This is a great question and I’m going to give you a very long answer! It’s something we will constantly iterate on. There are 2 ways we identify potential financial difficulties proactively at the moment;
- Identification by customer support; during conversations we look to pick up signs from the nature of what is being said, how it’s being said and the behaviour on the account. Where appropriate, we may try to initiate a conversation and offer referrals to free sources of advice. An example could be where a customer is making repeated requests for an overdraft and mentions they “have a bill to pay” or “cannot afford food.”
- ‘Soft indicators’ - this is what I believe you are referring to, and this is the area we will continue to iterate. At the moment we reach out to customers when they are in their overdraft for 45 days and 90 days without leaving it. We do this just to see if everything is okay - if not we will offer support to try and get out of the overdraft. We do not want people to be in a situation where they are stuck in an overdraft as it is a short-term lending product. A recent report by Stepchange estimates 2 million people are in persistent overdraft debt.
We will continue to add things where our internal systems will pick up on more “soft indicators” which will of course be things like constantly declined payments, high debt to income ratio, frequent OD increase requests etc.
Of course if someone exceeds their limits we will always reach out. As we roll out lending and more and more customers move their salaries over to Monzo we will be able to build out more sophisticated ways to predict financial difficulties using the data we have and machine learning.
Another random idea we’ve been floating around the team is a separate, anonymous part of the forum where people can talk about financial problems so people can “test the water” before speaking to us. A lot of people are reluctant to tell their bank about financial difficulties as they think it could be used against them for future decisions.