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Making Client Voice Part of the Design Process: Behavioral Insights Elevate Flexibility and Simplicity in Financial Health Tools

By ideas42 This post was adapted from ideas42’s blog. Even before the COVID-19 pandemic, many families across America were struggling to make ends meet. But they still have big hopes and dreams today, from getting a car to finding better job opportunities to buying a home. To achieve any of these goals, saving and credit-building…

Thursday, April 8, 2021
 Making Client Voice Part of the Design Process: Behavioral Insights Elevate Flexibility and Simplicity in Financial Health Tools

By ideas42

This post was adapted from ideas42’s blog.

Even before the COVID-19 pandemic, many families across America were struggling to make ends meet. But they still have big hopes and dreams today, from getting a car to finding better job opportunities to buying a home. To achieve any of these goals, saving and credit-building are two critical steps toward financial stability and self-determination. And at the current moment of societal upheaval, financial stability is not just nice-to-have, but vital.

ideas42 recently partnered with Capital One, which has established a unique collaboration with community-based organizations around the country to provide support on credit-building and savings as part of the Capital One Impact Initiative, which seeks to close gaps in equity, helping people gain better access to socioeconomic opportunity.

The partnership with ideas42 included Capital One associates engaging with community members via group sessions and one-on-one interactions, helping community members work on their financial goals:

 “I just hope I can go through this with success and get my own home and give…my kids something. A place where I can plant a fruit tree.”

 “I’m currently unemployed. I want to be able to get a car, and I want to live independently.”

 “I want a stable life, and credit scores help you get to that.”

Goals reported by clients in Capital One program

With such a broad range of goals, how can a program like this be designed with community members and their priorities at the center? Over the past few decades, classroom-based financial education programs have unfortunately proven largely ineffective, with limited exceptions. Often such programs prioritize sharing a wealth of information about financial management, but fail to provide the room for clients to apply that knowledge to their own situations, leverage clients’ collective expertise to overcome barriers, or take real actions toward their goals.

This is where behavioral science can help, by offering compelling insights on how to create a space for clients to identify, articulate, and plan out how to achieve financial goals of their own choosing. ideas42 and Capital One engaged in a hands-on, co-design process to incorporate four fundamental behavioral strategies into the program:

1. Personalize the goal: Research shows that self-set goals are more likely to lead to commitment and achievement. Setting a goal that is personally tailored to an individual’s circumstance has been shown to be effective in increasing student learning outcomes, among other areas. In the redesigned training, each client sets their own financial goal, identifies why this goal is important to them, and imagines what it will look like – and feel like – to attain that goal.

2. Focus on plan-making: Setting a high-level goal that is personally relevant is only the first step. Plan-making, or implementation intentions prompts — a behavioral science tactic which guides the individual through planning out the specific date, time, and location of an action — has effectively increased vaccination uptake, voter turnout, and savings contributions. A central feature of Capital One’s redesigned program is a map that asks clients to identify the various steps along the journey toward their goal. Along this journey, clients are prompted to write their next steps and the date, time, and location that they will take this next step.

3. Anticipate obstacles: Often goal-setting exercises begin with a visualization about what a positive future outcome might look like. Surprisingly, research shows that because positive visualization fosters a feeling of mental attainment, it can actually lead to reduced effort if conducted in isolation. However, an effective tactic is pairing positive visualization with “mental contrasting”: anticipating obstacles and planning out how to overcome them. Mental contrasting has proven an effective part of goal attainment across domains, including smoking cessation, exercising, and learning. In the redesigned program, Financial Access Educators ask clients to forecast what potential obstacles might get in the way of achieving their goal, and think through how they might overcome these obstacles. Both implementation intentions and mental contrasting can follow a simple but powerful formula of: if [cue], then [action].

Image source: ideas42

4. Maintain momentum: Setting a goal, making a plan, and anticipating obstacles are important steps to achieving one’s (financial) goal. However, even after these steps have been completed, actual goal attainment requires maintaining momentum towards one’s goal. Here, we leveraged a behavioral science principle known as endowed progress: where an individual is given encouraging information about their advancement towards a goal to increase motivation.

A client’s map after they have completed the first three steps, which occur during the training.
Image source: ideas42

Along with endowed progress, we built in reminders to maintain momentum after the session. Getting a reminder at the time that you intend to perform an action has been shown to increase follow-through on tasks across domains, ranging from higher education to healthcare. Clients track progress along their self-determined goal steps and are then prompted to set reminders for when they plan to take the remaining actions – ideally at a moment when the action can be taken right away.

Image source: ideas42

Clients bring expertise around financial management to any program–indeed, people with limited resources are experts at managing them. But to be effective, behavioral tactics and financial programs also require an essential ingredient: trust. An integral part of Capital One’s program is strong relationships with their communities and nonprofit partners. Through effective facilitation and discussion, Capital One associates encourage the sharing of collective expertise in the room. These relationships ultimately foster the kind of trusting environment that we all need right now – the space to stop, breathe, set a goal that matters, and get started on the first step.

“Financial empowerment isn’t just about information and awareness. We want to give people the tools they need to feel confident in their relationship with money, remove barriers and create channels to action,” said Kim Allman, Senior Director of Community Impact & Investment at Capital One. “We believe that finances should work for everyone, no matter where they are on their financial journey.”

ideas42 and Capital One have partnered together since 2019 and continue to work together as part of the Initiative which elevates collaboration with community-based organizations around the country to provide support on credit-building and savings with the goal of closing gaps in equity, helping people gain better access to socioeconomic opportunity.

*All views and endorsements expressed in this blog/article are solely those of the author and do not necessarily reflect the views or endorsements of the Financial Health Network.