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Casting Light at Christmas

Yesterday evening I was listening to the story of a young family man, working in the financial services industry who, on Christmas Eve was on the brink of taking his own life. The financial services company he was running had lost money, investors’ finances were threatened, and criminal charges were looking unavoidable.

This is a story that would not be unfamiliar to charities like the Samaritans and Mind, particularly in the dark days of the 2007 financial tsunami.

But happily, and rather unusually, this young banker was saved at the last minute … by his guardian angel.

It’s a Wonderful Life

The guardian angel was Clarence, the young financier was George Bailey and the story, It’s a Wonderful Life, is watched by millions of us every Christmas.

It’s fiction of course, but like some of the best stories, it is shot through with the starkest of truths. And in this instance, the darkest of truths. This was a guy under intense financial pressure, whose financial distress had seeped out to affect his whole life and distort his sense of his own worth.

It got me thinking….

At Castlight, we strive, above everything else to deliver ‘a safer financial world’ and I’d like to think we could have helped George Bailey, long before he stood on the edge of the bridge on Christmas Eve.

Christmas Pressure

For anyone unfamiliar with the plot, here’s a quick summary. When George Bailey’s father died, leaving the Building and Loan company without a director, George gave his college tuition money to his brother Harry and unwillingly took up the reins, on the condition that Harry took over the Building and Loan when he finished uni. Four years later, Harry returned with a job offer from his father in law and George resigned himself to keep running the family firm. Sometime later, there’s a run on the bank, misplaced funds and potential arrest for George. George feels he’s let his whole family down and wishes he had never been born.

Sadly, there are a lot of people like George. So, each year, as we look forward to Christmas, it is good to be reminded by charities like Mind and the Samaritans, that for people with mental health or financial problems, Christmas can ratchet up the pressure to sometimes, catastrophic levels.

There are all sorts of reasons why people get into debt. That’s why Castlight Financial recently launched the Big View at the House of Parliament with the Big Issue’s Lord Bird. The Big View helps people in debt, often people who have been brought to the brink of despair, to get back on track, using affordability technology to understand and resolve their financial problems.

If we’d been around at the time, I believe the Big View could have helped George Bailey. We could have been his guardian angel and he would never have walked onto that bridge.

There are lots of people out there needing guardian angels and I’m glad that the Big View is doing its bit to cast light into the finances of more and more people with debt crises.

These are important, pressing issues and ones we need to think about amidst the bright lights, ringing tills and chinking glasses.

Plot Rewrite

But I’m not quite done with Its a Wonderful Life! And, with a lighter touch I’d like to leave you with some small plot re-writes which, had I been around in 1946 I would have suggested to director Frank Capra.

I think George could have gone off to university with his brother Harry, as his CastScore would have shown sound financial behaviours merged with a strong credit score and he would have got an affordable loan for Harry’s tuition fees. Uncle Billy would simply have had to step up and hold the fort until the brothers both finished university. Working at the coal face of the business Uncle Billy would have learned a thing or two about management and would never have been daft enough to misplace the $8,000 that caused all the trouble.

Four years later George and Harry, with their MScs in Fintech would return to Bedford Falls and invent the Affordability Passport. There wouldn’t have been a run on the bank, because the Building and Loan would be thriving, underpinned by the Affordability Passport and CastScore which would ensure that only people who could safely afford to repay loans would be able to take them out. George and Mary wouldn’t have to prop up the bank with their honeymoon savings and would have enjoyed a week in Paris, sipping fine wine at a pavement café.

Fortunately for all lovers of Its a Wonderful Life, Frank Capra told his story his own way. And I for one, will love it once again this Christmas.

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.