Banks ask how Brexit will affect customers by David Grier (Chief Technology Officer)

Martin Lewis is stumped. His recent post for on 25 need-to-knows about Brexit saw him a little at sea. On the question of what’s going to happen with mortgage, loans and savings rates, he is holding up his hands. He says, with admirable honesty:

“Mortgage, loans and savings rates could, er, rise or fall. This is a really tricky one.”

Indeed it is. And there’s a general sense that consumers are having to work things out for themselves, reading Brexit commentators and pundits like never before, whilst keeping a careful eye on their expenditure.

However, for the UK’s banks, it’s a different matter. They can’t just suck it and see. They need to able to look at the potential risks in the market of a variety of Brexit scenarios and model how these scenarios would play out across their customer base. It is imperative for them to have a handle on exactly how a rise or fall in mortgage, loans and savings rates might play out – right across their customer base – from the most secure customer to the most fragile.

Financial IQ

Never before has Castlight’s Financial IQ tool, or FIQ Insights, been more invaluable.

FIQ Insights is one of a suite of tools developed by Castlight Financial using Open Banking technology and our categorisation engine CaaS, currently the most powerful of its kind in the UK. Built into the software is not only the functionality for categorisation of income and expenditure but also a capability to track financial behaviours and predict vulnerabilities.

If we add into this the economic forecasting data from our colleagues at Experian – the UK’s leading economic forecasting group – then you have a strong set of data for which to understand you and your customer’s exposure to an economic downturn.
FIQ Insights broadly positions every customer across a bank’s portfolio in one of 5 categories, based on an analysis of their committed, discretionary and essential spending:

1. Secure
2. Comfortable
3. Ticking Over
4. Stretched
5. Distressed

Then, with customers across the portfolio allocated an FIQ spending category, a bank or other lending organisation can model for a range of scenarios . For instance, what if a no-deal Brexit caused a 2% spike in inflation or a 1% rise in interest rates? How would this affect the “stretched” customers? Would it tip them into the “distressed” category? Could it even tip some “ticking over” customers into the “distressed” category. And if so, how many?

Of course, FIQ Insights can do so much more, drilling down into the granular data in portfolios, IQ categories and accounts.

However, for now, with the Brexit deadline looming, it’s the Brexit features that are exciting credit risk experts. I can almost smell the smoke as they fire figures, data, models and Brexit scenarios into FIQ Insights to see how best to protect their customers for both the foreseen and unforeseen.

Not so tricky really Martin Lewis – if you have the right technology!

Achieving acronym status

KYC, AML, API, SaaS, PISP. In our world of financial technology and Open Banking, we pepper our everyday conversations and presentations with acronyms. In fact, our industry is innovating so fast that we are coining words every ‘day, developing a whole new lexicon to describe the latest ideas, tools and services that we are inventing. And then we realise that our new lexicon is too cumbersome. It’s slowing us down and it needs an acronym.

As recently as 2017, when we’re talking about the second Payment Services Directive we would probably go on to explain how the legislation was designed to facilitate Open Banking and allow consumers to give permission to banks and other lenders to access their account data. But now it’s just PSD2. It’s such a common and familiar concept that we ditch the explanation and skip most of the words too.

I was thinking about this. Maybe a concept only truly comes of age when it’s awarded it’s own acronym?

Data Driven Decision Making

That’s why I was delighted to notice recently that DDDM is slipping into blogs and articles. Data Driven Decision Making has achieved acronym status!

And this is important because turning data into information and then information into intelligence is fundamental to driving business growth. We need DDDM to be something obvious, familiar, part of our everyday business currency.

However, there are still many companies and organisations with hugely rich data resources that are not always harnessing them to make creative and profitable business decisions. And their problem is that their competitors are not only implementing data driven decision making – it has become so embedded in their business processes, it’s so much part of what they do every day – that they are using the acronym.

Innovation Hub

We’ve been working over the last few years with a range of banks and other lending organisations who have been passionate about transforming their data into valuable insights using our reporting, analytical, forecasting and predictive tools. And recently we have responded to a groundswell of interest from clients who want to co-create these kind of tools with us. We developed our Innovation hub to facilitate this collaborative approach and the feedback from clients so far has proved they value the opportunity to trial ideas in a safe environment, develop products that will integrate into their existing systems or create something brand new that creates a fix or opens up an opportunity to provide a better or more cost effective service for their customers.

For these clients, data driven decision making is at the very heart of their businesses.

