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Half of adults think banks should monitor data to spot financial problems

Half of UK adults say their bank or building society should use their financial data to identify potential problems, according to a new report.

The research, from the Money and Mental Health Policy Institute (MMHPI) – established by Martin Lewis in 2016 – discusses how banks and building societies could monitor customer data to spot signs that people are at risk of falling into debt. These could include sudden drops in income, dramatic increases in spending or persistent use of unauthorised overdrafts.

It also outlines ways that financial firms could intervene to offer help in these situations, for example by alerting people via text if they are spending more than usual or directing them to debt advice.

Get our free Mental Health & Debt guide for specific tips and support.

What does MMHPI's research show?

A nationally weighted survey of 2,103 people carried out this August for the report, which is supported by Barclays, shows that:

  • Half of UK adults say their bank or building society should use their financial data to identify potential financial problems and offer help, while only 12% disagree.

  • Two-thirds of people (68%) say it would be useful for their bank or building society to spot financial problems as they develop, and to offer support proactively when things go wrong.

  • About six in 10 (61%) say it would be useful for banks to use their data to help them keep on top of day-to-day money management.

  • Around half of UK adults say they are worried about how banks monitoring their data in these ways would affect their privacy. However, 51% say that the benefits of firms monitoring their data outweigh the risks, compared with one in 10 (11%) who disagree.

What recommendations does the report make?

MMHPI's report makes recommendations on how banks could use personal financial data to support customers in a safe and ethical way. Its suggestions include:

  • To protect privacy, banks should give customers choice and control over how their data is used to identify when they are at risk of falling into debt. It says this should include allowing customers the option to opt out of their data being used, and giving them choice over when and how banks should intervene.
  • Banks should involve customers in coming up with interventions to ensure that they strike the right balance between being effective and non-intrusive.

  • There should be guidance for firms on how they can use customer data without contravening financial or data regulations. 

What does MMHPI say?

Chief executive Helen Undy said: "Barely a week goes by without a news story about how companies are using our personal data, and the impact that's having on our privacy and safety. While these concerns are legitimate, focusing solely on the dangers risks overlooking the enormous opportunity data can present – with the potential to even save lives.

"Around 100,000 people in problem debt attempt suicide each year in England, with many suffering in silence and struggling to ask for help. Something as simple as a bank checking in with a text message if someone's data shows a sudden drop in income, or signposting them to extra support could make all the difference.

"And the good news is that consumers are on board — so long as firms give people control over how their data is used, concerns about privacy do not outweigh the strong appetite for this important work."

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