Castlight Financial, Big Issue Invest and Advice Direct Scotland launch pilot of fintech debt tool

The pilot scheme, which will run out of the ADS Glasgow office, will give people with debt concerns access to a version of Castlight Financial’s highly sophisticated affordability tool.

The fintech tool, named “The Big View”, uses cutting-edge open banking technology to allow users to get an in-depth, 360-degree view of their finances.

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. If the clients wish, advisers can work with them to review The Big View’s big picture of their finances, interpret the findings and develop solutions.

The technology works via the implementation of an FCA-regulated AISP platform which allows an individual to share their transactional data. Castlight Financial will then be able to categorise the 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 comprehensive 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 can 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.

The Big View report is compiled exclusively for the use of the ADS client and no data is stored, shared or used by any of the parties involved.

John Montague, managing director of group operations at The Big Issue, said: “Big Issue Invest supports the use of this Fintech application as it is entirely focused on empowering the consumer, allowing them a consolidated view of their income and expenditure.”

“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.

“We are encouraged by the initial conversations we have had with forward-thinking financial institutions. It has become clear that there is considerable interest in the deployment of this highly innovative product to indebted consumers. We are enthusiastic about the ways in which the Big View has the power to both enfranchise “generation rent” and help people with a history of debt, to get back on track.”

Phil Grady, CEO of Castlight Financial, said: “Our affordability technologies are fundamentally designed to prevent the distress and sometimes the disaster of unaffordable loans. But built-in to all our affordability products is also a redemptive technology - a robust, number crunching process, powered by sophisticated Artificial Intelligence, that gives people the kind of information that ultimately gives them another chance and a safer financial world.”

Andrew Bartlett of Advice Direct Scotland said: “Our advice centres help more than 300,000 people solve their problems across Scotland every year. Many of these issues have debt and money at their core, so we are delighted to partner with Castlight Financial and Big Issue Invest to introduce a tool which will give our advisers a faster level of insight into a client’s debt and financial behaviours and a transformative ability to provide better, more individually tailored advice and support. 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. We are particularly pleased to be partnering with Big Issue Invest who have been a social investor in Advice Direct Scotland since 2012.”