And that is very encouraging. But we want to go a step further. We want our clients to be the kind of businesses that have integrated data driven decision making so deeply into the fabric of their organisation that it achieves acronym status.

We want DDDM to be part of their business’s DNA!


Netflix knows me better than I know myself

Netflix knows me better than I know myself. I’ve no sooner finished Killing Eve when Netflix suggests a Scandi noir I’ve never heard of but looks spot on. How did it know?

We know exactly how of course. Netflix collects vast amounts of data from its 100 plus million users and deploys that data to power a recommendation system that influences 80% of the content we watch on the platform.

Customer Engagement

The data is used to build customer loyalty, drive retention and engage with customers. We feel Netflix is watching out for us, taking our interests into account and anticipating our viewing needs.

We value Netflix’s engagement with us because it’s personal and it’s relevant.

Every business wants insights into their customers’ needs, wants and behaviour. Data is one of the most valuable assets for any business, because it allows businesses to get personal and to get relevant.

The advent of Open Banking last year opened the floodgates for banks to use data to get to know their customers better, anticipate their needs and ensure that the products they bought were affordable and safe.

Customer Insights

And it’s been an exciting year for us at Castlight as more and more banks have used our suite of products to achieve unprecedented amounts of customer insights, so that they can provide a better service for their customers.

But what has also been immensely rewarding is the way in which banks are working with us to develop their own systems to manage and learn from their customers’ data. We are moving beyond an “off the shelf” approach and co-creating systems and solutions. Sometimes we get our customers up and running in under an hour by using the Castlight portal which requires no costly IT integration. But with other customers we collaborate using our Innovation hub, integrating our Application Widget or APIs into a bank’s or other lender’s customer journey creating a unique solution to deliver customer insights and customer engagement.

It’s exciting stuff.

And it’s good to know we’re not alone being excited by what data can achieve. I loved this description of their research team on Netflix’s business site:

“Researchers at Netflix love working in a unique environment enabled by the Netflix Culture that values curiosity, courage with smart risks, innovation, science, rigor, and high impact. Across the company, we strive to run experiments to back our hypotheses up with evidence, which often uncover surprises that redirect or refine our research. We relish the freedom to try new ideas and the opportunity to debate their implications with colleagues spanning all parts and levels of the company, including our own CEO.”

It sounds exactly like the way our Innovation hub works too.



Castlight Financial, the Glasgow-based financial capability company, has further strengthened its management team with the appointment of open banking strategist, Neil Cunningham.

Neil has a strong track record of new product innovation and the creation of transforma-tive business partnerships within the consumer credit and financial services markets. Most recently as Partnerships Director at Equifax UK, Neil was responsible for an ecosys-tem of over 80 third party partners ranging from fintechs to large consultancies across the credit risk lifecycle.

In his new role within Castlight’s open banking strategy team, Neil’s key priorities will be to further develop the company’s network of creative business relationships as well as nurturing “co-creation” initiatives with customers – partnering with them to deliver innova-tive, custom-built solutions for business growth.

Neil says:

“Castlight already has an established track record of innovation and that was very appealing to me. The principle of co-creation drives the company’s relationships with its financial services customers and that is something I’ve advocated strongly throughout my career. Open banking has transformational potential, yet we’ve heard it referred to as a slow burn revolution. It’s not a silver bullet on its own. In my mind the way to accelerate the revolution is to collaborate with the other players in the value chain such as financial institutions, software providers and other fintechs, in order to deliver tangible value to the customer in an intuitive way.”

Phil Grady, Castlight CEO is delighted to be welcoming Neil on board. He says:

“Neil is joining us at an exciting time for our business as our portfolio of affordability solutions is growing at a steady pace and our customer base is expanding. We are confident that Neil’s open banking expertise and extensive experience of partnership working will be of significant value to our customers as we continue to work with them to create, innovate and drive their businesses forwards.”

For further information, please contact Phil Grady, CEO on 07736 950979

Not waving but drowning

Over 8 million people in the UK are unable to pay off debts or household bills according to the National Audit Office’s most recent report. And this worrying statistic has subsequently generated considerable concern and column inches. However, in terms of the problem of financial distress, the millions of people in actual debt are only the tip of the iceberg.

Just this week the FCA published its Financial Lives Survey raising some serious concerns about the number of people in the UK who are not in debt at the moment – but whose finances are so precarious that one minor crisis or unforeseen expenditure could tip them over.

