Financial vulnerability is on the rise, with over a quarter of UK adults now within low financial resilience, whist nearly 28 million adults are thought to be vulnerable.
This is according to the recently published data of the FCA. But in an attempt to support at-risk individuals, the fintech Comentis provides clinically backed technology to the financial and legal services markets. The ‘first of its kind’ Cognitive Assessment Engine (CAE) supports regulated businesses in the identification of potentially vulnerable clients through software developed in conjunction with renowned mental health experts and psychologists.
Comentis’ software is designed to integrate seamlessly with existing technology and processes, to supplement and strengthen the relationships with clients by removing the burden of subjectivity from risk assessments. The CAE is hosted in the cloud and assessments can be accessed via application programming interface (API) or Comentis’ own front-end WebApp.
The evidence-based assessment process also provides users with a clear and consistent audit trail to assist them in their regulatory requirements.
The blend of SaaS technology and clinical expertise has attracted investors, and Comentis has recently secured £200,000 in its first funding round against a pre-revenue valuation of £2 million. Funding has been secured from a number of senior figures from legal and financial services, with the support of Invest West.
Jonathan Barrett, the Co-Founder and CEO of Comentis, has over 22 years’ experience in financial services and the fintech space, setting up his first fintech back in 1999. He has since held senior commercial and strategy positions in both international corporates and high-growth tech businesses. Here he provides The Fintech Times with a valuable insight into the idea behind Comentis:
What has been the traditional response to financial technology innovations nationally?
Responses have been varied. For some companies there continues to be resistance to change, which is normal – change can feel daunting and costly. There are also some companies with budgets that accommodate for innovating in-house and don’t feel the need to turn to fintechs. However, there has definitely been more receptiveness in recent years. A decade ago fintech might have been perceived as something that felt very ‘Silicon Valley’, but it’s certainly becoming more mainstream.
For us, it’s about embracing change and being experimental. We’re constantly looking to expand our repertoire and always open to new ideas.
How has this changed over the past few years? Has anything created a culture of change at Comentis?
As well as the increase in receptiveness to tech, there’s been a realisation of the role that it can play. We’ve moved away from an expectation that innovations in technology would take away all the heavy lifting from an adviser and now there’s an understanding that working with technology can be a complementary partnership. We will always need the personal human touch – even as technology improves further, we’re not going to see human advisers ousted, but tech is something that helps advisers do their job more efficiently and effectively.
Firms are also starting to realise that they can’t do everything in-house. They’ve got innovation teams or hubs but are increasingly working with small fintechs too, which is great for the sector.
In terms of whether we’ve seen a culture of change at Comentis, we’re a new company and part of the reason we started up was to create change. The pandemic has upended our lives and laid bare disparities so it’s not surprising that we’re seeing a spike in the number of vulnerable individuals who need extra support when it comes to their financial advice. We hope that our product will help remedy this situation by ensuring that these customers are effectively identified and subsequently supported by advisers and brokers.
The crisis has made change critical – everyone has had to adapt, so in that sense, it has initiated a widespread culture of change in the industry as a whole.
What Fintech ideas have been implemented? And what benefits have these brought?
As a fintech ourselves, we’re seeing an increased uptake of fintech ideas. We’re proud of our product, which has been a direct response to a pressing issue. The FCA estimates over half (53%) of the UK population exhibits characteristics of vulnerability and we hope our technology will offer a consistent approach to identifying these customers and pointing them in the direction of appropriate support.
Do you see any other industry challenges on the horizon?
The growth of vulnerability as it starts to really bite. Various government initiatives and debt breaks have shielded people from the economic impacts of Covid and recession, so there is a brewing vulnerability crisis.
Can these challenges be aided by Fintech?
They definitely can and Comentis’ Cognitive Assessment Engine exemplifies this. We can’t just rely on tech – having a personalised approach with human advisers is critical for engaging and supporting customers – but if the tech doesn’t play a role, the risk of human error increases. A streamlined, consistent approach to identifying vulnerable customers will ensure these at-risk individuals don’t slip through the net.
In a more general sense, technology can also enable us to manage risk and predict future crises. Retail banks already use stress testing to assess reactions to economic shocks and if every company adopts analytics to forecast potential challenges, we’ll be better equipped to navigate any economic uncertainty that lies ahead.
Any final thoughts?
We really hope that in the years to come no one will risk being denied financial support or products. Innovation is fintech is making finance more accessible, but collaboration will be the key to supporting vulnerable customers in the long run.
Fintechs and traditional banks can work together and share ideas and we need to stop pitting them against each other. We need to stop perceiving technology as a threat – the value of the personal human touch will endure, but technology can make life easier for customers and financial services professionals alike.