Financial Services Use By People with Serious Mental Illness: Risks and Potential

Background and Purpose: Finances play a critical role in the trajectories of people with serious mental illness (SMI). While adequate income and capacity to manage that income are critical elements of financial well-being, an important but poorly understood element relates to financial services that people use to receive, store, spend, save and borrow funds. Lack of access to safe and affordable financial services has devastating material and health impacts on low-income people in general. Innovations in financial technology in recent years raised the possibility of a more inclusive financial services environment but the recent rapid shift of the poorly regulated industry towards ‘predatory exclusion’, offering dangerous, high-cost, products, is extremely concerning. This issue has not been adequately explored among people with SMI, either the risks involved with financial service use, or the potential for financial services to support financial well-being, including through enabling supported financial decision-making arrangements. This paper presents results of longitudinal qualitative research exploring financial services use by people with SMI, with the aim of developing interventions within or alongside healthcare settings and needed regulatory and policy reforms.

Methods: Building on prior research, we conducted qualitative interviews with approx. 90 low-income individuals with SMI over a six-year period, exploring experiences using financial services. Data collection occurred across several related projects, covering different but overlapping sub-groups among the SMI population, including people in substance use treatment (23), experiencing homelessness (22), with incarceration histories (22), and people with SMI not falling into any of those groups (20), including ten with experience of having their funds controlled by another person. We analyzed the data using thematic analysis with an inductive coding approach. We also conducted a comprehensive scan of the relevant financial services landscape. The research is guided by a social-determinants of health, political economy framework, examining structural and conditions that shape decisions about financial service use, as well as political economic circumstances shaping the nature of the financial services industry.

Results: People with SMI are poorly served by the financial services industry. They are un- or under-banked at higher rates than others; when banked they often pay high fees. Banks typically do not offer tools such as view-only accounts to support transparency or autonomy for those who have their funds controlled by another person, or who want financial decision making support without relinquishing financial control. People with SMI experience more than average problem debt, from unpaid bills to informal loans to more conventional debt. They are highly vulnerable to high-cost, predatory loan products, proliferating through fintech.

Conclusions and Implications: There is potential for supportive financial services given technological advances but programmatic innovations, and regulatory and policy reforms are needed to fully realize that potential. Financial services that effectively serve people with SMI will likely offer improved services for low-income and other people overall. To protect people with SMI from harmful predatory products, short-term interventions such as integrating information about financial services into healthcare settings can mitigate harmful effects of financial services, but urgent regulatory and policy reforms are needed.