COVID-19 Impacts Fintech

Fintech During The Coronavirus Pandemic: Helping People With Mental Health Conditions Manage Money (Madhvi Mavadiya, Forbes)

U.K. Prime Minister Boris Johnson has warned the nation that the coronavirus crisis will get worse before it gets better and stricter restrictions must be put in place to tackle the spread of COVID-19. For many, the uncertainty surrounding the pandemic can feel incessant and will take its toll on mental health, especially those with anxiety, obsessive-compulsive disorder and bipolar disorder.

The World Health Organization has advised avoiding watching, reading or listening to news that could result in feeling distressed, seeking information on how to prepare and protect friends and family and ensuring that information is only accessed at specific times.

As Anxiety UK’s Nicky Lidbetter explains to the BBC, the fear of being out of control and unable to handle uncertainty are common characteristics of anxiety disorders and therefore, those with anxiety are enduring challenges during this time.Today In: Fintech

Rosie Weatherley, spokesperson for mental health charity Mind adds: “A lot of anxiety is rooted in worrying about the unknown and waiting for something to happen – coronavirus is that on a macro scale.”

How can people living with mental health conditions manage their money during this pandemic? It is clear that the coronavirus is affecting consumer behavior and spending habits, with 52 percent revealing that they will shop online more in the next two weeks as a result of COVID-19, as many are self-isolating at home.

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Money is an overwhelming subject, even more so during a pandemic. A recent report from financial wellbeing and budgeting tool for vulnerable people Toucan explores how compulsive spending is a common feature of bipolar disorder and many of those who suffer with anxiety and depression use shopping to deflect negative feelings.

In addition to this, ‘Let’s talk about money’ reveals that mental illness can occasionally make an impact on holding down a job, a problem that has been exacerbated due to COVID-19 and subsequently, as money problems arise, they amplify mental ill-health, stress, anxiety and low self-esteem.

Bailey Kursar, CEO and Co-Founder of Toucan highlights that “this COVID-19 situation is causing a lot of anxiety for many people, especially those whose finances have been impacted. It’s at times like these that we realise there’s nothing more important than the people we love, and maybe there’s a bit more we can be doing to support them. That’s what Toucan can do for family who want to help their loved ones.”

In recent years, the Money and Mental Health Policy Institute (MMHPI) has provided data and evidence on the correlation between mental illness and financial difficulty and found that almost half of people in problem debt also suffer from mental health issues. While diagnosing this problem is the easy part, a solution is harder to come by.

For people living with mental illness, safeguards are important, and family and friends help share the problem, providing support with budgeting and financial decision making. According to MMHPI, four in 10 people who have experienced a mental health problem have allowed someone else use their debit or credit cards, and one in five have permitted someone to log in to their online banking, which is not the safest option and leaves people even more so vulnerable.

This is where Toucan can help. By tracking spending and balance, the fintech app can send nominated persons a notification to alert them to unusual financial behavior, ultimately improving the financial capabilities of those in need and being able to get timely support when needed.

96 percent said that they would find third party alerts useful when unwell, 89 percent revealed they would find third party alerts handy on a day to day basis and 60 percent said simple red flag alerts would be the best option, rather than being forced to disclose transaction or balance details.

I spoke to a few users of Toucan who agreed that timely conversations can lead to practical money management strategies. One user aged 42, a single mother with three children revealed that Toucan had been particularly helpful as she suffers from physical illnesses such as fibromyalgia, chronic fatigue, Raynaud’s disease and borderline personality disorder, underlying psychosis, severe anxiety, severe depression and paranoia.

“Because of my borderline personality disorder and depression, I sometimes go on spending sprees on Amazon and eBay which can be quite dangerous. With the help of the Citizens Advice Bureau, I am going through a debt relief order, so I am in a place where I am not managing my money and not coping mentally because I do not have the support,” she said.

She adds that Toucan was “brilliant”, and she was able to pick her 20 year old daughter as her nominated person, the best person for this role as “she doesn’t pander to me as much and is firm, but fair. After a few weeks of using Toucan and you’re thinking about buying something online, you’re having to think twice because you know you’re going to get grilled. It’s almost like CBT.”

Another younger user of Toucan with depression found it easier to nominate her mother and said that she had set up customized alerts so that her mother would be notified if she spent over £50 in one transaction or if her balance dropped below a certain amount. “It was handy because my mother would be told to give me a call and check if my depression had gotten worse because of the app.”

Alerts support decision-making and help users maintain their privacy, limiting the potential for financial abuse and demand has been growing for banks to introduce third party money alerts. However, despite a 2019 Treasury Select Committee report on financial inclusion proposing third party notifications, Toucan is the only firm which has built and tested them.

Kursar explains that after speaking to carers in dire straits last week due to COVID-19, “they’re not able to do the things they normally do to take care of their loved ones, and there’s already been an increase in fraud and scams targeting vulnerable people. We’re rushing to respond with an update to the Toucan app due in a matter of weeks.”

She adds that while Toucan is based on a simple idea, the premise of setting up third party alerts has helped users get better at their finances. “For lots of us it can be hugely anxiety-inducing, just thinking about opening a bank statement. Even more so now, with the impact COVID-19 is having on everybody’s money.”

Talking about money can bring families closer together. Toucan are working on a new release of the app which should be ready by May 2020, and will top the platform up with extra features.

Kursar concludes: “Sometimes it’s really hard to ask for help. Especially around money issues. A simple alert to family can really help open up the conversation. It’s been so amazing to see our users get the support they need, just because they got a text alert at the right time. And families have told us how much of a relief it is for them, not to have to start that awkward conversation.”

https://www.forbes.com/sites/madhvimavadiya/2020/03/30/fintech-during-the-coronavirus-pandemic-helping-people-with-mental-health-conditions-manage-money/#112bf486112b

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