ACCION CFI launches report: "A Change in Behavior - Innovations in Financial Capability"

13 April, 2016

After over a year of research, the ACCION Center for Financial Inclusion (CFI) launches the report "A Change in Behavior: Innovations in Financial Capability" which is the result of a project funded by JPMorgan Chase & Co. The project has assessed the landscape of financial capability-building interventions across the globe, with a special focus on Mexico and India. Highlighting an industry trend in its early stages, the report explores innovations that focus on triggering positive customer behaviors, especially at critical decision-making moments, such as when signing up for and using financial products, or when putting money aside to meet savings goals.

The definition of financial capability is as follows: "the combination of knowledge, skills, attitudes and behaviors a person needs to make sound financial decisions that support well-being". This definition reflects an emerging industry view that focuses attention on behavior. Financial capability focuses on behavior change as well as the customer’s end state: financial health and well-being. This school of thought contrasts with traditional financial education, which has generally been more focused on the transfer of knowledge, skills, and information.

In CFI's assessment of over 100 innovations, seven behaviorally-informed practices have been identified that show great promise for application in financial capability-building:

  • Teachable Moments. Reach consumers when they are making financial decisions;
  • Learning by Doing. Let consumers practice using products;
  • Nudges, Reminders, and Default Options. Timely reminders and default options support good habits;
  • Rules of Thumb (Heuristics). Mental short cuts help turn learning into habit;
  • Make It Fun. Games and humor aid learning and retention;
  • Customize It. Tailor advice to an individual’s specific financial situation; and
  • Make It Social. Leverage the influence of peers and culture

"A Change in Behavior" argues that a major redeployment of resources is needed to ensure that the millions of dollars spent on traditional financial education interventions yield substantial benefits. Its recommendations include enabling financial service providers to take a greater role in building financial capability; engaging social service agencies, such as hospitals that provide financial counseling to families experiencing a health shock; and strengthening governments’ focus on shared responsibility among stakeholders.

To read the full article and access the report, click here

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