Yahoo News Touco: new app lets you pick a carer or buddy to help you tackle debt
Trying to tackle the issues caused by money and mental health problems isn’t an easy task to do. The Money and Mental Health Policy Institute, set up by Martin Lewis, describes the two as a “marriage made in hell,” as the relationship between the two can feed off one another, causing a vicious cycle.
Fintech start-up Touco isn’t going to solve everything when it comes to money and mental health but it has some ideas about how to improve the relationship between the two. Founder and CEO Bailey Kursar’s idea is to help people manage their money better along with the help of someone they trust, such as a carer or family member.
With a background in working at some of the UK’s biggest fintech companies such as Monzo and Zopa, along with a personal passion to do something positive for those who deal with mental health, Kursar is drawing on innovations in the sector like Open Banking to help people manage their money better.
“The thing I wanted to work on was, how can I help a person in that avoidance spiral because their debts are racking up or their bills are coming in and they’re not paying them because they’re in a bad place,” Kursar explains. “How can I help that person and help them to reach out and get the right support from the people closest to them that they trust.”
Touco’s app uses Open Banking to connect to another person’s version of the app, a designated ‘carer’ who could be a parent or friend. It works in the way the aggregator apps such as Yolt and Emma work, except instead of an app seeing your finances, someone else can too.
A early version used alerts around how someone was spending, or not in the case of bill avoidance, so it could trigger a message to be sent to the carer, focusing on a form of informal support. The team ran a three-month pilot project last year and were amazed by the results.
“We had people who had levied for years with mental health difficulties that were really impacting the way they thought about money and had racked up debts. They used that three months really effectively to put better habits in place, get help with debt and feel a lot less burdened as they’re getting that stuff on their to-do list.”
Carers now get updates four times a day on transactions. The idea of using a buddy to keep you accountable isn’t new, whether it’s about having a fitness regime or eating healthier. But it's rare to see it in finance; Kursar says the closest thing to Touco is probably a joint account and she is not a fan.
"Joint accounts are really messy because you’re entering into a credit agreement with that person and the money is jointly owned, so if the account is drained by your partner then you have no recourse. But being able to delegate in a more controlled way like we’re trying to build. I think that’s going to be more relevant to people.”
Touco has been working on a new carer card. Say someone is in hospital and isn’t able to keep up with their bill payments, or maybe they’re shielding and are unable to leave the house to buy groceries. The carer card is a pre-paid card that allows them to designate someone to pay for goods and services on their behalf. They can set alerts that the money can only be spent on certain goods or up to a certain limit.
The carer card was something Touco was going to explore this year before launching at the start of 2021, until Covid-19 struck and it demonstrated the need for an offering like this. “The dual control and visibility is something you don’t find in almost any product,” says Kursar. “The closest at the moment is parent and child products, like GoHenry. But with two independent adults it’s a different thing to design for legally according to the regulations.”
The team applied for a grant from Innovate UK as part of its Covid-19 response fund and was successful. A version of the card should be out by October and Kursar says it will be scaleable depending on demand.
Facilitating the payments side of things is expensive, which is where the grant comes in. But there’s also a lot of work that goes into the safe-guarding side too. “Safe guarding is probably the most important thing to us. For a lot of people when they need that support they can end up giving their online credentials, pin number and debit card, to the person caring for them and that leads to a lot of potential for fraud.”
Touco has various safeguarding options such as support content, as well as ways to unlink the connection between a person and their carer without alerting them in case they’re being difficult. In addition, with the carer card, a person is only able to delegate where the money is spent, not simply handing over money to a carer. “We’ve also thought about how it might work from a payments piece, making sure we’re safeguarding someone’s money and they can then withdraw that fund if they decide that person is no longer trustworthy,” adds Kursar.
Touco has been working alongside The Money and Mental Health Policy Institute to build the service, through its place on Nationwide’s Open Banking for Good programme, an initiative to use open banking to help the financially squeezed in the UK. The seven-person team hasn’t found it too difficult to adjust to working from home, and the start-up had a pretty flexible working policy before Covid-19. It also helps that they’re motivated by the mission of improving the financial lives of vulnerable people.
“So many of the people who are using our product said this makes it easy to talk about money, something I would never do otherwise but now I’m used to it and it’s helping me,” says Kursar. “I wish we could be more conditioned to just do it anyway, but having the tool really helps people to have these conversations.”
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