What can banks do for mental health?
A mental health charity probably isn’t the first place you’d look for an insight into the benefits of financial technology. But 12m adults across the UK experience a mental health problem at any given time, and they are three times as likely to end up with problematic debts.
Mental health problems make earning money much harder
Mental health problems don’t just alter our emotions. They also affect our psychological and cognitive functioning, by hindering our ability to concentrate, shortening our attention span and making it hard to assess financial decisions. This means people make errors with long-term products like pensions, and in getting a good deal on their broadband or energy supply. Given that people experiencing mental health problems are less likely to be in work, that’s often an additional expense which causes real difficulty.
Impulsive behaviour is also a common symptom of poor mental health, and it
can make it harder for people to control their outgoings.
This can range from dramatic spending sprees when someone is in the manic phase of bipolar disorder, to smaller, but more frequent purchases of little treats when a person is experiencing depression. Short-term memory issues are a common consequence of mental health problems, and the medication sometimes used to treat them, meaning remembering when bills are due can be difficult.
Then add in the fact that mental health problems affect our motivation, and you have a recipe for serious trouble. Managing money is a challenge or a chore for most of us at the best of times. But if you are struggling to get out of the house, to complete basic tasks like brushing your teeth, and if you’ve lost interest even in enjoyable things like sex or food, the laborious task of managing your money often just falls by the wayside.
“Impulsive behaviour is a common symptom of poor mental health and it can make it harder for people to control their outgoings”
A cycle of despair
All too often, this leads to serious problems. Calls from creditors, bailiffs knocking on the door and the constant struggle to make ends meet can be exhausting, exacerbating or even causing mental health problems—which then make it harder to cope, and to find help.
And so often, something simple could have prevented the problem in the first place. Automated switching services could save people who struggle to compare options hundreds of pounds a year. Allowing people to block certain types of transaction—for example gambling—on their debit and credit cards could help them to manage impulsivity. Reminders of when bills are due could help people experiencing memory problems. Ring-fencing money for bills could help people make sure that even if they’re too unwell to engage, their finances stay on track.
Busting open the banks
Some new financial services providers are already seeing the potential in financial technology. But, to make a big difference, we need these tools to be offered by mainstream banks, not just fintech startups. It’s currently hard to spot the early signs that someone might need help with financial management. But with masses of data in their coffers, banks could offer the answer to that one too.
A mass market revolution
Half of us will experience a mental health problem at some point. But many of these tools wouldn’t just benefit people who are unwell—lots of us would appreciate technology which makes financial management easier. And, given that many people who are experiencing mental health problems won’t want to tell their bank about it, the best way to have the biggest impact is to make them freely available to all.
It isn’t often that banks can say they get a chance to improve the health of their customers, and potentially save lives—and without taking their eye off the bottom line. We hope they see it as an investment worth making.
Banking on Change is a publication which examines how we can develop a comprehensive policy approach towards financial inclusion. The report features contributions from the likes of John Glen MP, Peter Dowd MP, Anne Pieckielon, Chris Pond and Guy Opperman MP.
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