How can an app help improve financial health? Spoiler alert: offering users sound financial advice isn’t enough!
CFI and the Microfinance Centre (MFC) in Warsaw are working together to build a smartphone-based tool to assist customers with gauging and improving their financial health.
As part of the project, we developed a simple financial health quiz that will serve as the foundation of the application, helping users not only assess their financial health, but also understand and decide on specific actions to improve it.
Last year MFC tested the quiz among the clients and staff of organizations partnering with its Borrow Wisely Campaign in Eastern Europe and Central Asia. Our lessons learned from this testing phase are informing our next steps as we continue to design and build the application.
We released a new brief, “Toward a Financial Health Tool for Consumers” that distills the results of the tests and shares our lessons learned up to this stage in the project. Here’s a quick overview of our findings.
Results: How People Responded to the Financial Health Quiz
We were pleased to learn that customers responded favorably to the test. They enjoyed taking it, considering it to be fun and easy. At the same time, they commented that it was eye-opening and helped them reflect on their financial situation. The value customers found in taking the quiz was perhaps all the greater because, as many reported, they have few sources of financial management advice (beyond friends and family) and few or no tools.
- Customers appreciated concrete, practical advice, particularly with regard to short-term money management. The tip to save the cost of five loaves of bread each month was especially popular.
- Instead of simply hearing what they “should” do in general terms, consumers want advice on “how” to do it.
- They also want help to prioritize among the many possible actions they could take. Too many tips can leave people overwhelmed and paralyzed, especially if their financial health is poor.
- It is important to provide positive feedback that encourages people to continue with what they are doing well.
- The quiz questions and content should be customized and refined to fit users’ financial literacy levels and local market contexts. In this case, test takers were confused by questions involving percentages.
- Users indicated that games, other quizzes, and memorable stories would help guide behavior and motivate ongoing engagement.
- The ability to print out tips, tools, advice, and a calendar for budgeting was suggested.
The Business Case for Providers
Providers see the development of a digital tool as an opportunity to improve two-way communication with clients and a chance to learn more about clients’ needs and financial behavior. With this information they may be able to offer better services and help customers improve their financial health. Providers would also be interested in having the app provide information to customers, such as account status, that could reduce the number of inquiries to which they would otherwise have to respond.
This project is part of a larger initiative implemented by Accion with support from the MetLife Foundation, Building Financial Capabilities and Strengthening Institutions through Customer-Centered Innovations. With regional efforts in Latin America, Eastern Europe, and Asia, the initiative includes designing digital tools and services informed by human-centered design, incorporating behavioral principles that spur product usage and empower clients, and enabling financial service providers to effectively leverage and utilize client data for continuous improvement.
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