A finance group has launched a new tool to educate Australians on their financial risk.
MoneyBRAINS is an automated online tool which provides borrowers with instant insights into their household finances and risk position, as well as what options they have.
Developed by Confidence Finance, it gained more than 500 users in its first two weeks.
It works by asking borrowers 20 questions about their income, financial expenses and debt situation and then provides insights into their finances.
Borrowers are given a summary of information with a ‘risk metric’ which characterises households as ‘healthy’, ‘neutral’, or ‘at risk’.
Director at Confidence Finance, Redom Syed, said while the tool was designed to be simple enough for borrowers to use on their own, brokers could use it to help customers better understand their position.
The idea for the tool was in response to confusing disparities between loan calculators and changes to the lending market.
Syed said, “Some of the lending changes have meant there’s a bit more compliance and rigor in the lending system process, so that’s partly slowed down lending.
“It’s also created a lot more work for brokers to complete the process of someone obtaining a loan. It’s just added time to the process so that’s been the main change.
“It’s about educating people and brokers definitely play a big role in that. If brokers want to use it, it’s free, it’s available, it doesn’t require much, and it doesn’t cost anything, just so long as they’re helping Australians.”
Syed said there was a real need to educate Australians on their financial risk, particularly with the market changing.
He said, “Debt levels are really high, there’s borrowers on interest only terms. I think a lot of borrowers just don’t really understand buffers they really need for changing circumstances.
“People often see what’s in front of them and what they see is what they know, but they’re not really prepared for what lies ahead and the unknown.”