why do you need behavioural design for financial services?
TRANSCRIPT
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Why Do You Need Behavioural DesignFor Financial Services?
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Internal External
“I know no one would use this product. Why Mr. Bong wants me to sell this product?"
“Who cares about them using the products? "
Behavioural Economics Plays a Key Role in Day-to-Day Decisions of People – But Do We Understand?
“Do banks take deposits below Rs.
500?”
“Goats and grains are my
financial instruments”
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(Seemingly) Irrational Behaviours that Impede Financial Inclusion Efforts• Why do depositors only w
ant to visit a bank branch with at least Rs. 500?
• Why a mobile money agent do not see value in customer recruitment unless incentivised?
• Why do low income people prioritise their current needs over future requirements for lump-sums?
• Why do migrant corridors exist?
MicroSave’s approach to studying irrational behaviour and identifying solutions is driven by MI4ID approach
• Why are formal financial services not often used by the mass market?
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The reference point of a value will vary by country. But service providers wanting to get sub $1 to $5 of savings, will have to break the existing reference point to which their customers are anchored.
Example: Why do low income depositors only want to visit a bank branch with at least Rs. 500?
Banks only accept
deposits above Rs. 500? What will they (the
bank) think of me if I go with anything below Rs. 500!
How Saving Is Influenced by Behavioural Biases?
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=
Example: Why are formal financial services not often used by the mass-market?
$50 $50
Losses loom larger than gains.
Savings at bank do not match benefits that purchasing a
cow offers…
Formal financial services lose out when it comes to fulfilling immediate to short term financial service requirements – primarily to shape income flows. Informal win because they offer immediate solutions – either meeting an expense or managing excess cash, and making it “work”.
Loss aversion explains why people choose local groups over banks to keep money. They avoid “loss of prospective financial support” from their community in the time of need.
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Example: Why Mobile Money Agents Do Not See Value In Customer Recruitment Unless Incentivised?Distribution does not buy-in into your service. They do not see any value for customers in it.
Why should I sell this product? I am getting better
margin for others?
Staff of BC MFIs in India tend to believe that people can not save a lot of money and they restrict customers to save a fixed small amount per day.
Incentives – well do they work in right spirit? For example, you may get enrolments but not intended usage.
I know no one would use this product. Why Mr. Bong wants me to
sell this product?
Providers benefit from registration, not me. I may
put in efforts to enroll a customer but what is the certainty that she/he will
come back to me.
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Example: Why Migrant Corridors Exist?
People from one source location often migrate to the same destination. Behavioural economics explains why this happens…
Status Quo: Many seasonal migrants return to the same place year after year as they know the potential employers, people and the facilities there. They do not make efforts to look out for other locations because of inherent inertia to not do so – also knows as status quo bias.
Identity: Comfort in connecting with known people and dependence on acquiring leads for work is actually an identity issue. People relate with similar people.
Social Proof: Migrating to the destination where others from the same community/geography have gone is more likely to yield employment due to hope of guidance from earlier migrants. This is a social proof which everyone looks for…
Examining Remittances Through A Behavioural Lens
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How Principles of Behavioural Economics Can be Applied to Financial Services?
Behavioural economics is an evolving science but it has already started to influence financial services. MicroSave’s MI4ID approach to financial services incorporates these principles into financial services design.
e-Pathshaala
Loan Officers' ability to communicate product concepts
User interfaces that suit customer references?
Designing an effective user interface
More gender responsive financial services?
Agent management and support services
Examining Micro Credit through the Behavioural Lens
Behavioural Insights in Insurance
Can “Behavioural Science” Bell Scheme Design Cat?
Insights from Exploratory Research on the Public Distribution System in India
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“Ideal end state”We believe in drilling down to exact behavioural change that our client envisages from our intervention – a new product or a modified communication strategy. In the project vision workshop, alongside our clients, we seek answers to our questions that help us nail this behaviour.
Research toolsRich set of qualitative research tools and rigorous quantitative research methods is a key characteristic of our research work. We are experts of qualitative and quantitative research methods and make sure that research design is the most appropriate for the objectives. Our analysis methods look at information through the lens of the behavioural sciences.
Concept distillation workshopThis unique approach to new idea generation balances left and right brain bias in a design process that drives service providers to think out of the box and with innovation and creativity. We have been successful in this approach as we understand service providers’ strategy while we identifying solutions/concepts that work!
Rapid prototyping 4 financial servicesTesting concepts and solutions with actual users in quick succession. Our vast experience in financial services ensures that we know how it is done well. We use MI4ID’s participatory and observation research tools both at the moment of decision and the moment of action.
Unique Features of MI4ID ApproachBehavioural Economics and User Centred Design – Opening up New Vistas in Research Processes
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How You Can Benefit From MI4ID?
Strategic Business Planning
Market/Consumer Research
Develop Product
Concepts
Marketing & Communicatio
n Strategy
ProgrammeEvaluation Product
Evaluation
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