Castlight – CaaS tool extended across the affordability spectrum

Blog written by Phil Grady, Chief Executive, Castlight

Over the last couple of years Castlight Financial has invested in the development of our CaaS (Categorisation as a Service) tool, to provide a range of affordability solutions.

The CaaS engine, powered by our own API, uses open banking technology to allow a customer to share his or her transactional information in real time. CaaS then categorises the transactions across any number of accounts into 155 categories of expenditure and 29 categories of income. Categories include credit commitments, essential costs and discretionary spending and then drills right down to all sorts of discretionary spending such as Costa coffees on the way to work, lottery tickets and haircuts.

Up until recently, the CaaS technology has primarily driven our popular Affordability Passport, used by lenders to get a full picture of a customer’s finances at the press of a button. Given that the Affordability Passport process also eliminates the need for lenders to trawl through bank statements and pay slips to review discretionary and non-discretionary spending, lenders are able to offer customers a transformative 10-minute mortgage process. When the market typically assumes an average consultation of around 3 hours with a mortgage broker to secure a loan, the Affordability Passport is truly shaking up the lending industry.

Leading UK banks and brokers have been quick to embrace the Affordability Passport and are currently rolling it out to their customer bases.

But we’re a team of disrupters and we like to keep making ripples in markets, so this summer we took the decision to extend the implementation of CaaS right across the affordability spectrum.

Let’s assume that most people using our Affordability Passport are looking for a mortgage or a loan to enhance their lifestyle. They use credit, but they don’t have problems with debt. They are somewhere in the middle of the affordability spectrum.

But what about the people who, at one extreme of the affordability spectrum are struggling with debt and at the other have income surplus to their current lifestyle requirements, which should be effectively invested and managed?

This summer we prioritised the development of The Big View, a fintech tool powered by CaaS, which empowers people with debt issues, by providing them with access to their own data. The pilot scheme was launched with the Big Issue Invest and Advice Direct Scotland (ADS) in June. Since then any client who requests a Big View analysis has had the opportunity to get an in-depth, 360-degree view of their finances and to work with ADS advisers to interpret the findings and develop highly individualised solutions.

And in the last few weeks, we have had a team working on CaaS for Wealth, a tool designed to help Asset Managers provide the best possible service for their customers. Using the functionality of the CaaS transactional categorisation powerhouse to conduct a wealth assessment, CaaS for Wealth will not only report on exactly what and when a customer spends but will also use its trained engine to identify risk, patterns, behaviours and appetites.

We’re talking to forward thinking asset management companies just now and working hard to bring this product to market. Another revolution is on the way.

We believe that no-one is average, so an affordability product can never be one size fits all. People are somewhere on an affordability spectrum so that’s where our financial affordability solutions haveto be too.