Why traditional affordability checks aren’t enough: Rethinking how we spot financial difficulty

Most affordability checks show you a snapshot—a moment in time. A payslip, a credit score, a bank statement. Useful, sure—but they tell you what happened last month. Not what’s happening now. And definitely not what might be coming next.

And that’s a problem—especially when you’re trying to support someone who may be slipping into financial difficulty.

That’s where Open Banking offers a different perspective. It lets you see someone’s financial behaviour in real time—how income and spending are changing and where potential problems are starting to show. That’s a different kind of insight.

But isn’t this just a new way to check affordability? Not really. It’s about spotting patterns that defy the usual yes/no, pass/fail approach. Let me explain…

Affordability isn’t black and white

Traditional checks tend to create a simple split: someone can either afford something or they can’t. But it’s rarely that clear-cut.

Take someone who meets the basic criteria on paper. They might be managing to pay the bills, but only by dipping into savings, relying on their overdraft, or juggling credit cards. The signs of strain are there—but the risk flags might not be.

The signs of strain are there—but the risk flags might not be.

That’s especially true for people with irregular incomes. Gig workers, self-employed people, and those on zero-hour contracts might not look stable under traditional models, even if they’re managing fine in practice.

The proof paradox

Affordability checks aren’t the only hurdle. There’s also the issue of proving hardship. Support schemes often ask people to show they’re in difficulty. But that proof can be hard to come by.

To access help, someone might need to show multiple months of bank statements, payslips, or benefit letters. But those who need help most often have patchy documentation. Some might be paid in cash, use multiple accounts, or have debts with high-cost lenders. Others might be unbanked entirely.

The result? People are left jumping through hoops just to prove what’s already obvious in their day-to-day reality.

Using Open Banking as evidence

Open Banking can make this easier. Instead of asking someone to find and submit stacks of paperwork, it allows them to securely share the relevant financial data with consent.

This includes:

• Total income, across all accounts and sources

• Spending on essentials like rent, food, and utilities

• Existing debts and repayment patterns

• Signs of financial pressure or shortfalls

• Use of high-cost credit

Support providers—from housing associations to local councils—can use this information to make quicker, more informed decisions. In some cases, this has reduced the time it takes to verify someone's circumstances from weeks to minutes.

What the data actually shows

It helps to think of Open Banking data as a record of financial habits—what’s coming in, what’s going out, and how that changes over time.

This can highlight:

• Fluctuations in income

• Shifts in essential vs discretionary spending

• A rise in borrowing or credit use

• Irregular payments that suggest recent life changes

• Gambling activity or other warning signs

It’s the kind of detail that makes it easier to offer the right kind of help, at the right time. Rather than relying on averages or assumptions, you can see the reality of someone’s financial situation.

What’s more, this kind of detail makes it far easier to offer the right kind of help—at the right time.

One view, multiple uses

And it’s not just about speed or accuracy. Open Banking also creates the potential for a more joined-up approach across support services. Right now, different support services ask for different things. A person might qualify as vulnerable with their energy supplier but not with their water provider—despite the same financial picture.

Open Banking opens up the possibility of a consistent way to assess financial hardship. If everyone’s working from the same baseline, people wouldn’t have to prove their situation over and over again. That would cut down on delays, stress, and confusion.

It doesn’t mean every organisation has to use the same thresholds, but the process for understanding financial position could be more joined-up.

Spotting the signs earlier

You don’t need someone to say they’re struggling to know they might be. The signs are often there—if you know what to look for.

For example:

• Wages being replaced by benefits

• Essentials taking up most of the budget

• A jump in short-term borrowing

• Sudden changes to regular spending

• A rise in gambling transactions

These patterns tend to appear well before someone reaches a crisis point—giving organisations time to offer support before things get worse.

For instance, a single parent was found to be spending on non-essentials while missing rent payments. With the right insight, the advisor can arrange for direct rent payments through Universal Credit and start a budgeting conversation. In another, a client’s transaction data may highlight regular gambling, which helps the adviser point them towards specialist support.

Consent matters

Of course, this level of insight brings important responsibilities. The more we can see, the more careful we need to be.

That’s why consent matters. People need to know:

• What’s being accessed

• How long access will last

• How their data will be used

• That they can withdraw consent at any time

Done properly, this builds trust. It also makes it easier for someone to share their situation without feeling judged or exposed.

More respectful, less intrusive

Of course, making this work takes more than just good data. Organisations also need the right systems, skills, and partnerships in place. No one enjoys having to prove they’re struggling. And for many, repeating their story over and over again can feel dehumanising.

Open Banking provides an alternative. Rather than relying on detailed questioning or paperwork, people can choose to share what’s needed in a quicker, clearer, and less stressful way.

For support workers, this shifts the conversation from “show me you need help” to “I can already see things are tough—let’s talk about what we can do.”

What’s needed to make it work

To get value from Open Banking, organisations need more than just access to data. They need:

• The tools to make sense of it

• Training to interpret financial patterns

• Clear processes for supporting people based on what’s found

• Strong data governance practices

• Trusted relationships with advice and support providers

When these things are in place, support becomes faster, fairer, and more personalised—without putting extra burden on the people who need it most.