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.

We Must Address Financial Wellness

More than 6 out of 10 senior HR executives in the UK have seen a rise in financial well-being issues affecting employee mental health and work performance, according to a nationwide study by financial solutions company, MetLife UK.

 

And just this week Insider magazine’s Ken Symon highlighted a troubling figure of £51 billion, which according to a Yorkshire Building Society and Salary Finance report, is lost to the UK’s economy each year in productivity and recruitment expenses as financial pressures make employees unable to finish daily tasks and more likely to change jobs.

Financial Wellbeing At Work

These are very concerning statistics but I think what worries me, perhaps even more, is Metlife’s findings, reported by George Elringham on the Insight website, that businesses are concerned they do not understand enough about financial wellbeing, with 66 percent saying there needs to be more clarity on best practice on tackling financial wellbeing at work.

 

Adrian Matthews, Employee Benefits Director, MetLife UK said: ““There is no magic solution to improving financial wellbeing in the workplace….” And I’d agree with him as far as the magic is concerned. There may not be a magic solution but where we differ is that I believe there’s definitely a solution.

The Solution

Castlight’s Affordability Passport is ultimately a financial wellness tool, which can be put directly into the hands of individuals, whether they are employed by companies or working for themselves. Many of our customers use our Affordability Passport to demonstrate their affordability to lenders, but we are increasingly seeing people use its financial wellness functionality to manage and control their day-to-day finances.

 

The Affordability Passport uses open banking technology to access a customer’s transactional information and uses CaaS, a powerful categorisation engine to categorise income and expenditure, across any number of accounts into over 150 categories, summarising income streams, credit commitments, essential costs and discretionary spending. The customer achieves a 3D picture of their finances, including the pressure points, areas of vulnerability and projections of problems before they happen. For one customer, the Affordability Passport may flag up that what is causing severe financial pressure is their car loan repayment plan. For another individual, it may just be that reducing spending on digital subscription packages would provide enough of a financial buffer, to ease the strain.

 

For some of our customers the Affordability Passport journey is reassuring and informative. It’s like a maintenance gym routine, a financial wellness routine that ensures they stay on track.

Life Changing

But for others with debt who are far from financially well it’s more like a brand new gym membership and induction course rolled into one. And it can be life changing because it sets someone back on the right path, by demonstrating to their bank that, whilst the recent financial path might have been rocky, there are patterns of sound financial behaviour that can be worked on and outcomes turned around. At Castlight we call it redemptive technology.

 

It’s not a magic solution. But sometimes, for someone in financial despair, redemptive technology can feel a little like magic.

 

 

Daredevil Plot Turns on CastScore

DAREDEVIL SEASON 3 SPOILER ALERT

As season three of Daredevil explodes onto Netflix and sucks us all into the now familiar Marvel drama fest of nocturnal super-hero action, fight scenes, intrigue and love interest, I have to say I have been side-tracked a little by the brand new character of FBI Special Agent Ray Nadeem.

When we first meet Ray at his son Sammy’s birthday party, we find out the Nadeem family are in the midst of a family financial crisis. His wife Seema has had all her credit cards declined. Ray’s brother’s wife has cancer and their insurance has stopped paying for treatment. Ray and Seema have stepped in and helped cover their sister-in-law’s medical expenses. And now they are in debt.

Overwhelmed by the financial pressure, Ray asks for a raise at work and is denied. His boss tells him his low FICO score has put him out of consideration for promotion as he poses a bribery risk.

Instead, the agent is assigned the task of visiting arch villain Wilson Fisk in prison to elicit co-operation with ongoing investigations. Needless to say, it looks like Ray’s course is set on a slippery slope into well … bribery and corruption.

Not being a character in the original Marvel universe, purists may not embrace Agent Ray Nadeem as quickly as I have. But I have to confess to an ulterior motive. I’m drawn to Ray because he’s a character in the everyday universe of the world I live in too.

