Projects

PurchasePower

PurchasePower is an intelligent assistant that utilises open banking to help young professionals to manage their purchase power and provides them with suggestions to nudge their behaviours in order to get better loan deals.

People

STUDENTS INVOLVED

Tammy Xiaomin Tang

Shanshan Liu

Binhai Wang

ABOUT

Bud

Money management with open banking data

Open banking is a new regulation allowing users to connect their bank accounts to a single app. Therefore, with open banking tech, the transaction dataset is richer than ever before. We can use this data to make retail banking better understand their customers' financial behaviour. This data certainly contains valuable customer insights. How can we use this data to improve customers' financial wellbeing and to encourage customers to use open banking functions? And how can we use this data to raise self-awareness of customers’ financial behaviour and nudge them to improve their financial wellbeing?

The challenge for young employees who are unclear about their purchase power

Lots of young professionals in the UK encounter financial management issues. 29% of employees in the UK run out of money before payday. And, 2/3 of loan applications are rejected or received higher rates than advertised rates. From our research, we found the most common financial pressures for young professionals are unclear affordability, budget management, overspending, unbuilt Credit score, credit product exclusion and preparation for applying for credit products. To solve those problems, they need to understand how much they can spend and how to prepare for future loans. In-depth research concludes that the root cause of being not clear about people's own purchase power are low financial literacy, thin credit profiles and invisible spending. In the long term, unclear purchase power will affect loan eligibility.

Clarify your purchase power

“PurchasePower” helps users understand how much they can spend and how much they can borrow. By calculating and analysing upcoming fees and disposable income, PurchasePower helps users understand how much exactly they can spend each month. If the users want to get a car loan or mortgage, they can use the affordability calculation function. Our app will recommend the maximum loan limit that they can comfortably afford. Therefore, users can understand their maximum budget and make decisions based on that. Our app helps users understand their affordability clearly.

Nudge financial behaviour to get the best loan deal

Our system will recommend the best loan package that is suitable for the users. If they cannot receive the best loan deal now, Purchase Power could nudge their financial behaviour to help them receive the best loan deal in the future. To achieve the best loan goal, Purchase Power helps the user build credit scores and increase disposable income. Purchase Power gives users customized advice depending on open banking transaction data that includes geographic data and merchant names. From this data, PurchasePower analyses users’ daily spending pattern, for example, the user spends 300 pounds monthly on Costa coffee near his office, so our app recommends this user to make his own coffee to save money. Our app also has some functions to help the user cut down on their budget and increase their credit score by using set alerts to predict overdraft and to cancel your subscription fees. Following the advice from our app, users can receive their ideal interest rate for a loan package.

User testing and client feedback

We received feedback from our interviewees about how we could help them reduce their financial pressure and be more confident to achieve their financial goals. They agreed that they would change their financial behaviours by spending less, building up their credit score to prepare for their financial goals. We also receive great feedback from our Client BUD. As they also have a project working on affordability with Open banking, they said our project provided great insights from the customer side. They also commented that some functions are realistically based on customer requirements and it is an innovative approach to solve the problem.

Value network

Partnering with some customer-finance Fintech, our database will be enriched. A deeper understanding of the day-by-day spending patterns and the current liabilities of customers can be obtained. Our service provides budget insight and spending management to customers who overspend. For borrowers, our service could determine what is the amount the person can repay comfortably without financial pressure. We provide the onboarding application service that links borrowers and production offices. Analysing the applicant’s enriched financial data in document format or via an API, the insight will be sent to the production office. Their officers can then better process the loan application with the external lender, or their own product team. The credit decision can be made and presented to the borrower in no time.

Projects

PurchasePower

Clarify your purchase power

Nudge financial behaviour to get the best loan deal

students involved on the project