Financial Inclusion for all
According to the publication Money On Your Mind by the Money and Mental Health Policy Institute (MMHPI) people suffering with poor mental health are at a heightened risk of financial difficulties and vulnerability. The MMHPI presented the following findings:
- 72% of those surveyed said that their mental health problems have made their financial situation worse, and that’s not just because of having less money to spend.
- 93% say they spend more when they are unwell
- 92% find it harder to make financial decisions
- 59% have even taken out a loan that they wouldn’t otherwise have done.
- Of those who have taken out new credit in the last year, more than a third (38%) said that their mental health at the time left them unable to remember what they had been told about the loan.
The British Bankers Association (BBA) has committed to raising the standards across the banking industry by promoting diversity and inclusion, including those relating to mental health.
“It is vital that vulnerable customers are offered the right support. The industry is continually looking at ways to help vulnerable customers, and develop alternatives to make everyday banking arrangements easier, with useful information and suggestions on different types of payments a key part of these developments.” BBC News, 24th January 2017.
The Financial Conduct Authority (FCA) have adopted an approach in support of this. Last year (October 2016), in a report titled ‘Our Future Mission’, they outlined their consumer protection objective as ‘not about ensuring a market where consumers never make poor choices, but about ensuring they have an appropriate degree of protection.’
However, whilst positive, these don’t necessarily present any conclusions or actionable steps to be taken by the industry. It is pertinent for us to examine what the industry is currently doing and what it might be able to do in the future.
The MMHPI are challenging banks to use some systems available to help those with mental health problems. Some examples are:
- The ability to delegate limited permissions to someone else to manage an aspect of your finances, as is available to wealthy individuals.
- Setting spending limits on cards or blocking access to some merchant codes, as is possible on many corporate cards.
- The ability to set communication preferences on an account, which is generally offered to people with visual or hearing impairments.
Banks should be able to adapt their existing functionality quickly, which would provide some immediate solutions for those customers that require additional support.
The MMHPI have also started to think outside of existing functionality by exploring the opportunity from a fintech’s perspective. Their briefing paper titled ‘How fintech can help people with mental health problems’ discusses the link to customer loyalty and suggests that better tools that help strengthen the relationship between banks and their customers would not only benefit people with mental health problems but would provide a better overall customer proposition.
Putting this into practice, in March the MMHPI teamed up with the FCA to bring together some of the UK’s biggest banks and tech start-ups for a two day ‘TechSprint’, with an aim of coming up with new and innovative solutions to support people suffering with mental health problems with managing their money. You can read more about the outcome of the TechSprint and the winning teams on the day here.
There are also interesting technology start-ups out there that are developing solutions to support people with managing their budgeting and spending, for instance Squirrel (https://squirrel.me/), an app controlled bank account that keeps your savings safe, and pays out your bills and spending money to help keep your finances on track. Whilst Squirrel is not solely aimed at those with mental health problems, it is easy to see how it may support individuals with managing their money in line with some of the suggestions made by the MMHPI.
Progression in the industry is not limited to fintechs and start-ups, last month, HSBC unveiled plans to position itself as a ‘dementia friendly bank’ by launching an advice guide for those affected by dementia. According to City A.M, 12 April 2017, the guide will offer tips, such as using chip and signature cards rather than credit and debit ones which require PINs, and is currently being piloted in 10 branches with a view to expand nationwide.
There is a long way to go in Banking to ensure that those customers experiencing challenges due to mental health problems receive a fair and equitable relationship. The MMHPI have provided some interesting thoughts on how banks can begin to support customers suffering with poor mental health and continue to be a Think Tank in which customers can channel their voice and experiences through, which will no doubt add momentum and visibility across the industry.
What is extremely positive in my mind, is that an illness that was once a moot point is now coming into the light and that the Financial Services industry has acknowledged the link between mental health and financial difficulty. The right solutions are still forthcoming, but the future for those suffering with poor mental health is starting to look more supportive.
Author: Stephanie Crane, Consultant