TotallyMoney launches tool for real-time affordability insights

TotallyMoney's new Open Banking tool helps customers to increase their chances in accessing the best financials offers. The launch of this new feature marks the fintech’s third Open Banking use case, as it advances the financial services beyond credit report data to achieve its mission of helping everybody move their finances forward.

Leveraging data to the customer’s advantage

Following the launch of its Monitor tool and series of lender API integrations, TotallyMoney has announced a third Open Banking use case. The new tool provides customers with live insights into their affordability, giving them an improved understanding of their own finances, and lender decision-making.

This follows recent analysis from the personal finance app, which found that the UK’s financially under-served population has grown by 3.14 million, to 23.34 million in just two years. This represents almost one in two UK adults (45%), with key drivers behind the growth including:

• People’s finances: High inflation has squeezed disposable incomes, and with 7.4 million adults feeling heavily burdened by their bills, 5.5 million have missed a payment. People are becoming increasingly reliant on credit, with card balances ballooning and BNPL usage booming;

• Credit crunch: Higher rates, tighter regulation, and customers struggling to keep up with commitments have led to lenders pulling products, restricting who they lend to, and hiking fees and rates. In particular, this has impacted the near prime and subprime populations, and as such, more than nine million adults have been declined for credit in just 12 months;

• Credit reports: Credit reports haven’t evolved with rapid changes in society, and as such fail to fully recognise renters, gig workers, the self-employed, and those with little or no credit history (thin files), including young adults, and those who are new to the country. But credit report data still remains the backbone for most lending decisions, meaning millions of people are being left behind through no fault of their own.
  
  

The need for fintech solutions

The under-served population was first tracked in 2016 and was then estimated to be 13.6 million people. Since then, it’s grown by 71.3%, to 23.3 million. And with many now at greater risk of missing payments, being rejected for credit, or damaging their credit files, the worry is that this trend will continue.

By connecting an account via open banking in the TotallyMoney app, customers can gain a better understanding of the information financial institutions have access to, and how they use it. This feature also provides a personalised plan, so the customer can see which affordability factors need improvement, helping them to unlock better borrowing options.

Officials from TotallyMoney highlight that 23 million people are now unable to access mainstream credit, an increase of 3 million since 2022, due to the cost of living crisis, a credit crunch, and outdated banking systems. They emphasised the potential of fintech to improve financial stability and urge the new UK Labour government to leverage this to boost the economy. They also advocate for a fairer, more transparent credit system and note that Open Banking data offers significant improvements over traditional credit reporting, with their new affordability insights feature being a key innovation.