Financial Wellbeing: A Time Travelers View from 2025
Written by Louis Sutton & Celin Phoen
Jumping Back in Time to 2020…
2020 was the start of the money and financial health revolution
Financial services firms and fintechs alike started to tackle the mental health challenges their customers faced. In 2019, those with mental health difficulties were 350% more likely to be in ‘problem debt’ and only 43% of those with mental health difficulties were in paid employment.
Although 2020 saw some budding examples of features that looked to improve financial health challenges, most experts agreed the dial was yet to be moved.
2020: The State of Play
- Toucan the money & mental health fintech was sending users and their allies timely nudges related to their alerts that users have specified themselves to encourage healthy conversations on spending habits. They have just completed their very successful pilot with 15 users and are looking to launch on a bigger scale. Link here.
- Tully was helping customers in debt build realistic financial plans and negotiating 30 days of ‘breathing room’ for customers who were unable to make payments. Link here.
- ‘Get Money Calm’ by Moneysupermarket were focusing on giving customers increased visibility of their credit score, and giving actionable insight on how improvements could be made. Real disruptors in a historically opaque industry!
Larger incumbents were also kicking off their financial wellbeing propositions & campaigns...
- Barclays had a dedicated section on its website for all things mental health. A game changer? No. a step in the right direction? For sure.
- Lloyds launched their ‘m’ word campaign to raise awareness of the taboo surrounding talking about money.
- Natwest kicked off ‘Community Banking’ - whereby their bankers will meet you at your community - be it your local coffee shop or even in the comfort of your home!
- The FCA was paying attention - having released guidelines for fair treatment of vulnerable customers to ensure that these traditionally marginalised groups were given the right attention by their banks.
The View From 2025:
It’s currently 2025 - Financial wellbeing is the hot topic in fintech and the set of services available to customers has exploded. Banks and fintechs now identify vulnerable customers with ease and set them on the journey to a positive financial position.
- The Payday Revolution: Wagestream, the Jeff Bezos backed fintech that allows employees to withdraw their salary daily has taken off, being used by the majority of employers in the UK. Employees are now paid whenever they’d like, alleviating the stress of needing to make it to payday. The payday lenders have since gone bankrupt.
- Predicted Analytics: Fintechs and banks are leveraging advanced data & analytics to be able to spot concerning spending habits before they become serious, and provide customers with targeted and actionable insight on how to get back on track. Problem debt levels are at an all time low.
- Sustainable Investment: People aren't just thinking about their own wellbeing, and are ensuring their financial investments lead to 'planetary wellbeing'. Sustainable investment apps like Tickr boomed and pension providers invest in ESG as a default.
- Future Thinking Credit Score: Poor credit scores used to be a major form of stress for those in financial difficulty on the route to recovery. No longer! Sophisticated scoring mechanisms and predictive analytics result in our new ‘Future Score’, which reward those on a positive trajectory, encouraging people to take the first step towards getting back on track.
- Government Intervention: The Cabinet Minister for Money & Mental Health is cracking down hard on banks and insurance firms that aren’t taking their customers mental health seriously. Free financial advice is now a human right under UK law.
- Financial education: The British curriculum is packed full of financial health tips, helping children understand how to avoid problem debt & manage their finances from a young age. Schools will teach students the importance of saving and even help them open their own ISAs!
An afterword from Celin & Louis
Celin and I hope you've enjoyed this read!
We're incredibly keen to shed light on any current day features you think we've missed that will help drive the financial wellbeing revolution!
Equally, we're keen to hear of other exciting innovations you think are likely to happen in this space!
All views are our own
Executive Management Consultant @ Capco | Banking, Operations, Regulatory Change, Programme Delivery Excellence, Portfolio Management
4 年A great little read, it made me smile! Duty of care will become a dominant theme for FS providers now and in the years to come. Levels of consumer debt continue to increase, despite the additional controls. This points to a behavioural challenge rather than a process issue. The solutions need to be rooted in understanding a customer’s real events and true circumstances, together with education, support and servicing experiences that are tailored to the duty of care needed for each individual.
Experience Transformation | Digital CX | Certified Product Owner
4 年Great article Louis Sutton & Celin P.! Love the optimism and do hope fin techs, incumbents and govs get cracking on some of those opportunities. Mental, physical and financial well-being are interlinked. Using tech to address or completely deflect some of today’s societal “problems” would certainly be #AIwithPurpose & #ai4good
Data Analyst | BSc Biochemistry
4 年I think a lot of it is around education. All the tech we need is there
Driving Customer Centred Change: Managing Director at Accenture
4 年Education isnt just for children Louis.....?? our recent research with Imperial College?showed that even people as old as the Milenial population appreciated information over advice - and that simple actions like sharing content and encouraging self research encouraged better financial decision making...??? Education is a generational need - maybe we can get to that in 2025 also :)