For many struggling with debt, accessing and understanding their financial data is one of the greatest barriers to financial recovery: how can you plan to be better with your money if you don’t understand what’s going wrong in the first place?
Traditionally, the process of starting this journey to debt remediation can be a long and stressful one. But for Big Issue Invest investee Advice Direct Scotland (ADS), the solution to that problem comes in the form of a new tool that gives its clients total, transparent access to their complete financial history in a matter of minutes, rather than months.
A pilot scheme of the new tool, which will run out of Advice Direct Scotland’s Glasgow office, will give people with debt concerns access to a version of Castlight Financial’s affordability tool, called The Big View.
Using open banking technology, the tool gives users a 360-degree view of their finances, and for clients of ADS who choose to ask for debt and budgeting support, advisers will now be able to offer them access to this affordability tool.
The tool will categorise the user’s transactions into over 150 categories of income, debt, discretionary and non-discretionary spending. The transactional data is then automatically merged with credit performance data to create a report on the extent of the debt issues, precisely how they have arisen and what and when the client can afford to pay the debt back.
The Big View shortens a process that can normally take months, with those in debt enduring stress and further debt while waiting to be be referred through traditional debt specialists. The Big View works in just minutes, giving clients immediate remediation to debt problems.
The Big View can also track back through historical transactional data, and allows an individual to demonstrate changed behaviour. For example, a client may have defaulted on their rent for two consecutive months in the previous year, but the process will show that they have caught up and paid on time and in full ever since. If debt is an ongoing problem for a client, the tool will also be able to identify patterns of complex financial behaviour which need to be addressed.
John Montague, managing director of group operations at The Big Issue, said: “We are pleased to be working in partnership with Castlight Financial and Advice Direct Scotland, to be able to deliver to consumers an accurate and fast assessment which will provide them with a full picture of indebtedness. 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.”
Most importantly, the financial data remains under ownership of the client, rather than being handed off to credit reference agencies who will then share the data wider.
Andrew Bartlett of Advice Direct Scotland said: “We firmly believe that data belongs to the individual and this new tool is an excellent example of this approach. It fits perfectly with our vision of a landscape where the individual owns their data and is able to utilise it with whom they want, when they want.”
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