Developing systems to collect data & use it for

FC/IE Programmes:The UK experience

2016 IFIE / IOSCO Global Investor Education Conference

12-14 June 2016

Helen White Head of Financial Capability

The Money Advice Service (UK)www.fincap.org.uk / Enquiries@fincap.org.uk

AimofUKFinancialCapabilityStrategy

People:• Empowerpeopletomakethemostoftheirmoney• &navigatefinancialconsequencesofsignificantchanges&eventsthroughlife– bothplanned&unplanned

TheFinancialCapabilitySector:• Directfunding&resourcestoactivities&methodsthatevaluationevidenceshowsworkwellinimprovingpeoples’financialcapabilityØAhighlyeffective&coordinatedfinancialcapabilitysectorØMaximisingCOLLECTIVEIMPACT&returnoninvestmentacrossthenation

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(October)2015- 2025

Howwedefinefinancialcapability

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8.2mareover-

indebted10million can’treadtheirbankbalance

fromabankstatement20million adultscouldnotpayanunexpectedbillof£300fromsparecashorsavings

20million adultsdon’thaveanapproachtokeepingtrackoftheirfinancesthattheyfeelworks

16millionadultscan’tworkoutacalculationtoaddinterestearnedtoa

savingsbalance25millionadults

havenofinancialgoals35millionadultsdon’thaveasavingsbufferequaltothreemonths’salary

35millionadultshavenoplanforachievingtheirfinancialgoals

ScaleofthechallengeintheUK

Engagementisbiggest

challenge

BuildingFinancialCapabilityrequirescommongoals,

tools&measurestodriveCOLLECTIVEIMPACT

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Whydoesan“isolatedimpact”approachtofinancialcapabilitynotwork?

• UKfinancialcapabilityisnotimproving,despiteuncoordinatedeffortsbyover250organisations

• Withoutsharedstrategicgoals,coordination&leadership:littleincentivefororganisations(oftencompeting)toshareinformation&worktogether

• Factorsinfluencingfinancialcapabilityarecomplex&inter-connected– Isolateduncoordinatedactivitiesignorethis

• Resourceswastedonineffectiveactivities&duplication• Gapsnotidentified&filled

ØOneorganisation– ormanyisolated&uncoordinated–notabletoachievescaleofsocialchangeneeded

ØUncoordinatedresourcesachievepoorimpact&returnoninvestment

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5elementsofcollectiveimpact

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CommonAgenda/Goals

SharedMeasurement

MutuallyReinforcingActivities

ContinuousCommunication

Backboneorganisation

COLLECTIVEIMPACT

100+ 90+

50+ 60+

15+

Workingtogether

thousands

LEADERSHIPisneededtodrivecoordination,achievecollectiveimpact&returnoninvestment

• Takelongterm&holisticperspective• Buildwidespreadcommitmenttosharedstrategicgoals• Setoutroadmap forstrategydelivery,identifypriorities• Buildexpertise onfincap landscape• Identifylinkages,duplications&gaps• Collectdata,measure&communicateprogress• Build&shareevidence onwhichactivitiesachievegreatestimpact&returnoninvestment

• Encouragetargetingofresourcesbyallatactivitieswithprovenimpact,fillinggaps,minimisingduplication

• Maintainfocusonstrategicgoals&roadmap,inthefaceofcompetingdemandsforattention&resources

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KEYMESSAGE1:

COLLECTIVEIMPACTismoreeffectiveinovercomingthechallenges&achievingchangethanisolated,uncoordinatedimpact.ButCOLLECTIVEIMPACTrequiresleadership onstrategy&practicalapproachestodelivery.

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DATA&EVIDENCE:TheUKFramework

Data&Evidence

Framework

NationalFinCapSurveys

CompositeMeasuresofFinCap

TheoriesofChange

OutcomeFrameworks

EvaluationToolkit

IMPACTPrinciples

Research

EvidenceHub

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NationalSurveyoffinancialcapability• 2015Survey=baselinemeasureofUKfinancialcapability

• Largedataset• Nationallyrepresentativesampleof5,600adults18+

• 130questionstomeasureself-reportedfeelings,beliefs,attitudes,behaviours

• Surveytoberuneveryotheryear• Alsoplanasurveyofchildren,youngpeople,parents&teachers

• Consideringasurveyofolderpeopleinretirement

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8.2mareover-

indebted10million can’treadtheirbankbalance

fromabankstatement20million adultscouldnotpayanunexpectedbillof£300fromsparecashorsavings

20million adultsdon’thaveanapproachtokeepingtrackoftheirfinancesthattheyfeelworks

16millionadultscan’tworkoutacalculationtoaddinterestearnedtoa

savingsbalance25millionadults

havenofinancialgoals35millionadultsdon’thaveasavingsbufferequaltothreemonths’salary

35millionadultshavenoplanforachievingtheirfinancialgoals

Keyfindingsfrom2015survey

Insightsfrom2015Survey

• Mostpeoplemanagingrelativelywelldaytoday• Butfarfewerpreparingwellforfuturelifeevents• Helpingpeoplekeeptrackofmoneyday-to-dayisabuildingblockforsaving&preparingforthefuture

• Focusingpeopleongoalsforthefuturemotivatessaving

• Havingafuturefocusisimportant– weneedtounderstandhowtoencouragethis

• Skills&knowledgearelessofabarrierthanmotivation formost,butpocketsoflowskill

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Furtheranalysisofsurveyresponses• Tounderstandtherelativeimportanceofdifferentfactorsininfluencingfinanciallycapablebehaviours,&howtheyinter-relate.

