1 money lives improving financial capability using behavioural science and ethnography
TRANSCRIPT
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Money LivesImproving financial capability using
behavioural science and ethnography
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Refining the definition of ‘financial capability’
This research intended to help the Money Advice Service understand how
context, environment, culture, seasonal changes and aspirations influence and
change peoples’ financial capability and behaviour.
Behavioural model
Rational model
Specifically, we were aiming to:
1. Understand financial behaviours
2. Refine the definition of financial capability
3. Develop interventions targeting gaps in capability
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Why ethnographic research?
•The key difference between ethnography and other qualitative approaches is its emphasis on observation.
• Analysis yields patterns of actual behaviour rather than reported behaviour
•Ethnographic studies are characterized by immersion into the lives of subjects, from hours to weeks to years at a time.
Ethnography is the description of specific human cultures and is the foundation of anthropological knowledge.
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Longitudinal research with 72 households
• 48 families took part in the study
• Each family was visited 4 times in 9 months.
• Half of these families were filmed, half were not.• Each visit lasted between 3-6 hours, amounting to over
1100 hours of interviewing and observation
• Included England, Wales, Scotland and Northern Ireland
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Longitudinal research with 48 participants
33 interviews in England9 interviews in Scotland5 interviews in Wales5 interviews in Northern Ireland
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Keeping Track
Making Ends Meet
Planning Ahead
What factors make up financial capability?
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Financial Capability: Beyond Skills & Knowledge
Skills
Knowledge
Opportunity
The level of knowledge and awareness needed to find, understand and evaluate information in order to make financial decisions.
An expression of the underlying beliefs that may influence behavioural intention and may also be influenced by social norms.
The brain processes that direct behaviour, including automatic (unconscious) and reflective (conscious and considered) mechanisms.
Factors that lie outside of an individual that may influence their financial behaviour. It includes both social opportunity (i.e. the networks they have) and physical opportunities (e.g. the area they live in or technology they have access to).
The emotional, cognitive and/or behavioural skills and capacity to engage in the necessary thought processes for financial management.
Attitudes
Motivation
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What were we looking for?
Capability
Behaviour
Opportunity
Motivation
Fishbein et al.“Factors influencing behaviour and behaviour change”
(Handbook of Health Psychology, 2001)
9Determinants of Behaviour
Susan Michie et (2011)The Behaviour Change Wheel
Implementation Science
10Anatomy of Motivation
• Controlled
• Effortful
• Rule-based
• Slow
• Conscious
• Rational
Reflective System• Uncontrolled
• Effortless
• Associative
• Fast
• Unconscious
• Affective
Automatic System
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Anatomy of Automatic Motivation
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Framework coded for financial capability outcomes
Behavioural Determinants Making ends meet
Conditions Mechanisms What to look for Enabler Barrier
Ability - defined as the individual’s psychological and physical capacity to engage in the activity concerned
Psychological
Level of knowledge, awareness, appropriate (emotional, cognitive and/or behavioural) skills and capacity to engage in the necessary thought processes such as comprehension, reasoning etc
This is about ability to perform - do they find it difficult or not?
Self- efficacy is also important - do they believe they can't do things?
Using tools to aid budgeting - online or using a spreadsheet/ book
Earmarking money for different outgoings - mentally or physically separating them into piles
Not aware that tools are available or not knowing how much they have at any given time.
No experience or confidence in being able to create own budget
PhysicalPhysical skill development which is the focus of training
Are they being limited by their body because they are disabled in some way?
Relates mostly to the old and infirm - do they have difficulty online or getting to banks in a rural location.
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Framework coded for financial capability outcomes
Behavioural Determinants Making ends meet
Conditions Mechanisms What to look for Enabler Barrier
Opportunity - defined as all the factors, social and physical, that lie outside the individual that make the behaviour possible or prompt it
Social
Afforded by the cultural milieu that dictates the way that people think, including the set of shared values and practices that characterize institutions and groups
Awareness being raised by people they know - this is about receiving information NOT action
Someone telling them about ways of budgeting or tools available
Groups of friends / peers that encourage you to spend beyond your means - on going out, buying gadgets they can't afford
Physical
The infrastructure or technology available for people, which can guarantee sustainability of the target behaviours
Level of access to services or products
High levels of choice and competition in local area. Are people 'living off the land' - e.g. Buying / selling things that they find, growing food, etc.
Lack of choice over where to buy products
Transport costs to shops/ banks
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Motivation - defined as all those brain processes that energize and direct behaviour, which includes reflective and automatic mechanisms
Reflective -usually targeted in interventions based on cognitive behavioural therapy or public policies that include information provision and economic incentives
Evaluation – usually based on information provision and incentives
WHY? - weighing up the pros and cons of something
Goal setting - including abstract long-term goals and short-term goals
WHAT? - thinking about the outcome you want to achieve
Planning - specifying where, when, and how to execute an action
HOW? - creating an action plan to achieve an outcome
Behavioural Determinants
Conditions Mechanisms What to look for
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Motivation - defined as all those brain processes that energize and direct behaviour, which includes reflective and automatic mechanisms
Automatic - predominantly influenced by the context - we do not think about these
Messenger - we are heavily influenced by who communicates information to us
This is about their decision to listen to or ignore something purely because of who has said it.