The survey reveals that:

* 3.1 million adults have high-cost loans

* nearly 6 in 10 (57%) of UK adults have no cash savings or savings of less than £5,000

* 7 in 10 (71%) of UK adults have no investments at all

* 31% of adults have no private pension provision

* 44% of UK adults rely or will rely on the state pension for their main source of income in retirement

Push them over the brink into debt

For many of these adults or families the unexpected cost of a boiler breakdown, a car MOT or a funeral would mean taking on more credit to cover the cost and would push them over the brink into debt.

And for some people it’s even more precarious, as a thread on Mumsnet made painfully clear. Responding to a discussion about a statistic that 2 out of 5 people have less than £100 in savings, one respondent said:

“Yep. I am in that statistic. Low paid job and crippling childcare costs. I’ve already had a cry today about my financial situation.”

Desperate times for many people.

So what can we do? We must look deeper than the tip of the iceberg to the people under the water who aren’t waving – but who are drowning.

Create a safer financial world

Our entire business is built on the objective to “create a safer financial world” and one of our key principles is to do this by helping people assess and then control their finances. There are plenty of admirable debt charities doing a tremendous job in the UK, and plenty of lenders looking to support customers too, but in order to help they need information. They need to know exactly what an individual’s income is as well as their essential, committed and discretionary expenditure. And then, armed with this transactional data, they can review arrangements or provide debt advisory support.

Our Affordability Passport uses open banking technology to allow an individual to share their transactional data with lenders or debt advisers, providing them with a real-time profile of their financial position in just a few minutes.

When money is tight or precarious, people need answers and solutions fast to ensure that disaster is averted. And the Affordability Passport allows that journey to be fast and efficient.

At Castlight we often use the image in our branding of a lighthouse casting light into a dark sea. It’s important to us that the light we cast penetrates beneath those icebergs to what lies beneath and helps to rescue the millions of people for whom debt is perilously close.

Give a man a fish

“Give a man a fish and you feed him for a day. Teach him how to fish and you give him an occupation that will feed him for a lifetime.”

 This familiar wisdom is attributed to a Chinese proverb, but it’s also a principle at the heart of many international charities working in the developing world as they empower local people to learn new skills and become self-sufficient.

 And of course, it’s effectively what we do as parents. We nurture our children through education and by example for around 18 years and then we encourage them to fly the nest and go it alone.

 We take exactly the same approach with our clients – although the process is somewhat quicker!

Watch them fly!

Most companies try to hang on to clients for as long as they can. But we do things differently at Castlight. We want them to be able to go solo as soon as possible. We like to nudge them out of the nest and watch them fly!

For us, a successful client relationship is when one of our customers that we have been working closely with for a number of months, doesn’t need us any more.

However, it’s often a bittersweet milestone as we will have spent a lot of time together. We will have co-created systems and solutions, shared ideas and strategies and ultimately built something innovative and uniquely ground-breaking to move their business forward.

 But what we have co-created belongs to the client. It has been uniquely co-crafted for the needs of a single client and designed for self-sufficiency.

Stepping back 

We’ve built in our own obsolescence – once we are confident that everything is working smoothly and that training and support systems are in place, we step back. And our client integrates the new solutions into their business model and runs with it.

We may perhaps hover a little, just to be sure everything is ok. But then, when we see the product or solution we have co-created making a real difference to their business, we let them go.

It’s a whole new customer dynamic in the world of affordability. We are re-shaping the way people do business and our customers tell us they like it. They like the process of co-creation. And they value the environment of trust – the sense that we want to stop the invoices as much as they do.

 However, once a parent, always a parent. Our offspring continue to need us at different stages in life, long after they are 18. And it’s the same with our clients. We hope they will come back to us when they need further support or solutions in the future. And like good parents, we will be there for them.

Use the Castlight brain to stay ahead of the game

The brain makes around 700 new connections each day – every time we do something for the first time or absorb new information, brand new neural pathways are formed. And the more connections we make and continue to use, the more effectively our brain works for us.

At Castlight Financial our data scientists and our customers are making connections between our products all the time. Our developers are making leaps between products, developing syntheses of ideas to create new services to meet the ever changing needs of the financial marketplace. And our clients too, are making connections, moving through one product to another, merging products, asking us to develop new products, bolting on aspects of one product to another.

And as our customers work with our developers and implementation teams, every day we see new connections being made between our customers’ pursuit of excellence and the solutions we can offer. New neural pathways are being formed, our customers’ businesses are being strengthened.

