Governance, risk & compliance
Things Foundation to found a so-called National Databank – with the aim to tackle digital poverty and the challenge of affording online connectivity and digital devices. Walker describes the initiative as a “digital foodbank” but one that “provides free mobile data, texts and calls for people in need”. Virgin also has a longstanding partnership with MacMillian Cancer Support, which aims to offer emotional support, information and signposting to all those affected. Again, generosity is the watchword here: people can use this service whether or not they’re a Virgin Bank customer. As Walker explains, “people living with cancer are, on average, £891 worse off a month financially because of a cancer diagnosis,” making the financial consequences of a diagnosis a considerable concern, especially when placed alongside the impact on the individual’s health. “With the rising cost of living and the financial impact of a diagnosis,” Walker adds, “people affected by cancer can fall behind on payments, spiral further into debt or struggle to pay for everyday essentials.”
Banking on support
While these measures from the banks are certainly welcome, they are not exactly perfect. As Michelle Highman, the chief executive at The Money Charity puts it: “There’s certainly more that they could be doing to help people’s financial well-being.” Highman has an extensive background when it comes to educating the public on how to manage their money. The Money Charity is the UK’s financial capability charity which, for over 25 years, has helped the public understand and manage their money. With this in mind, Highman suggests that the main flaw with the current support is that it relies on the individual customer to be proactive to reach out for help, something that might be especially difficult if they’re already struggling to manage their finances. “It’s a natural instinct to not face up to problems and we know that admitting you’re struggling can be difficult,” she explains. “Trust in banks can be low and many customers will fear that if they let their bank know they are experiencing difficulties, then the situation might get worse, not better.” Highman also emphasises that another issue arises from the fact that it’s not always easy for someone to recognise that they’re struggling with their finances. “Banks are not perhaps clear enough at communicating what this looks like and why it’s worth people doing,” she says. “They need to do more to explain what good can come from these conversations in real, practical and tangible ways.” This point was similarly highlighted by the FCA in its original correspondence with lenders back in July, reminding institutions that they must ensure issues are tackled with credible actions, such as free
Future Banking /
www.nsbanking.com
overdrafts or reduced monthly payments. Another concern is that, while banks have made it clear that these are exceptional measures for an exceptional time, they are less transparent on whether they’ll continue once the economy improves. For their part, campaigners are quick to point out that personal financial issues are hardly limited to this period. The 2018 Financial Capability Survey – a report that feels strikingly distant in both time and circumstances – found nearly nine million people in Britain were in serious debt, yet only a third were receiving help. Instead, good money management and financial support should always be available – particularly when the last three years (and arguably the last 15 years) have shown that financial crises can appear with striking regularity.
Experts also fear that the most vulnerable could come to rely on temporary measures – and then be caught short when they’re wound down. As Highman puts it: “It’s clearly important right now as we all struggle with the cost-of-living crisis, but firms should continue to provide this support once things improve. Helping people to engage with their money and to provide solutions when things are tough will always be important.”
All the same, one thing that both Highman and
Walker firmly agree on is that there is never a bad time to reach out for support. “You don’t have to be facing difficulty to reach out to your bank for support or advice,” Walker stresses. “If you’re simply looking for help with money management or want to find out what different products and services are right for you, your bank should be on hand to support you. However, if you are struggling, the sooner you talk to your bank about it the better. They will work with you to iron out the problems and come up with a practical solution.”
Choppy financial waters are always difficult to navigate alone. But during this particularly tempestuous time for Britain’s economy, it’s clear that having guidance and support from institutions can at least help people weather the storm. ●
With inflation for electricity at around 7%, banks are under increasing pressure to support customers.
£1.7m
The amount in eligible grants and benefits support that has been identified as a result of Virgin Money’s partnership with Turn2Us.
Virgin Money and Turn2Us £891
The amount that people living with cancer are, on average, worse off a month by.
Virgin Money and MacMillian 33
Damir Khabirov/
Shutterstock.com
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