Incentives - our responses to incentives are shaped by predictable mental shortcuts such as strongly avoiding losses, hyperbolic discounting, and mental accounting
In the moment decisions based on perceptions of getting a 'good deal'
Norms - we are strongly influenced by what others do Desire to be like those around you
Defaults - we ‘go with the flow’ of pre-set options
Defaults are the options that are pre-selected if an individual does not makean active choice
Salience - our attention is drawn to what is novel
People are morelikely to register stimuli that are novel (messages in flashing lights), accessible(items on sale next to checkouts) and simple (a snappy slogan).
Priming - our acts are often influenced by sub-conscious cues
Sounds, sights and smells that draw us in or repel us.
Affect - our emotional associations can powerfully shape our actions
People can respond emotional to words, images and events and their mood can impact decision making
Commitments - we seek to be consistent with our public promises, and reciprocate acts
If you say you will do something you are more likely to do it.
Ego - we act in ways that make us feel better about ourselves
We tend to behave in a way that supports the impression of a positive andconsistent self-image.
Behavioural Determinants
Conditions Mechanisms What to look for
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Keeping Track
Analysis: --> 'Observations' (interview responses plus observational notes by the team)
--> 'Themes' (thematic analysis)
--> 'Framework' (COMB)
--> 'Barriers' (stats)
Observation: "AOMMF51: Never keeps track and doesn't remember all the things that she spends money on - though says that she remembers"
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Keeping Track
Making Ends Meet
Planning Ahead
Keeping Track
Knowing how much money you have available at any one time.
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What did we find?
Keeping Track http://vimeo.com/85435718
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What were the key barriers?
Keeping Track
Abilities
OpportunityMotivationsNo access to Internet
banking
No access to smart-phone banking apps
Social Norms
Default behaviour
High confidence use of mental accounting
Checking can have a negative emotional
impact
Financial illiteracy
Organisational skills
Email Reminders
Sense of control
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What were the key barriers?
Ability Mental AccountingPsychological Ability
Opportunity PhysicalOpportunity
p = .047
Physical Ability
Motivation
(Frequency = 23)
(Frequency = 9)
(Frequency = 18)
p = .144
(Frequency = 15)
(Frequency = 8)
Financial literacy
Social Norms
Default behaviour
Checking can have a negative emotional
impact
Reflective
Automatic
Social Opportunity
Lack basic literacy and numeracy skills
Mobility issues
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What were the key enablers?
Ability Organisational skillsPsychological Ability
Opportunity Physical Opportunity
p = .093
Physical Ability
Motivation
(Frequency = 28)
(Frequency = 15)
(Frequency = 28)
(Frequency = 25)
Technological skills
Social Norms
Default behaviour
Reflective
Automatic
Social Opportunity
(Frequency = 22)
Sense of control
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Checking: what do I have?
An intervention designed to increase participants’ knowledge and awareness of their balances.
• Participants were defeated by complexity of monitoring finances.• Finding opportunity
• Planning and memorizing information
• Retaining the information until next time.
• Reliant on mental accounting errors
• Those who did monitor had great organizational skills
• Used habit formation theory
• Given a planning sheet & credit-card sized record card
• Linked this process this to a pleasant activity.
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4. Checking: The Intervention
Those who did not complete the task:
• felt have enough of a buffer in accounts
• felt negative emotional impact
Those who completed the task:
• made them more aware of their position
• better able to live within their means by no
longer ending the month in overdraft
• accessed new checking services such as
online banking or banking apps
A credit card sized piece of paper to fit into a wallet / purse
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Keeping Track
Making Ends Meet
Planning Ahead
Making Ends Meet
Living within your means and not running out of money or exceeding your income.
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What did we find?
Making Ends Meet http://vimeo.com/85435717
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What were the key barriers?
Making Ends Meet
Abilities
OpportunityMotivationsAnchoring
Social RankSeasonal impacts –
work and events
Share offers
Unaware of budgeting techniques and tools
Use friends and families
Ego
Emotional hit
Social Norms
Share offers
Not keeping track
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What were the key barriers?
Ability Mental AccountingPsychological Ability
Opportunity PhysicalOpportunity
p = .000
Physical Ability
Motivation
(Frequency = 27)
(Frequency = 25)
(Frequency = 64)
(Frequency = 15)
Financial literacy
Social Norms
Affect
Ego
Reflective
Automatic
Social Opportunity
Lack basic literacy and numeracy skills
Mobility issues
Social Rank
p = .000
(Frequency = 55)
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What were the key enablers?
