Sleepwalking into Financial Crisis

“We’re Not Sleepwalking, Mr. Brown” Says Castlight Financial

Gordon Brown’s warning this week that “We are in danger of sleepwalking into a future crisis”, is keeping me awake at night.

I couldn’t agree more. In fact, I’ve been putting out this message all last year.

For the last two years, Castlight Financial has been wide awake, creating an “affordability spectrum” of open banking products for banks and lenders so that they can ensure that their customers keep safely within the boundaries of their highly scrutinised affordability and are empowered to understand and control the minutiae of their monthly spending behaviour.

It was the long shadow of the 2008 financial tsunami that drove our company to create a suite of open banking tools for High Street banks so that no-one would have to suffer the effects of a banking crisis like this again.

At one end of our affordability spectrum of tools is the Affordability Passport which protects lenders and customers taking unaffordable credit commitments, based on actual financial behaviour as opposed to generic affordability data. To drive this, we developed the UK’s most powerful categorisation engine, an open banking tool which categorises a customer’s real time transactional data into over 155 categories of expenditure and income. This categorised transactional information is then merged with credit performance data to reveal the borrower’s ability to afford a loan.

As part of the spectrum of affordability care and support we also have the tools CaaS and CASTscore which monitor the ongoing financial behaviour of a bank’s customers. These use algorithms trained to identify early signs of financial distress, so that banks can partner with customers to address the issues before they tumble into debt.

And then, at the extreme end of our affordability spectrum, where the worst has already happened and a customer is in debt, we have the Big View. Launched this summer, in partnership with the Big Issue Invest, The Big View categorises income and expenditure in order to perform an accurate assessment of the actual amount a customer can repay,and allows banks or debt counsellors to work with customers to strategise, prioritise and resolve their debt issues.

Our company’s strapline is a “safer financial world” and we believe we have the tools to ensure to help secure that.

I would love an opportunity to talk to you about our suite of affordability tools, how they work across the affordability spectrum and how they could be a real wake up call to the sleepwalking situation we find ourselves in just now.