Can fintech protect the vulnerable?

Dealing with financial abuse

It only came to my attention recently in talking about these things with those trying to solve the issues is that financial abuse is as prominent as domestic abuse. If you beat up your partner, you can see the physical bruises; but what about if you coercively control your partner or aging parent by limiting their access to money? There are no physical bruises, but the mental control is just as strong, if not stronger.

It then makes you wonder why more is not done about this. There are things happening, but it all seems to be under radar. For example, abuse of the elderly finances has been developing for some time. HSBC and Kalgera come to mind and, more recently, Sibstar. Sibstar is the brainchild of Jayne Sibley. Jayne’s mother had dementia and got very confused about money:

“She got very confused with how much to spend, she would spend more on food shopping than me and I've got a family of four and it would all go off in the fridge. She fell victim to scams over the phone, she would take money out of the cashpoint and give it away three or four times a day. My brother and I eventually made the very difficult decision of taking away access to her own money, which immediately meant taking away her independence.”

This is pretty common – I’ve been through a similar experience with my own mother – and Sibstar aims to change that. The way it works is that the person living with dementia is given a debit card that works like any normal debit card. The difference is that their carer has the Sibstar app on their phone and can see where and when the card is being used. More than this, through the app, the carer can determine where and when the card can be used. Yes for the local shops; no for payments to romance scams.

I’m all for this, although it does lead to a different question, particularly around human trafficking, domestic abuse and coercive control.

Let’s take a relationship where one person decides to constrain their partner’s activities by limiting their access to money. If you have joint finances or, in some instances, a partner dependent upon you for their finances, then you can squeeze the financial strings. Using financial controls, you can abuse the other by limiting their access to food, clothing, transport and more.

It is not something I would do, but it does amaze me how many times this occurs in regular court hearings and divorce discussions. This is why, in 2017, Surviving Economic Abuse (SEA) – a charity which aims to raise awareness of economic abuse and transform responses to it – was created in the UK.

The charity was created on the back of a project that found half of the people surveyed agreed with the statement that their partner ‘tries to use money/finances to control me’. There’s a great white paper on this area from Durham University, although it misses a key point for me, which will be an emerging development over the next decade. The point it misses? Well, if the perpetrators of abuse have a behavioural pattern – for example, gradually decreasing payments to a partner’s account – then that can be automatically tracked, traced and flagged by AI analytics. If you can see a behavioural trend of the withdrawal of financial support to a partner or similar diagnostics, it can start a conversation around the reasons why.

Potentially this will be growing as an area of focus this decade.

It is also noteworthy that the SEA and Ask for Angela campaigns exist to allow people to alert their vulnerabilities. More than this, there are significant platforms looking beyond elderly and domestic abuse, and the bigger ticket items like human trafficking.

With human trafficking, the first thing a trafficker does is destroy your documentation. No ID = no you. Therefore, I was pleased to connect with Connie Davis recently, who created the Inspire World Foundation. Their mission is to stop economic and financial system abuse in its tracks. Their programs help nonprofits empower the world’s most vulnerable – survivors of trafficking, violence, and abuse – with the tools to rebuild their lives. Through education, safe homes, fair banking, and strong communities, we’re creating a world where everyone can thrive.

The more time I spend on these areas, the more I wonder about how big the threat and opportunity of financial abuse is, and why we don’t see more start-ups, regulations and banks dealing with it.  If anyone has any tips or pointers on this, please let me know.