So that’s why I like to use the analogy of Castlight’s product portfolio as a brain – with neural pathways all leading off to different products – but with myriads of connections between them.

Castlight Financial portfolio of digital tools

Digital tools are too often put in a “toolkit” which is a perfectly good analogy for the way digital tools are used in many companies. But for us, I think the toolbox is too static. Once you’ve used a tool you put it back in the box and take another one out. We don’t want our customers to use our tools like that. We believe our customers will benefit if they sometimes use more than one tool at a time, if they adapt the tool as they go along, combine two tools together or get someone to run after them with a new tool that was never even in the box. And we also believe that our tools will make such a difference to our customers’ business that they will never want to put them back in the toolkit.

That’s why using the analogy of a brain to think about Castlight Financial’s portfolio of digital tools works so much better for us.

If we stay with the picture of the brain, our tools are located in different nerve centres of the brain. Some are more right brained products – intuitive, thoughtful and subjective. Products for instance like our Financial IQ, which uses customers’ transactional data to provide advanced insights into spending behaviour and reports its findings as a “persona” with a Financial IQ score and a set of uniquely individual predictive behaviours. It’s a product that understands how people think and behave. Other products are perhaps more left brained – more logical, analytical and objective such as CaaS or Categorisation as a Service. CaaS is the world’s most powerful engine for categorising and interpreting customers’ transactional data, which will, within minutes, take a customer’s raw transactional data, crunch through the numbers and split the raw data into over 180 categories of discretionary and non-discretionary spending. It’s a product where the numbers tell the story.

How it works with our customers

But of course, the right brain works together with the left brain, with neurons jumping synapses, making connections all the time. And this is how it works with our customers too.

A High Street bank, for instance, may be using CastScore to reach out to customers with thin credit files, who are normally excluded from credit, and give them a chance to be fairly assessed. Then together we identify an opportunity to take a slightly different path and use CastScore to help their customers augment a traditional credit score and radically improve it. And then our hypothetical bank may recognise that they can take Castlight’s risk management customer analytics up a gear and go down the path of implementing Castlight’s Financial IQ or test their data in Castlight’s Data Labs using our APIs to review the affordability performance of their portfolio, highlight problem areas and unlock potential for growth.

Constant changes

It’s one of our most important functions as a team to help our customers identify which pathway to go down to secure the best tools to empower them to grow, and to be robust and effective for their customers.

The open banking revolution is taking hold and taking hold fast. And banks and other financial organisations need to be more nimble and innovative than ever before. We must give our customers every opportunity to move agilely in and around our product suite, using the tools that best suit their needs today and exploring those that might suit their needs tomorrow. And back in the Castlight lab we must continue to test the products we believe our customers will need next month.

In the same way that the human brain constantly changes in response to experience, helping us learn and adapt to our environment, Castlight’s products are designed to help our customers adapt to an evolving financial landscape and predict what might be around the corner.

The Joy Of Giving

If you’ve given something up for Lent, you’re in the home stretch now and that chocolate Easter egg, glass of wine or can of fizzy stuff is almost within reach. Millions of Christians around the world choose to deny themselves a treat during Lent and use it as a time to remember Christ’s sacrifice. And millions of people with different faiths or no faith equally use Lent to challenge their willpower, lose a few pounds and increasingly – raise money to help better the world around them.

You only have to look at UKFundraising’s website to see the range of creative fundraising campaigns which the UK’s biggest charities have devised in order to tap into this universal spirit of wanting to do something good for others this Easter.

Sense of Happiness

And giving makes us feel good – that’s a fact. At least according to results of research published recently by O’Brien and Kassirer in Psychology Today which showed that a group of people given $5 to spend on the same treat for themselves each day for 5 days, recorded a lower sense of happiness at the end of the study that the group who were tasked to spend their $5 each day on other people.

But what if you don’t have a spare fiver? What if you are up to the wire, the cheese wire even, at the end of every month? Does that disenfranchise you from the happiness of giving? I think it does.

Financial Health

Digital journalist Jack Derwin recently wrote a helpful article for the Australian edition of Your Money in which he listed 5 signs of financial health, all of which I’d wholeheartedly endorse.

But the one that really caught my attention was the fifth point where he says “the final sign of financial wellbeing is having the ability to give to others. Whether it’s supporting your favourite charity, giving to a worthy cause or helping out a friend in need, the capacity to give is a mark of true financial freedom.”

