The Big Issue’s social investment arm, Big Issue Invest, has launched a new financial inclusion tool that uses open banking data to give customers and debt advisors a fairer, better understanding of an individual’s financial position.
The Big View solution is a collaboration with Castlight Financial, and the platform will categorise a customer’s transactions into over 180 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.
John Montague, managing director of group operations at The Big Issue, 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”.
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. But the tool shortens this time to just minutes, giving clients immediate remediation to debt problems.
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.
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.
For customers, the fintech tool will provide transactional data for mitigating the lack of data from a credit perspective, and provides a far richer view of the individuals background and stops the process of conflating a lack of data, with a lack of perceived creditworthy behaviour. For lenders, the tool will perform accurate assessments of the actual amount a customer can pay based on their Income & Expenditure position.
The Big View starts by collecting customer account information through Open Banking API or by use of screen-scrape technologies with the customer providing consent – the transactional data is passed to the Castlight CaaS (‘Categorisation as a Service’) machine learning engine, which transforms these into 180 categories of income and spend.
Commercially, the financial inclusion tool is offered as ‘pay as you go’ with costs based on projected volumes or through a licensed model with a tiered sliding scale based on volume.
The Big View is just one of a number of financial inclusion services and initiatives being developed by The Big Issue Group to help those in need. Others include Lord John Bird’s Creditworthiness Assessment Bill, Big Issue Invest investments into ethical lenders like Fair For You, and The Big Exchange. Up to 35 per cent of revenue being returned to the Big Issue Group from The Big View will go to supporting us in all our work, whether that is providing an opportunity of a hand up to those who want it or support in the investment of over £4,000,000 in the ethical lending sector through Big Issue Invest.
Image: Hekla Goodman