Innovation in financial wellbeing

In the UK 11.5 million people have less than £100 in savings to fall back on and 9 million people frequently borrow money to buy food or pay bills. Being financially insecure can have a significant impact on people’s mental and physical health and society as a whole. With this in mind, and in light of the rising cost of living in the UK, what can behavioural science do to improve people’s financial wellbeing? 

Six years ago, we set out to develop and test promising new ideas to give people more security and control over their finances. We teamed up with the Money and Pensions Service to set up a bespoke Financial Capability Lab to help people build savings, get financial help and manage their credit. Over 6 years, we worked on 17 different ideas, and tested the most promising ones with over 130,000 people at a dozen companies. Here’s what we’ve learnt. 

Generating innovative ideas to improve financial wellbeing

In order to get fresh ideas on how we can help people better manage their finances, we ran a series of workshops with dozens of financial experts. These workshops were incredibly creative, generating 244 original ideas. Crucial to the success of these workshops were the following factors:

• Bringing together people with different types of expertise. We brought together experts in policy and regulation, financial services, charities, and foundations. This helped to produce a rich set of ideas that had not been used before in financial services in the UK.
• Clearly identifying the behaviours we wanted to improve. From the outset, we made it clear that we wanted to come up with ideas to help the financially squeezed. Participants were asked to address specific challenges in savings, credit and guidance.For example, they were asked, “How can we encourage working-age people who are just managing to build up a savings buffer to withstand financial shocks?” We spent some time discussing why these challenges mattered and explained how we would use the ideas to actually make a difference in the real world. This helped ground participants’ ideas and keep the discussion focused, while also giving a clear sense that we were working towards a clear and important goal.
• Providing clear guidelines and examples to facilitate the design of solutions. We used BIT’s EAST framework for behavioural approaches and presented examples of ideas that had been tried elsewhere. This allowed people to be creative and open.
• Fostering a collaborative discussion process allowed participants to express their views freely and creatively. We used ThinkGroup, a collaboration method used at BIT that allows participants to silently and anonymously contribute their ideas on a certain challenge without worrying about being judged.
• Prioritising the most promising ideas. At the end of the ideation workshops, we took all the 244 ideas generated and prioritised them based on their impact and feasibility. We selected 17 ideas which we tested using online experimentation and qualitative research. 

If we did the Lab again today, we would also invite product designers, data analysts, UX and service designers and engineers who could have helped us with digital innovations. We would also involve more people with lived experience of real personal financial challenges.

Working with partners to test your ideas

We used the results of our online experimentation to then select the most promising ideas to implement and test with partner organisations to improve their customers’ or employees’ financial wellbeing. Again, we learned a lot. 

• Keeping an open mind when looking for partners is key
  We spoke to dozens of organisations including mainstream and challenger banks, credit unions and building societies, large and small employers, pension providers, and financial wellbeing platforms. We found that it’s important to ask the following questions when recruiting partners:

• • Do the ideas match your partner’s strategic priorities? 
  • Does the partner have the capacity to see the project through? 
  • Do they have sufficient scale and a large enough customer or employee base to rigorously test the impact of the intervention? 
  • Is the organisation genuinely interested in trying out new ideas with you and are they flexible enough to introduce new features into their products or services? 

Partnerships also require backing from senior decision-makers and active engagement from those best positioned to implement changes (eg product design teams). 

• Be prepared to change your approach
  None of the ideas we tested were implemented as we originally planned. Our approach changed many times due to changing needs and priorities and findings from user testing. At the same time, we learned that it’s important not to compromise on key principles of the idea because it may impact its effectiveness.
• Start with the partner, not the idea
  Building partner buy-in for innovation and evaluation can be challenging, especially considering the costs and implementation challenges. We found that it’s best to identify the partner you want to work with, understand their priorities and then co-design the ideas. An idea is more likely to be implemented if it’s already a commercial or regulatory priority.
• Plan sufficient time for data sharing
  In order to test the impact of these ideas on people’s financial wellbeing we used customer data collected by our partners. This data is often personal and can be commercially sensitive. It was therefore important that we signed data sharing agreements with them which provided the necessary guarantees for the secure transfer and safekeeping of the data. These agreements often took a long time to negotiate. Planning plenty of time to iron out the data sharing details is likely to be key for similar projects to the Lab.
• Engage senior stakeholders to ensure success
  Some of our projects required substantial investments of time and effort from our partners, and occasionally, initial enthusiasm fizzled out. To ensure partners remained committed, we signed a Memorandum of Understanding with each of them, setting out roles and responsibilities. Setting up steering groups with the senior stakeholders in the project, with regular check-ins to check the project progress, was an important way to keep our partners engaged.

What We Found

There is no single idea that will transform financial wellbeing. While several ideas showed potential, no single idea was transformational on its own. We think this demonstrates the importance both of rigorous testing and of a comprehensive approach to financial wellbeing. None of the lessons learned through the Financial Capability Lab were obvious, and testing revealed many important opportunities and challenges we had not anticipated. These findings will ensure we don’t repeat the same mistakes. 

We are grateful to have had the unique opportunity to have worked with so many amazing partners and have explored so many promising ideas. We hope other initiatives will carry the work forward and build on what we have learned.

We are always looking for more partners to develop and test ways to help people manage their money better.Get in touch to discuss any potential projects, or to enquire about our excellent training courses.