Castlight Financial has announced it will partner with Big Issue Invest (BII) and Advice Direct Scotland (ADS) to launch a financial technology (fintech) tool to support people struggling with debt, by letting them see their personal financial data.

The pilot scheme, will which will be run from the ADS Glasgow office, will provide people with debt worries access to a version of Castlight Financial’s groundbreaking and innovative affordability tool.

Financial difficulties affect thousands of people every year in the UK and can have a devastating effect on an individual – or family’s – quality of life and mental health. Previous studies in the UK show that mental health problems and financial crises tend to coexist, placing an enormous strain on the National Health Service, welfare system and financial sector. According to Citizens Advice, nearly eight out of ten NHS mental health practitioners treating patients for anxiety and depression not that money and debt issues are a problem.

This initiative has the potential not only to support people struggling with financial issues, but eliminate the woes that can accompany them.

The Big View

“The Big View” uses cutting-edge open banking technology that will enable users to get an in-depth view of their finances. The technology itself works through the implementation of a Financial Conduct Authority (FCA) regulated Account Information Service Providers (AISP) platform, allowing individuals to share their transactional financial data. Through this platform, Castlight will then be able to categorise transactions into over 150 categories of income, debt, discretionary and non-discretionary spending.

This data is then automatically merged with credit performance data to create an insightful report into the extent of the debt issues a client is dealing with, how these issues have occurred and then what steps can be taken to remedy the situation.

For clients of ADS who request debt and budgeting support, company financial advisers will now be able to offer them access to this affordability tool, and if the clients so please, advisers can begin to build a picture of their finances and develop solutions to any monetary problems.

Demonstrating Change

As The Big View can track back through historical transaction data, this allows an individual to demonstrate that they have (or haven’t) changed their spending habits and behaviour; providing an opportunity to make that first step toward working their way out of debt. For example, if a client has previously defaulted on rent payments for two consecutive months but has paid on time ever since, the process could highlight this and show that the individual in question has taken steps to improve their budgeting.

Alternatively, of debt is an ongoing problem for a client, the tool will also be able to identify patterns of financial behaviour which require attention.

Empowering Consumers

John Montague, Managing Director of Group Operations at The Big Issue says the company is pleased to be working in partnership with Castlight Financial and ADS, noting that the tool will empower consumers and allow them to take greater control of their finances. He said: “Big Issue Invest supports the use of this fintech application as it is entirely focused on empowering the consumer, allowing them a consolidated view of their income and expenditure.”

Continuing, he said: “The tool will be used to address squeezed, struggling and debt-laden individuals experiencing problems with debt and help put them back on the path to financial health and back to the lives they want to lead.”

Phil Grady, CEO of Castlight Financial says that the company’s affordability technologies are “fundamentally designed to prevent the distress and sometimes the disaster of unaffordable loans.

He added that this groundbreaking initiative harnesses all the capabilities and innovation that Castlight brings to the table: “Built-in to all our affordability products is also a redemptive technology – a robust, number crunching process, powered by sophisticated Artificial Intelligence, that gives people the kind of information that ultimately gives them another chance and a safer financial world.”