Mental, physical, and financial health are deeply connected. We wanted to find out if available apps are helpful to residents of Lambeth and Southwark, especially those with health problems. This is one of the few studies on Open Banking conducted with people on low incomes.
Impact on Urban Health
How our finances affect our health
At Impact on Urban Health, we know that mental, physical, and financial health are deeply connected. The stress of managing bills and debts takes a toll, and can cause poor sleep and anxiety, which can lead to depression and hypertension.
According to the Money Advice Trust, around 20% of UK adults are behind on one or more household bills. This figure is much higher, at 45%, for households that received means-tested benefit.
Post-pandemic economic challenges meant consumer debt escalated in 2022. Research shows that more than 1 in 6 people who need money management advice cannot get the help they need.
Any rise in the cost-of-living has the most impact on those with the least. Where we work in South London, this includes people living on low incomes who are at risk of long-term health conditions, and who are often from Black and ethnically minoritised communities.
We believe that financial inclusion – the availability and equality of opportunity to access financial services – can help to build better financial resilience resulting in better health.
We want to find out whether services are meeting people’s needs and encourage financial service providers to improve support for customers vulnerable to high inflation.
I would love tools that help us be savvy about the [financial] systems. Like insider knowledge and financial literacy those experts on YouTube share. It just feels so daunting trying to understand on my own and life is too time consuming to focus on learning as much as I need to.
Research Participant 1
Research into how Open Banking can help build better financial health
Open Banking lets people share financial data such as their current account and credit card data with other companies. This has led to the development of new apps that can help people manage their money.
In Lambeth and Southwark, the people vulnerable to the rising cost of living are often underserved by financial services. We wanted to find out if available apps are helpful to residents, especially those with health problems.
We worked with COMUZI to investigate with advice from financial inclusion consultant Bailey Kursar. The research was co-designed with organisations that understand local needs, the Stockwell Partnership, Rooted Finance, and Shelter London.
People don’t consider, with benefits, that when you have a health problem it costs more, and it penalises people. It doesn’t make sense for these products to be more expensive... Why should I be punished all over again?
Research Participant 8
The first phase of the research sought to gain a deeper understanding of the financial issues residents face. This included money management, housing standards, maximising income, debt management and savings.
In the second phase, a group of residents tested several apps, and kept a diary of their experiences as part of the study. Participants tested Snoop, Money Dashboard, Plum, Lightning Reach, Credit Ladder and Nous.
Key findings
Generally, there was low awareness of Open Banking apps from our research participants. The apps that participants found most useful helped them check their spending patterns and identify potential savings, leading to positive changes in habits.
I really like the weekly spending summary because it helps me realise that I'm actually doing a lot better than I think.
Ellie
On the downside, we found that extra information and updates led to increased feelings of anxiety in some users. Participants also had some concerns about sharing their financial data. This is a sign that app makers should consider how they can better communicate what they do with user data.
Some participants had technical challenges linking to relevant apps and services. For example – some apps did not link to PayPal, which was widely used by our participants.
This was part of a wider sentiment that the apps were too generalist for our user group. Participants felt there was a lack of specialist insight into the circumstances of people on low incomes with health problems or neurodiversity.
Recommendations for a path to better support
There is no one solution to solving the problems people on low incomes face in building financial resilience. Historic, structural inequalities, combined with the rising cost of living have created a very challenging financial landscape for the communities we work with.
People who are struggling to deal with the sharp rise in the cost of living need urgent help. In the longer term, helping people build financial resilience is a step towards greater financial inclusion, and a platform for better health. However, for Open Banking to promote financial inclusion, the financial services sector must commit to supporting marginalised and vulnerable customers.
This is one of the few studies on Open Banking conducted with people on low incomes. We hope that the financial services sector will continue to investigate and look at how to make their own platforms more inclusive. To do this holistically, service providers should consider partnering with apps focused on social impact, as well as supporting sector growth through seed funding.
Helping people to build financial resilience, and better health is a complex task. It is only through a deeper understanding of the issues at hand and working together that we can hope to achieve better financial inclusion for all.
I would like a little bit more transparency about how much they actually see and how much that data is used and what kind of systems it goes into to track what I'm up to.
