Exploring Open Banking with better health in mind

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.

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.

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.