British people want banks to monitor their spending for signs they are heading into unmanageable debt problems, a new study has found.
Lenders should intervene with text messages or other forms of communication when customers’ finances appear to be out of control, the report by the charity Money and Mental Health Policy Institute found.
In a survey of more than 2,000 people, carried out by polling group Populus, half of respondents said their bank or building society should use their financial data to identify financial problems and offer help. Two-thirds also thought that financial institutions should try to spot financial problems as they develop and offer support when things go wrong.
According to Money and Mental Health, such an approach by banks would particularly help people with mental health problems. Studies show that people suffering from conditions such as anxiety and depression can fall into debt because they fail to open bills or they spend extravagantly to ease low moods.
“About 100,000 people in problem debt attempt suicide each year in England, with many suffering in silence and struggling to ask for help,” the charity’s chief executive, Helen Undy, said.
“Something as simple as a bank checking in with a text message if someone’s data shows a sudden drop in income, or signposting them to extra support, could make all the difference.”
For now, banks remain uncertain about how to use customers’ data to support their financial and mental wellbeing, the report found. That was because lenders often do not have the full picture of a customer’s bank accounts, credit cards, savings and investments.
Open banking technology potentially allows bank websites and apps to view and display a customer’s entire collection of current accounts, savings and credit cards in one place. However consumers have been wary of opting in to such services because of fraud and privacy concerns.
Almost two-thirds of people believe the data sharing enabled by open banking makes them vulnerable to fraud, hacking and identity theft, a survey by professional services group PwC found last year.