Unique collaboration will unlock insights into key-workers’ financial situations and behaviour

The Consumer Data Research Centre (CDRC), based at University College London, Liverpool University and Oxford’s Saïd Business School, has announced a collaboration with the social purpose lender Salad Money, enabling researchers throughout the UK to use anonymised data about the use of consumer credit by NHS and public sector workers for analysis and research.

Salad Money is a social enterprise which was launched in 2019 to provide an alternative to high-cost lending for NHS and public sector workers with poor, thin, or non-existent credit scores. 

More than five million people are “credit invisible” in the UK, and up to 20 million people have difficulty accessing affordable credit from mainstream lenders, many because of flaws in credit scoring (Responsible Finance, 2023, and Lexis Nexis data quoted in the Financial Times, 2022)

Salad uses Open Banking data and its own software for affordability assessments, rather than credit scoring. This, says Salad CEO Tim Rooney, enables it to make fair decisions about applicants’ abilities to repay loans, based on knowing their income and expenditure, and means Salad can offer affordable credit to many people declined by lenders that rely on credit scores for their lending decisions.

The firm receives around 50,000 applications for credit every month and analyses around 1,500 bank transactions for each applicant to make its lending decisions. This enables it to offer accepted applicants small-sum loans at a lower interest rate than they can typically find elsewhere and unlocks insights not available to traditional lenders which don’t use Open Banking. “We have a unique dataset of non-personally identifiable information which, when analysed in aggregate, gives a rich, detailed and comprehensive picture of the spending patterns and financial behaviour of thousands of NHS and public sector workers,” says Rooney.

“Open Banking access gives us the means to make a careful and fair assessment of every applicant's ability to repay the credit they apply for,” he adds. "While we cannot offer a loan to everyone who applies – it wouldn’t be responsible to do so – we use the information they give when applying to help applicants in other ways, for example by highlighting benefits they appear to be due but not claiming, and bespoke support.

"Our commitment to financial inclusion has always included using anonymised and non-personally identifiable information from applicants and customers to paint a picture of their financial circumstances. The University of Edinburgh has conducted two analyses of this data and we have collaborated with the University of Bristol’s Personal Finance Research Centre and with Responsible Finance and other community lenders.

“This Data Licensing Agreement with The Consumer Data Research Centre will result in a monthly stream of more than three million records, from several thousand customers and applicants, through secure download to CDRC. As a social enterprise established to address the lack of fair and affordable credit for people without a perfect credit score, we already hold ourselves to standards way beyond our regulator’s requirements. Opening the doors to this data will give the experts from the Consumer Data Research Centre the opportunity to describe exactly how our customers are affected by the impact of an affordable loan and we’re excited to be working with Professor Paul Longley and his colleagues.”

Professor Paul Longley, CDRC Director, said: “Smart data are key to better understanding of financial precarity and personal finance. The anonymised Salad data will provide researchers with a rich and detailed picture of the circumstances of many of those worst affected by the cost of living crisis. This is an extremely welcome addition to CDRC’s personal finance data, for the benefit of the entire UK research community.”

More information

• The Consumer Data Research Centre (CDRC) was established to lead academic engagement between industry and the social sciences, and to utilise consumer data for academic research purposes. CDRC provides unique insights into a diverse range of societal and economic challenges, in collaboration with a large number of consumer data providers
• CDRC is supported by the Economic and Social Research Council [grant number ES/L011840/1].
• Salad Money is a social enterprise specialising in affordable credit for NHS and public sector workers. It was established after identifying a severe lack of affordable credit for individuals with an impaired credit score and who are “credit invisible”. It is a member of Responsible Finance, a network of financial inclusion-focused community lenders in the UK, and an investee of Fair4All Finance, founded to support the financial wellbeing of people in vulnerable circumstances.