Long reads

World Mental Health Day: Financial services are a universal human right

Madhvi Mavadiya

Madhvi Mavadiya

Head of Content, Finextra

This year, the World Federation for Mental Health (WFMH), the founder of World Mental Health Day, is recognising its 75th anniversary and this year’s official theme, ‘Mental Health is a Universal Human Right.’ Poor mental health can have a substantial impact on how an individual manages their money, and as the charity Mind explains, worrying about money can also make mental health worse which can become a vicious cycle. However, this is just a drop in an ocean of many considerations financial services organisations must make before aligning their business priorities to anything that could endanger human rights.

Why financial institutions must consider mental health

Sustainable business consultancy BSR explored how since the 1948 Universal Declaration of Human Rights (UDHR), “the responsibility to protect human rights has primarily fallen on governments. Beginning in the early 2000s, however, it became increasingly clear that the freedoms enshrined in the framework could also be violated – and promoted – by the private sector.” Following this, the UN Guiding Principles on Business and Human Rights, established in 2011, advised that while governments should implement policies to prevent rights violation, private companies must “refrain from negatively impacting rights even when governments are failing to create or enforce necessary laws.”

While good mental health is a universal human right, the financial services industry – spanning from commercial banking to asset management to venture capital – will have to ensure it is addressing any universal risks that may impact universal human rights. According to BSR, the ‘Top Human Rights Risks for the 10 Human Rights Priorities for the Financial Sector’ are:

  1. Discrimination in lending practices;
  2. Customer due diligence;
  3. Sector due diligence;
  4. Bribery and corruption;
  5. Large-scale infrastructure and land developments;
  6. Commodities investing;
  7. Customer and employee privacy;
  8. Supply chains and modern slavery/human trafficking;
  9. Equal pay; and
  10. Discrimination.

If all of these factors impact the provision of financial services to communities, they will also hinder an individual’s access to finance and these difficulties may result in poor mental health. To remedy this, BSR states that the top three opportunities for positive impact are:

  1. Prioritising positive infrastructure projects;
  2. Empowering underserved demographics; and
  3. Socially responsible investing.

For this to be achieved, banks must consider the social and environmental impact of their investments and financial players will need to collaborate with governments, developers, and society to ensure projects such as sanitation, water purification, or road development in rural areas that lead to hospitals or schools, are advanced. The financial sector must also work with tech-savvy organisations to provide mobile-to-mobile banking, lending, and financing for those who are underbanked or unbanked, and programmes that teach financial inclusion and financial literacy must also be scaled up.

Phillip Dutton, CEO and founder at Solidatus, referenced how the “past few years of turbulence and change have highlighted the undeniable importance of mental wellbeing across all areas of our lives. Both at home and at work, mental health is increasingly, and rightly, recognised as a key issue to be addressed. On World Mental Health Day, it’s encouraging to see the UN working to ensure mental health is seen as a universal human right.”

What progress has the financial services industry made so far?

While there are some pockets of good practice, particularly in the fintech space, more needs to be done across the board. For instance, in 2020 at the start of the Covid-19 pandemic, I spoke to fintech firms and those with anxiety, obsessive compulsive disorder and bipolar disorder about how financial distress can have an effect on their mental health, and vice versa. During this time, WHO were advising people to not watch, read or listen to the news as it could lead to tension, and Anxiety UK were explaining that uncertainty around the economy could exacerbate certain characteristics of mental health conditions.

Fintech firm Toucan’s 2020 report explored how compulsive spending is a common feature of bipolar disorder and many of those who suffer with anxiety and depression may use shopping to deflect negative feelings. Alongside this, the report found that mental illness can occasionally make an impact on holding down a job, a problem that was exacerbated by the pandemic and subsequently, as money problems increased, amplified mental ill-health, stress, anxiety, and low self-esteem.

The Money and Mental Health Policy Institute (MMHPI) also released research on the correlation between mental illness and financial difficulty and found that almost half of people in problem debt also suffer from mental health issues. Four in 10 people who have experienced a mental health problem have allowed someone else use their debit or credit cards, and one in five have permitted someone to log in to their online banking, which is not the safest option and leaves people even more so vulnerable.

In conversation with Finextra, Neil Kadagathur, CEO, Creditspring, made connections between what was felt by individuals during the Covid-19 pandemic in 2020 and the cost-of-living crisis in 2022. Creditspring’s latest Financial Stability Tracker found that 30% of the UK feel their mental health has significantly worsened since the start of the cost-of-living crisis, rising to almost half (48%) among 25–34-year-olds.

Kadagathur said: “A quarter of people said that they are currently experiencing the worst mental health wellbeing they’ve ever gone through due to money worries - clearly, people desperately need more support. World Mental Health Day can help to shine a light on the issue and start difficult conversations around hugely important topics. It presents an opportunity for policymakers, financial institutions, health services and charities to come together to develop more integrated support solutions to help tackle the current crisis.”

Harking back to the top human rights risk mentioned above, Kadagathur went on to explain that “support solutions must extend beyond simply providing finance and credit. Responsible lenders must also offer additional help to support its borrowers and promote good financial habits which in turn have mental health benefits.” As well as offering free financial tools to their members, Creditspring also directs them to StepChange, Samaritans and MoneyHelper depending on their situation.

How can technology help boost financial wellbeing?

Günther Vogelpoel, CEO, Recharge – provider of Pay Now, Buy Later (PNBL) cards believes that “World Mental Health Day raises awareness of often neglected mental health issues,” and their product aims to reduce “money-related stress through offering prepaid cards, providing consumers with a tool to make better financial decisions and lower their anxiety though not having the burden of circumstantial debt caused by the use of credit cards, subscriptions or BNPL services. Financial wellbeing and mental health are closely linked; acknowledging this helps everyone support each other.”

Matt Jennison, head of financial inclusion, NOW Money reiterated that positive financial wellbeing is good for physical and mental health, and innovative technology and digital financial services including apps are providing access to financial services that drive financial wellbeing. While Jennison’s mission is to improve the financial literacy of their customers, he added that “financial awareness and understanding can contribute positively to their overall wellbeing and help reduce inequalities in the region.

“Reducing inequalities is a fundamental pillar of the UN’s Sustainable Development Goals and the overall journey to achieve the end of poverty, sustainable and inclusive economic growth, and development among all countries. According to the United Nations, inequality implicates asymmetry in opportunities, rights, and social status between people. At NOW Money, we are working to bridge the gap by providing instant access to financial services to everyone, making sure no-one is left behind,” Jennison said.

Summarising how technology can boost financial wellbeing, Jennison provided four options:

1. Digital wallets and contactless payments: These technologies make transactions quick and convenient. They also offer features like expense tracking and notifications, helping users to stay on top of their spending.

2. Online banking and financial management tools: Traditional banking has evolved with online services, where you can now manage accounts, pay bills, and even apply for loans without leaving home. These tools often come with features like spending analysis and financial goal setting.

3. Budgeting tools: Apps can track spending, categorise expenses, and provide insights into a user’s financial habits. This awareness can be a powerful tool in improving financial decisions.

4. Protective AI: Intuitive AI-driven transaction monitoring solutions can protect users from scams and flag suspicious transactions to the user. Using technology to protect as well as to facilitate financial transactions is important especially in an increasingly digital world where anyone is susceptible to cyber and digital fraud.

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