AbilityNumeracy skillsPsychological Ability
OpportunityPhysical
Opportunity
p = .002
Physical Ability
Motivation
(Frequency = 28)
(Frequency = 35)
(Frequency = 57)
(Frequency = 21)
Social Norms
Default behaviour
Reflective
Automatic
Social Opportunity
(Frequency = 22)
(Frequency = 26) Share offers with friends
p = .508
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Checking: what do I have?
An intervention designed to increase participants’ knowledge and awareness of their balances.
• Participants overweight social rank• Seek to increase social rank by spending
• Receive emotional gratification
• Reinforces spending behaviour
• Permit ego and affective mechanisms
• Substitute the associated costs
• Participants give blank card sleeve
• Wrote down things to avoid buying on side
• Wrote down substitutes for those things on the other side.
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Substitution – what could I have instead?
An intervention to encourage participants to curb areas of expenditure they found difficult to control by substituting them with similar, but less costly, purchases.
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Substitution: The Intervention
A personalised sleeve that folds around debit/credit card
Most used the tool and took pleasure in recording
their progress
Encouraged participants to take control of their
expenditure:
• begun to transfer the principles to other areas of
spending
• feeling of empowerment and in control of their
money
Depended on suitability of the alternative chosen
and timeframe substituted
• chosen alternative must give equivalent instant
gratification
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Keeping Track
Making Ends Meet
Planning Ahead
Planning Ahead
Thinking about the future and putting appropriate plans in place to help you realise your goals or cover the costs of future events.
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What did we find?
Planning ahead http://vimeo.com/85435716
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What were the key barriers?
Planning Ahead
Abilities
OpportunityMotivations
Making goals without plans
Optimistic about the future
Account ‘buffers’
Do not understanding financial products such
as pensions
Temporal Discounting
Tangible future
Use of friends within financial services
Risk averse
Reliance on parents
Sporadic employment
Financial knowledge
Investments in children
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What were the key barriers?
Ability Mental AccountingPsychological Ability
OpportunityPhysical
Opportunity
p = .000
Physical Ability
Motivation
(Frequency = 18)
(Frequency = 15)
(Frequency = 43)
(Frequency = 13)
Financial literacy
Evaluative
Goal-setting
Incentives
Reflective
Automatic
Social Opportunity
p = .170
Temporal Discounting
(Frequency = 10)
Financial network
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What were the key enablers?
AbilityNumeracy skillsPsychological Ability
Opportunity
Physical Opportunity
p = .000
Physical Ability
Motivation
(Frequency = 29)
(Frequency = 19)
(Frequency = 68)
(Frequency = 21)
Social Norms
Default behaviour
Reflective
Automatic
Social Opportunity
(Frequency = 48)
(Frequency = 20)
(Frequency = 26) Share offers with friends
p = .001
Evaluative
Goal-setting
(Frequency = 18)
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Checking: what do I have?
An intervention designed to increase participants’ knowledge and awareness of their balances.
• Motivational factors (automatic and reflective) were greatest barriers
• Reflective motivation were the greatest enablers
• Participants asked to set a financial goal
• Participants given a planner sheet to monitor financial goals.
• Asked to monitor on weekly basis
• Intervention promoted goal-setting and planning mechanisms
• Affective mechanisms encouraged participants – picture to represent their goal.
• Picture was linked to goal
• The budgeting tool was visually salient
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Planning - what’s my potential to save?
An intervention designed to encourage participants to work towards a financial goal with the help of a budgeting tool
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Planning: The Intervention
Empowered them and given them a
sense of control over their finances
Understood benefits of aggregating
spending in different areas
Became very conscious of spending
Visual features and use of colour was
appealing
More effective for working towards a
savings goal (as easier to visualise)
rather paying off debt
A spreadsheet that enables people to plan their expenditure and save
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Reframing - how should I think about my money?
An intervention aimed at encouraging participants to think about their incomings over different periods of time in order to prompt richer levels of evaluation and planning
around spending, debt and saving.
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Reframing: The Intervention
Participants who relied solely on benefits
seemed to take the most from the exercise
Prompted discussions about the
possibilities of returning to work
Made them feel more in control of finances
The longer-term figures were much higher
than expected and this encouraged thinking
how small weekly savings could add up
A poster to go on the fridge
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1. Identify desired outcomee.g. budgeting or savings
2. Identify the important features leading to different levels of financial capability
e.g. skills, knowledge, opportunity, attitude and
motivation
3. Use behavioural framework as a checklist tool to evaluate
potential interventions
3. Methodology for developing behavioural interventions
434. Develop hierarchy of intervention combinations to be tested in specific context
5. Testing to identify effectiveness of intervention
6. Adjust design of intervention for specific
population group if required
7. Implement intervention and monitor behaviour
change effects
