In a financial climate where high inflation and soaring interest rates are the new normal, UK-based personal finance app, TotallyMoney, is taking steps to empower individuals struggling with credit and bill payments. Their newly introduced feature, leveraging open banking technology, is designed to help users monitor their regular spending, avoid missing due payments, and ultimately, improve their credit scores.
Understanding the Credit Dilemma
Recent years have seen a troubling increase in the number of UK adults struggling to stay afloat financially. According to research commissioned by TotallyMoney and conducted by PwC, the community of financially under-served individuals in the UK skyrocketed by 50% in six short years, reaching a staggering 20.2 million people, with another 8.9 million teetering on the edge.
This growing concern has been exacerbated by relentless inflation and prohibitive interest rates, leading to an alarming 5.6 million people missing payments on bills or credit commitments within a mere six-month span. The domino effect of these missed payments is profound, given that payment behaviour accounts for up to 48% of a person’s credit score. This not only influences their eligibility for credit products but also the quality and terms of the offers they receive.
With poor credit scores potentially costing individuals an extra £693 a year on credit card expenses alone, the repercussions extend beyond credit products to higher car insurance premiums and limited options for mobile phone and energy plans.
Credit Scores Demystified: How the New Feature Works
Acknowledging that nearly 20% of adults lack confidence in financial decision-making, TotallyMoney has responded with a solution powered by open banking technology. This innovative feature allows users to integrate their banking data in real-time, providing a comprehensive view of upcoming bills, identifying those that could impact their credit score, and offering insights on managing finances more effectively.
Through this integration, customers gain clarity on their remaining funds after scheduled bill payments, aiding them in budgeting, avoiding overdrafts, and building a more stable financial future. As TotallyMoney CEO Alastair Douglas puts it, “We believe in a fairer financial world — and putting customers in control of their own data, so it works for them, not against them is key.”
A Partnership for Financial Empowerment
The feature’s launch isn’t a solo venture. It’s bolstered by TotallyMoney’s collaboration with Bud Financial, a data intelligence platform known for its groundbreaking transaction AI. This partnership aims to bring accurate financial insights and payment tracking to the hands of those who need it most.
Bud’s VP of Product, Jakub Piotrowski, shares the enthusiasm, stating, “By collaborating with TotallyMoney, we’re making strides toward a fairer financial world where individuals can harness their own financial data to improve their lives.”
In a world where financial stability seems increasingly elusive, initiatives like TotallyMoney’s new feature offer a beacon of hope. By placing financial control back into the hands of individuals, they’re not just helping customers survive the current economic squeeze; they’re providing the tools and insights necessary to thrive within it.