• Allsurveyquestions/measurescategorisedinto4groups:ØWellbeingoutcomes– whatweideallywanteveryonetoachievethroughbetterfinancialcapability

ØFinanciallycapablebehaviours – thewaypeoplebehaveandtheactionstheytake.Thesecanbeinfluenceddirectly,orviaenablers/inhibitors.

ØEnablers&inhibitors– thingsthatmakefinancialcapabilityeasierormoredifficulttoachieve– i.e.knowledge&skills;attitudes& motivations;ease&accessibilityoffinancialservices.Weaimtoinfluencethese.

ØMediators – Thingsthatmakecapabilityeasierormoredifficult– e.g.levelofincome;children.Wecan notinfluencethese.

FINANCIAL WELLBEING

Current wellbeing

Longer termfinancial security

Debt measures

FINANCIALLY CAPABLE BEHAVIOURS

Managing money well day-to-day:

1. Managing credit use2. Active saving3. Keeping track

Managing and preparing for life events:

4. Building resilience5. Working towards goals

FINANCIAL ENABLERS & INHIBITORS

MINDSET

ABILITY

CONNECTION

4. Financial knowledge

5. Internet ease & access 6. Financial engagement

1. Attitudes to saving 3. Controlled spending

2. Financial confidence

CompositeMeasuresofFinancialCapability

Howwewillusethesecompositemeasuresoffinancialcapability• Wewilluseonlythe5behaviourmeasurestomeasurethesuccessoftheFinancialCapabilityStrategy:

• Managingcredituse• Activesaving• Keepingtrack• Buildingresilience• Workstowardsgoals

• Butwewillalsocollectdataon&monitorthewellbeing&enabler/inhibitormeasures

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KEYMESSAGE2:Youneedtobuildadata&evidenceframeworkthatwillprovide• acommonmeasure offinancialcapability&•evidenceonthewiderimpactsofgoodvspoorfinancialcapabilityi.e.whyshouldanyonecareorinvest

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TOOLS

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TheoryofChangeATheoryofChangeisaplanforsolvingaproblem.Helpsplanaproject&decidehowtomeasureitssuccessØStartbydefiningtheproblemyouwanttosolve&yourgoal(howyouwillknowtheproblemissolved).Ø Mapoutallchanges(orOutcomes)thatneedtohappenØHelpsyoudecidewhattodo &whattomeasure – toprovewhetheryouhaveachievedthechangeyouexpected/wanted

OutcomesFrameworksOutcomesyouwanttoachieve

Indicatorsoffinanciallycapablebehaviours

Questionsthatcanbeusedpre- &post- actiontomeasuretheimpactofanactivityonfinancialcapability

FINANCIAL WELLBEING

Current wellbeing

Longer termfinancial security

Debt measures

FINANCIALLY CAPABLE BEHAVIOURS

Managing money well day-to-day

• Managing credit use• Active saving• Keeping track

Managing and preparing for life events

• Building resilience• Working towards goals

FINANCIAL ENABLERS & INHIBITORS

MINDSET

ABILITY

CONNECTION

Financial knowledge

Internet ease & access

Financial engagement

Attitudes to saving

Controlled spending

Financial confidence

EvaluationToolkit

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EvidenceHub

EvidenceHubbringstheevidenceonwhatworkstogetherinoneplace

Translates it for non-

researchers

Features an easy to

understand ratings system

Quality assured by

the Personal Finance

Research Centre

KEYMESSAGE3:

Youneedtobuildevidencetoidentifywhatworks– i.e.activities&methodsareeffectiveinimprovingfinancialcapability–&willachievemaximumimpact&returnoninvestment.

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MAS‘Whatworks’grantfund• £7million fund tobeawardedasgrantstobuildevidenceonwhatworksinimproving financialcapability

• Allprojectsmustrobustlyevaluateimpactusingapproach&toolscreatedbyMoneyAdviceService

• AllfundedprojectsmustshareresultspubliclyviaMASEvidenceHub

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3typesofprojectstobefunded:1. Existingfinancial

capabilityinterventions:Evaluateimpactonusers,effectivenessinimproving financialcapability

2. PotentialtoScaleup:Evaluateextensionofexistinginterventions-alreadyproventobeeffective,- todifferenttargetgrouporwidergeographicalarea

3. Newapproaches:Develop,pilot&evaluateimpactofnewideas

• Will telluswhatimpactdifferenttypesofactivities&methods financialcapability&behavior,&howbigtheimpactonindividuals

• Butmoreworkneededtomeasurethevalueoftheimpact,relativetocosts,todeterminereturnoninvestment

KEYTAKEAWAYS1. COLLECTIVEIMPACTismoreeffectivethan

isolateduncoordinatedimpact– Butrequiresleadership.

2. Buildadata&evidenceframeworkthatprovidescommonmeasuresoffinancialcapability&evidenceonwhyshouldanyonecareorinvest.

3. Buildevidenceonwhatworks &willachievemaximumimpact&returnoninvestment.

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