ACTION ROOM 1

11:00 Breakout session 1

Using behavioural insights to create win-wins for

firms and their customers

Client Name

The Financial Capability LabUsing behavioural insights to create win-wins for firms and their customers

Iain Gledhill, Single Financial Guidance Body

Max Mawby, The Behavioural Insights Team

March 2019

What is financial capability?

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“Financial capability is the ability to manage money well –both day-to-day and through significant life events.”

• Skills and knowledge, behaviours, attitudes and motivations, and connection to FS

• Key driver of financial wellbeing

• Low financial capability is a form of vulnerability

Financial capability is a national challenge

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9 million over-indebted

10.7 million not saving regularly

22 million don’t know enough to plan for retirement

An opportunity to rebuild trust

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Creating opportunities to riseBarclays

Helping Britain prosperLloyds Bank

Together we thriveHSBC

To serve customers wellRBS

The card in your cornerCapital One

To help people and businesses prosperSantander

The Financial Capability Lab

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The Lab challenges

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From challenges to solutions

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Ideas from the Lab for discussion

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Checkout Savings - Timely prompts to save at online or physical checkouts (P)

Savings Supporter - Saving using the power of social connections (Q)

Sidecar Savings - Saving automatically alongside your pension (P/Q)

Flexible Standing Order - A more flexible way to automatically transfer savings from your current account (P)

Cook and Save - Using emotionally engaging goals to encourage saving (Q)

Expect The Unexpected - Helping people to accurately judge the probability of experiencing costly, unanticipated events in the future (Q)

17 ideas tested across three challenge questionsOne: Building savings

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* P = Quantitative testing on Pedictiv platform / Q = Qualitative testing

Smarter Signposting - Using transaction data to offer guidance at useful and salient moments (Q)

Financial Guidance First Aider - Signposting to guidance from the workplace (Q)

Take Guidance and Win - Prize-linked incentives to seek guidance

Tell Us Once Integration - Linking into an existing service to offer guidance at a crucial time

17 ideas tested across three challenge questionsTwo: Getting help

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* P = Quantitative testing on Pedictiv platform / Q = Qualitative testing

Repay and Save - Helping people with unsecured debt by consolidating, accelerating repayment and then making the transition to saving easy and attractive (Q)

Card Controller - Adding behaviourally informed features to money management apps (Q)

Increasing Credit Card Repayments - Changing repayment interfaces to help people to repay more than the minimum amount (P)

Understanding Credit Cards Better - Providing simple, salient and timely information so that people understand the key features of their credit cards (P)

Offer Blocker - Blocking unsolicited offers of credit (Q)

Scarcity and planning - Helping people under pressure make simple plans to repay their debts quicker and more cheaply (P)

Improving Price Comparison Websites - Making behaviourally informed additions to PCW interfaces (P)

17 ideas tested across three challenge questionsThree: managing credit

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* P = Quantitative testing on Pedictiv platform / Q = Qualitative testing

Example Predictiv trial

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Increasing Credit Card RepaymentsInterface changes could drive significant effects

People often anchor on the first piece of information they see, regardless of whether it is relevant or helpful.

Minimum repayments on credit cards save people from spiralling debt but can also act as anchors, significantly reducing repayments and leading to large increases in interest charges.

Interactive sliders have been used widely – often for high cost short term credit.

Hypothesis: sliders can be re-purposed to help customers avoid excessive interest charges without removing the minimum repayment anchor.

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Increasing Credit Card RepaymentsOur slider

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Increasing Credit Card RepaymentsExperimental flow

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Increasing Credit Card RepaymentsSignificant increases in our online RCT

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Increasing Credit Card RepaymentsAnd significant reductions in anchoring effect

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Partnerships

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Partnerships – pilots and field trialsRunning to March 2021

We have been given funding for up to six partnerships by the SFGB. The projects agreed so far include:

• Repay and Save with major financial institution (pilot launched)

• Card Controller with Monzo (producing MVP)

• Smarter Signposting with a pensions provider (initial policy landscape review underway)

• Savings Supporter with a leading UK Fintech (launching in May)

• Discussions continue with several other leading FS firms

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Contact

Iain Gledhill, Programme Leadat the Money Advice ServiceE: iain.gledhill@moneyadviceservice.org.uk

Max Mawby, Programme Leadat the Behavioural Insights TeamE: max.mawby@bi.team

Thank you