Our work at BIT is often associated with rigorous Randomised Controlled Trials (RCTs) – the ‘gold standard’ impact evaluation method. However, we know that RCTs can’t always be an option for an organisation or sector wanting to understand what works. They can be resource intensive and can’t be run for every challenge that would benefit from a more human-centred approach.
Luckily, we know that there are clear and applicable behavioural insights to be distilled from the large body of published evidence in the behavioural sciences. For example, small frictions can have an outsized impact on the likelihood of completing customer journeys, and simplifying key messages can dramatically increase click through rates in communications. In our advisory work, we combine this evidence with a strong understanding of the sector and specific challenges faced by organisations to develop top tips and recommendations to deliver rapid improvements to organisational processes.
This week, we published a toolkit in partnership with Fair4All Finance that followed this approach for the benefit of the community finance sector. Read on to find out more about our advisory work in action.
Background
As Fair4All Finance so clearly put it, “Millions of people are unable to access mainstream products and services others rely on to meet their financial needs. Without safety nets like credit, insurance or savings, everyday life events or financial shocks can tip people into vulnerable circumstances. Having to choose between going without essentials or turning to high cost credit or illegal money lenders has a huge impact on people’s physical and mental health. It can start a spiral into long term debt and limit people’s ability to properly participate in society.”
Fair4All Finance has a key mission to increase access to affordable credit. Credit unions and community finance providers can be a lifeline for people in financially vulnerable circumstances by providing affordable credit to those excluded from mainstream finance. However, not enough people benefit from the community finance sector due (at least in part) to low awareness and conversion rates. Our work has shown the power of applying behavioural insights to communications and customer journeys across many different domains.
To support the sector, Fair4All Finance commissioned BIT to improve customer engagement within the community finance sector with the help of evidence-based insights from the behavioural sciences. Our aim in this project was clear:
- to enable the community finance sector to strengthen conversion rates of eligible customers
- to enhance customer communications to improve the customer journey and increase loan collections, supporting both customer and organisational outcomes.
We worked with three community finance providers – two Credit Unions and one Community Development Financial Institution, or CDFI. Our process involved both an in-depth review of the relevant behavioural science literature and activities to build a detailed understanding of the context facing these organisations, including:
- Discovery workshops with each lender to understand their barriers to customer engagement
- Detailed desk reviews of customer journeys, drop-off rates and communications
- Tailored findings and recommendations for each lender, including co-design workshops to discuss recommendations
Testimonials from the lenders we worked with include:
“We have implemented a new set of communications thanks to your help.”- Head of Lending and Collections at a major credit union
“There were some really interesting insights and recommendations which I feel could be really beneficial for us.” – Business development manager at a major credit union
“Once again we just wanted to say that the research conducted by your team was insightful.” – Loan officer at a major credit union
Building on our work with the three lenders, and in partnership with Fair4All Finance, we have together published a toolkit to support the wider community finance sector. We have drawn themes and lessons from the customer journeys and communications we reviewed across the three lenders to produce generalisable top tips for applying BI to improve customer engagement, for example by reducing friction, helping people plan in advance, and simplifying key information.
Get in touch with us to find out more about BIT’s advisory services for community finance and other social impact sectors.
