to develop direct banking with the launch of First Direct where he was Commercial Director for 13 years. Peter s knowledge of banking products and how they should really be delivered has provided the backbone to our service and product set. His love for great ideas and how they can capture consumer interest and affection has been crucial, not only to First Direct, but now to Ffrees as it UNbanks the UK. PAUL NEALE: CIO, DIRECTOR OF OPERATIONS Paul is an experienced technology professional who played a key role in the senior management team that drove the growth of PlusNet (a Sheffield-based internet service provider) from 6m turnover in 1999 to an eventual 67m acquisition by BT in January Paul is the master of detail and is the engine of the company. He is supported by our Head of Production, Farhan Zaki, who was a senior engineer at PlusNet and who, like Paul, is a petrol head.