Tools to help with 'personal improvement' were the big consumer trend of 2016. Whether it was healthy recipe boxes to overhaul your diet, a Fitbit to force you to exercise or apps to teach you another language on your commute, they were hard to avoid. Industries of all kinds predicted a future where goods and services are not only designed to fit our unique desires, but to help us shape them. In 2017 it looks like that trend is coming to banking, and it's potentially great news for our mental health as well as our wallets.
Financial technology is beginning to disrupt retail banking. Challenger banks based around an app - like Monzo or Atom - are growing. A wide variety of plug-in services are now available (like Money Dashboard or Squirrel) that add budgeting bells and whistles to your current account, helping you to achieve your goals. And, seeing the way the world is going, the big institutions are launching their own tech tools, too.
Most banks now have an app, which doesn’t just allow you to make payments, but keeps a track on your spending and sends out notifications before things go wrong, helping you to avoid fees and charges. Soon, a wave of more exciting personalised settings will be coming to the cards in your wallet.
Barclays now allows customers to set their own cash withdrawal limits on debit cards or restrict their use for online shopping. Capital One sends prompts about recurring payments - like your gym membership or Netflix subscription - to check you’re still using them. There’s a tool - not yet available in the UK - called GoGoNoGo which enables you to turn all your cards off via your smartphone. You can keep them off until you need them, helping to protecting you from fraud. Or you can turn them off when you’re not sure if you lost your wallet or left it at home, saving you the hassle of cancelling cards only to find them a few hours later.
These kind of banking controls are exciting news for all customers; a sort of Fitbit for our money. But they’re especially important for consumers who struggle to stay on top of their finances, and need more support. That includes millions of people with mental health problems, a quarter of whom are in serious financial difficulty at any one time. Having a mental health problem makes you three times more likely to face a debt crisis.
The charity I run, Money and Mental Health, works to break this link between financial problems and mental health conditions. We believe personalised banking tools are a part of the solution, helping people to get through periods of poor mental health without a financial crisis. Last year, we surveyed 5,500 people with mental health problems, and 92 per cent said they spent more when they were unwell. During manic phases of bipolar people can be incredibly impulsive, taking out huge loans or spending thousands over just a few days. Many people with depression and anxiety report spending money to cheer themselves up, or buying gifts for others to make up for being ‘a burden’. We’ve heard from people with PTSD who’ve sought the buzz of gambling and lost far more than they can afford.
Controlled financial products could be invaluable to help people protect themselves. Consumers tell us they’d like a credit card which couldn’t be used for gambling, or online shopping. Some would like notifications of big changes in their spending behaviour, missed bills and bounced direct debits to go to a trusted friend or family member who can step in, and potentially help. Others would like a limit on the amount they can put on their credit card in a day, a week, or a month, as well as their usual credit limit.
Shortly, the Financial Conduct Authority will be hosting a 'tech sprint' to challenge the banks to go even further on their personalisation crusade and start building these kind of tools and settings for consumers. Over two days, fintech developers will knock together prototype tools that could transform lives for consumers with mental health problems, or at risk of getting into debt.
This kind of innovation means the days of vanilla banking should be coming to an end. Bank accounts won’t just be a place to keep money, but more like a personal trainer, encouraging you to do the right thing and meet the goals you’ve set. My hope is that, as well as empowering those at risk to stay in control, this trend will help us all boost our financial well-being, and be happier about our money, however much we have.
Polly Mackenzie is Director of the Money and Mental Health Policy Institute