MetLife Foundation | Applying Behavioral Science to Improve Financial Outcomes
MetLife Foundation Annual Report 2015
Nonprofits and donors working in financial inclusion have devoted great attention to the issue of access: that is, to ensuring that more of the 2 billion people currently excluded from the financial sector gain access to financial services. And while access is necessary, it’s not sufficient to ensure long-term financial health. Behavioral science research from ideas42 found that people want to improve their financial health and often understand the steps they need to take. But they fail to follow through. Take retirement, for example. Despite significant expansion of financial access in Latin America, the majority of people do not save enough for retirement. Through their research, ideas42 discovered that short-term savings goals beat long-term ones, that people can’t visualize what their lives will look like after they stop working, and that they are rarely prompted to think about their retirement. In response, ideas42 designed a range of tactics, from automatic bank account deductions to individualized goal-setting exercises and public awareness campaigns. With support from MetLife Foundation, ideas42 will partner with local financial institutions to analyze the behavioral factors that might increase uptake of a broad range of products and services intended to improve financial health. They will share findings from institutions in Mexico and Chile to design and test more effective ways to help customers actually use financial products. Successful interventions could be a model for the whole region.