Financially Overstretched

He’s financially overstretched himself but he has done so with the very best of intentions. All he needed was a timely promotion, a window of time to pay off his debt, his sister in law to respond to treatment and all would have been well with his world. He would have had a routine visit to Fisk in prison and returned to his desk for a sandwich. Admittedly, this would be seriously bad TV, but in the real world, personal disaster would have been averted.

The plot all turned on a FICO score which just showed Agent Ray was in debt, not why or how likely he was to be able to repay it.

It was for people like Ray that Castlight recently launched the world’s first open-banking affordability score, providing people with a whole new way of demonstrating their creditworthiness.

Traditional credit scoring focuses on the consumer’s future credit behaviour being similar to their past performance.

CastScore, by contrast uses open-banking technology to analyse a customer’s transactional data in real time and score their likelihood of paying credit back. The AI that powers the CastScore technology has been validated on actual loan performance data, supplemented by expert analysis of spending trends with high street banks. CastScore then merges this information with transaction analytics, sourced from an up-to-the-minute review of the customer’s actual income and spend as well as a more complex analysis of lifestyle and discretionary spending.

“Redemptive” Technology

CastScore looks at and categorises every debit and credit, filling in the gaps in traditional credit data reporting and provides a 3D movie of an individual’s financial story. It gives people a chance to be fairly assessed. And it is a “redemptive” technology which allows people to make mistakes, recover from them and get back on track.

If CastScore had been checked with Agent Ray Nadeem’s FICO score, it would have shown that Ray had a good regular job, that he had a history of fulfilling credit commitments and that he had hit a blip. It would run Ray’s transactional data through financial insights and behaviour software and provide a lender with a score which reflected Ray’s 3D financial profile and the statistical likelihood of him being able to pay off his debts.

It could very easily have given him a score that would have reassured his boss, secured him the promotion and changed the world of Marvel forever.

Traditional Banks Have a Head Start in the Open Banking Space

The banks are in the media spotlight just now as open banking starts to roll out and the debate gathers steam. Are the banks ready? How are they faring in the brand new open banking space where everyone is jostling for room? Read more

Open Banking And A Light Bulb Moment

When new technology bursts onto the scene it is almost always received in two different ways, by two different camps of people – those who are excited by the new opportunities it opens up and those who are resistant to change. Read more

Open Banking – Giving Consumers Control of their Finances

Where we stand today the Big Four Banks have more than 70% of the personal current account market and 85% of the business current account market. I’m sure most people would agree that there’s room for some competition in this market. In pretty much every area of life, the more competition there is, the better it is for the consumer. Read more

The Bank of Mum and Dad Ends Tomorrow

Last week, it was reported in the press that British parents will lend or give more than £6.5 billion this year to help their children buy their first home. This figure is up from £5 billion in 2016. And it seems that the phenomenon is here to stay. It already has its own acronym. BOMAD. The Bank of Mum and Dad. Read more

It’s Time for the Banks to Play Catch Up

This month, Facebook launched Messenger Day, a feature that lets you post pictures and videos with a 24 hour shelf life. Snapchat may have got in there first with the broad concept, but Facebook has given it a twist by formatting the feature to encourage users to get together offline. A billion people worldwide use Messenger and Facebook has identified a way to deliver additional value to them. Read more

PSD2 is Speeding up the Tracks

On Saturday afternoon’s The Bottom Line on Radio 4, Evan Davis asked Anthony Jenkins, former CEO of Barclay’s Bank, what he thought the next big thing in banking would be. Jenkins replied: “In the very short term I think the better use of data to make lending and credit decisions and marketing decisions.”

Of course I couldn’t agree more, as this is exactly what we are already doing with The Affordability Passport. Read more

New Dimensions for Astronauts and Banking

Hidden Figures, in cinemas now, is the story of Katherine G Johnson, Dorothy Vaughan and Mary Jackson, three female African-American mathematicians, or “computers”, working behind the scenes at Nasa in the 1960s. The story is set in Virginia where racial segregation meant that black and white Americans working for Nasa had to use different entrances, different toilets and different coffee pots. Read more