Banking for mental health
During a product strategy workshop some years ago, my team and I were looking at ideas to extend our digital banking roadmap.
One of my brightest digital strategists, Kam Chana, suggested that we should add features to support people with mental health issues. I have to admit, at the time we had no stats/numbers as to how big a need this was, and we had few ideas as to features to support this “niche”.
Given the rise in the awareness of mental health issues, I decided to take a closer look and found there is now an abundance of information out there.
In the UK, one in four of us have experienced mental health issues, which makes for quite a large segment of the population and maybe something not so “niche”.
93% of those with mental health issues spend more money when they are unwell, which exacerbates the problem for those whose issues are led by financial worries.
Symptoms of mental health issues can be impulsivity, memory problems and having difficulty planning ahead, which can lead to challenges around financial planning/budgeting and overspending, especially online.
Some steps are being made to help those with poor mental health, for example:
- Shopper Stopper – Plexus and Money & Mental Health (an organisation focused on helping those with poor mental health) have trialled an app that allows users to set times they can block online shopping or their payment card and set limits on how much they can spend online.
- Gamstop – This is a free online service to prevent users from gambling online, which some banks like Monzo have incorporated into their offering.
- Resources – Lloyds Bank and Headspace partnered to offer customers free access to videos and meditation techniques to help customers manage stress and anxiety.
- Planning – Many banks and fintechs offer simple spend analysis and budgeting capabilities.
- Money Carer – This service provides the ability for a customer to allow a carer to help them manage their money. This may be simply providing them access to view statements regularly or allowing the carer to approve spending (similar to the way corporate accounts include payment approvals).
So, there are several things banks are doing or testing, but why isn’t there a more comprehensive service specifically targeting those with mental health issues?
Kam has previously worked with a number of banks and says generally the biggest pushback from banks is that priority is given to initiatives that drive profit. Ironically, even though the cost of supporting such a service is much lower when delivered digitally, it may actually be more feasible for traditional banks with branches.
Let me explain why. In my early days of working with Lloyds Bank I was involved in a project that used data to understand our customer profitability. The results were shocking. 5% of our customers earnt us 85% of our profit! Naively (I was rather young), I said, “Why don’t we just get rid of the other 95% of our customers?”
The answer was simple. Although these customers weren’t profitable, they provided some income to fund the cost of running a large national bank that had branches and call centres. As for the profitable customers, I had imagined that those were the wealthiest, but that was not the case. The majority were simply those that did most of the borrowing and saving with the bank.
For digital banks, they do not have to support a branch network or large call centres, and hence we see more and more neobanks identifying a specific customer base and catering to their needs through a combination of banking and referral revenue from third-party products and services.
This approach is something I have discussed often as “experience-driven banking”. Already we have seen banks catering for the LGBTQ+ community, for entrepreneurs and even for musicians, so why not for those suffering from mental health problems?
For traditional banks, there is clearly more that can be done to help this segment of the population, and central to helping is managing spend safely and helping with financial planning. For neobanks too there is an opportunity to extend current offerings to create a specific bank focused on this segment.
I’m just saying that through better financial planning and safer spend management there is a way to help those with mental health issues. These aren’t “unprofitable” customers, they are customers with real needs which if served well will be profitable too.
Many thanks to Kam Chana for opening my eyes on this topic.
About the author
Dharmesh Mistry has been in banking for 30 years and has been at the forefront of banking technology and innovation. From the very first internet and mobile banking apps to artificial intelligence (AI) and virtual reality (VR).
He has been on both sides of the fence and he’s not afraid to share his opinions.
He is CEO of AskHomey, which focuses on the experience for households, and an investor and mentor in proptech and fintech.
Read all his “I’m just saying” musings here.