Katie Evans, Head of Policy and Research, Money and Mental Health
Fintech for mental health - the next big thing, or just buzzword bingo?
In Money and Mental Health’s first year, one theme has loomed large through hundreds of conversations we’ve had with people with lived experience of mental health problems: how much harder it is to manage your money in a period of poor mental health.
“When I am not well, I ignore mail and so problems and debts mount up; even if I open a bill and read the line ‘if you are having difficulty paying, you must contact us immediately’, it feels too hard so it goes on a pile of things to be done…”
It’s relatively easy to see how being worried about arrears can lead to feelings of shame, embarrassment, and potentially mental health problems. But the other side of the circle – how experiencing a mental health problem can make the day-to-day tasks of financial management harder, from remembering when bills are due, to contacting creditors, resisting impulses to spend and finding motivation to switch providers – has been less explored. It was certainly something I hadn’t really considered in that much depth before starting my job here last summer.
Mental health and financial capability
In Seeing through the fog, published in January, we set out for the first time exactly how experiencing different mental health conditions might affect a person’s ability to manage their own finances. And today, in our new report, Fintech for good, we set out how new financial technologies – tools, settings and processes made possible by technological innovation, could help people with mental health problems to overcome some of these difficulties. We map out all the ways in which we think fintech tools could help, focusing on five key areas:
- Day to day money management – mental health problems can make setting up a budget and sticking to it harder. These tools would help people keep track of their spending, give prompts to take particular actions and give space to think about purchases – particularly to help mitigate some of the crisis spending we identified in In Control.
- High-control products – for some people, setting tramlines and sending ‘nudge’ messages isn’t going to be enough to help them avoid problems during periods of poor mental health. Some people might find it helpful to be able to block certain card features – for example, to prevent themselves spending online or gambling at all.
- Checking understanding online – 59% of the 5,500 people with mental health problems we spoke to in spring 2016 told us they had taken out credit during a period of poor mental health, when they would not otherwise have done so. More and more people are taking out credit online, where it’s harder to check understanding and provide additional support if needed, and this can be particularly problematic for people experiencing mental health problems. We need to work out what the signs of someone struggling to understand online might be, and how best to support them to make an informed choice.
- Support from friends and family – many people experiencing a mental health problem rely on a carer for support with financial management, but at the moment they often use risky workarounds like sharing PIN numbers and online passwords to make this possible. We need to find secure ways to allow people to share financial information and decision-making with a trusted friend, to keep both people experiencing mental health problems and those who care for them safe.
- Spotting the problem early – Often people with mental health problems tell us “this has been affecting my finances for years, but until you started talking about it I never realised that my mental health was the cause”. Financial services providers could use the vast volumes of information they hold about our behaviour to spot things which are out of character or might be early signs of financial difficulty, and step in early to offer tailored support.
“If there was an alert, to notify me when my spending was becoming erratic, I would think twice.”
Are we nearly there yet?
In most of these cases, our research suggests that it’s already possible to build these tools, settings or processes (the sole exception is checking understanding online). Yet none are being routinely offered to consumers. We’ve spotted some pockets of good practice already, and had some fantastic conversations with financial service providers large and small over the last year. But it’s time to up the ante.
For too long, conversations about fintech and about financial inclusion have been too detached from real life. Fintech offers an amazing opportunity to transform – and possibly even save – the lives of people struggling to manage money while experiencing a mental health problem, or battling problem debt. But it needs a push to get there – or there’s a risk that fintech will end up improving the finances of those who already get a good deal, who have money to save or invest or the nous to switch providers, while those who struggle to engage with financial services fall further behind. In short, fintech needs to close the divide, not make it even wider.
To make sure the people who need these new tools can get them, we need the UK’s biggest banks to be adopting these fintech innovations and making them routinely available to all their customers. And we need challenger banks and fintech specialists to keep finding opportunities, exploring possibilities and pushing things forwards. Together, we can make sure the UK isn’t just a world leader in fintech, but a world leader in fintech-for-good, which really works for consumers and improves lives.