Financial Wellness

Financial wellness is not just about getting the numbers to line up on the right side in your bank account – although it is certainly about that. It’s also about holistic wellness – getting someone into a position where they are in control of their finances and therefore in control of their lives.

That’s what our Affordability Passport is all about. We use state of the art open banking technology and the world’s fastest categorisation engine to do it, but what I love is that one of the things we can achieve for our customers is one of the world’s simplest and most ancient of pleasures. The joy of giving.


Interesting Times

When reviewing the constant Brexit news coverage, it’s perhaps worth remembering Robert Kennedy’s speech in Cape Town in June 1966 when he said:

“There is a Chinese curse which says ‘May he live in interesting times.’ Like it or not we live in interesting times. They are times of danger and uncertainty; but they are also more open to the creative energy of men than any other time in history.”

We too are living in interesting times and, as Kennedy so rightly pointed out, interesting times bring not only uncertainty but opportunity.

Nugget of Opportunity

I was thinking about this when I was reading a recent issue of Mortgage Strategy. The story headlined “Number of house hunters lowest in seven years”, and reported that, according to figures from NAEA Property Mark, the average number of house hunters registered per estate agency branch dropped by 18% in February from 309 at the same time last year to 252 this year.

That’s perhaps not surprising at a time of uncertainty like this. But tucked a bit further down the story, the journalist, Leah Milner, reported an interesting nugget of opportunity for first time buyers. The figures also suggested that “first-time buyers are taking advantage of a less competitive market, as the proportion of sales to this group reached a seven-month high of 30 per cent.”

Be Prepared

That’s good news for the first time buyers who have clearly seen an opportunity and been nimble enough to take advantage of it. And I think it’s a lesson for all of us. Be prepared. We don’t know how things are going to shake out over the next weeks and months, but we can be prepared and ready for opportunities which may present themselves.

Castlight’s Affordability Passport is a good way of ensuring that you can move quickly on a mortgage or a loan if an opportunity crops up. It’s a 10 minute on-line process to  provide your lender with all the financial information he or she needs to process an application – no bank statements required. Whether you are a first time buyer or not the market is shifting in new and interesting ways and it has to be a good thing to be poised for action.

New Creative Energy

We are indeed living in interesting times, and yes they are uncertain. But I like Kennedy’s optimism that uncertainty also creates opportunity. And I believe that we too can use the “times” in which we find ourselves to be open to a new creative energy.

In fact, we have been burning enough creative energy recently to power a small factory with the result that Version 3 of the Affordability Passport is just around the corner, with hugely innovative new features and creative user experiences.

Exciting times indeed.

Castlight Achieves ISO-27001 Accreditation

A huge congratulations to Murdo Thomson, our Chief Information Security Officer, and his team, who have secured ISO-27001 accreditation for Castlight.

ISO-27001 is the only audited international standard that defines the requirements of a robust information management system. And securing the standard demonstrates that an organisation has defined and put in place best-practice information security processes.

Key Strength

We knew our information security was one of our company’s key strengths, but we wanted to challenge ourselves. So we volunteered to put ourselves through the wringer and have the robustness of all our policies, procedures and processes tested and squeezed.

And after three months of Murdo checking every aspect of our information security systems against the requirements of ISO-27001 and two days of rigorous examination – we passed! And we are now proud to be just one of a handful of fintech companies in the UK who have achieved the standard.

Data Safeguard

Our clients entrust their data to us and it has always been part of the DNA of our business  practice and processes that we respect and safeguard that data. We invested a significant amount of time and energy to achieve the ISO-27001 standard because we felt  strongly that our customers deserved it. We believe that we owe it to them to provide, not only our assurances that their data was safe, but also validation from an internationally recognised standards authority.

I think Murdo would agree that the ISO-27001 journey has been hard work but hugely rewarding. From where I sit, in addition to the satisfaction of having our information security processes and practices externally endorsed, I feel that ISO-27001 has given us a new appreciation that information security is not just the responsibility of Murdo’s department. It’s embedded in everything we do, every relationship across our different departments and every dealing with every customer.

Heart Of Our Value System

But perhaps most importantly, ISO-27001 has made us more aware that information security is at the very heart of our value system, that it’s part of the ethical way we strive to do things at Castlight.

The ISO-27001 auditors couldn’t test us on our values. But I hope they sensed what was close to our hearts when they they were with us.