Would you use an app that links to your bank account to help manage debt? Our guest explains more on the week of Open Banking’s second anniversary.
This is a guest post by Chris Gorst. All views expressed are Chris’s own and not necessarily shared by Which?.
It’s no secret that in the UK we love to splash out around Christmas – treating our friends, family and ourselves to lots of lovely food, evenings out and (of course) presents. But have we spent too much?
According to a 2018 Deloitte survey, the UK is the highest spending market in Europe when it comes to Christmas at 42% more than the European average.
In fact, new research from Nesta Challenges has revealed that a quarter (26%) admit to overspending this Christmas with 51% saying they are now making a new year’s resolution to save more while 44% are committing to spend less.
High levels of debt
It’s perhaps unsurprising that people want to spend less given our high levels of debt in the UK. People in the UK owed £1,661bn in September
And with a third (29%) of us without a ‘rainy day’ fund for unexpected spending, it’s clear people need help to get back on track after the festive period.
But there’s no need to turn to an expensive financial adviser – it’s 2020 now and there are many apps and tools available that use artificial intelligence (AI), algorithms, and state-of-the-art technology
By linking securely with your bank account, these apps get to know us by exploring our spending patterns, our income and our commitments, then make informed, personalised recommendations.
They can help us reduce or avoid debt, access more affordable credit and learn how to better manage our finances to become more resilient to financial shocks.
The Open Up 2020 Challenge
These five apps are all finalists in the Open Up 2020 Challenge, run by Nesta Challenges in partnership with the Open Banking Implementation Entity:
Cleo – an AI assistant with a sense of humour which helps Gen Z/ Millennials budget, save and track their spending.
Moneyhub – a financial management platform, pulling together multiple accounts, offering people actionable insights to improve their financial wellness.
Portify – a credit builder for modern workers with unconventional earnings patterns, it analyses earnings and spending behaviours to prevent overdraft and interest payments and offers a fee-free credit line.
Tully – a digital debt adviser for those struggling financially – providing online budgeting, debt advice, flexible repayments and money coaching to alleviate financial stress.
Updraft – a solution which automates day-to-day decisions involved in managing money, designed to help millennial users clear their overdraft, pay off their credit cards, and save more.
Which? Money recently covered the finalists in the Challenge to mark the second anniversary of Open Banking in the UK.
What are your views on apps like this? Would you want to use one to help you manage your money? Or if you have already used one how did you find it?
This was a guest post by Chris Gorst. All views expressed were Chris’s own and not necessarily shared by Which?.