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  • 15th Nov 2018

Monzo and the Financial Capability Lab: a new partnership to help people manage their spending

Making spending decisions in a hot coral state

It’s the Money Advice Service’s (MAS) Talk Money Week, and here at the Behavioural Insights Team we’ve been talking about our new partnership with the challenger bank Monzo. Together we’ll be developing and testing new product features to help people use the trademark hot coral card to budget and manage their spending.

Behavioural science has the potential to have an enormous impact on how people manage their money. One in four UK citizens is ‘financially squeezed’, with their finances so finely balanced that an unexpected bill could lead to problem debt as well as significant stress and anxiety. Through our Financial Capability Lab partnership with MAS, we’ve been designing ways to encourage people to control their spending, build a savings buffer, and become more financially resilient over time.

Testing ‘Card Controls’ with Monzo

One of the ideas generated in the Lab that we are particularly excited about is called Card Controller (see p.40-41 in the report). In that report we suggest giving people more power over the way they use their money by adding controls they can switch on and off. The new features could include things like letting customers decide if they want to make certain types of spending more difficult or letting them nominate a trusted person who can be notified and asked to approve certain transactions. For this partnership we will use these ideas to build on existing Monzo features. For example, Monzo users can already choose to freeze their cards with a tap of a button, or block gambling spending from their accounts.

Our new partners at Monzo are equally enthusiastic about this idea. Monzo wants to help its customers make better decisions, and they have already developed several features that are relevant for Card Controller. For example, Monzo users can set budgets and savings goals and receive feedback (such as notifications) about whether they’re on track to meet those goals. We decided to partner to develop and test new Monzo features that can make it easier for users to achieve their financial goals.

Monzo, MAS and BIT, through the Financial Capability Lab, are all committed to transparency and to sharing what works. We will rigorously test the impact of Card Controller, and will share the results of this research (whether we find it works, or not) so that other organisations and institutions that want to help people meet their financial goals can benefit and learn from our research.

What next

The partnership between the Financial Capability Lab and Monzo should set an example of how different types of organisations can come together to help people improve their financial capability. In the Financial Capability Lab, BIT and MAS continue to work together to set up other partnerships to develop and test different ideas from our report.

Would your organisation be a good partner? Get in touch

And if you do not represent an organisation, you can still contribute in an important way. Monzo’s standard practice is to ask their community to comment on ideas, share thoughts or feedback, and to ask for the things they think would make Monzo better. This work will be no different, and if you have thoughts about how we can help you meet your financial goals we encourage you to share those with Monzo. Who knows, you may just see your idea come to life.