What’s the problem?
Over half of the U.S. population is struggling financially. And in the UK, roughly 20% of the population doesn’t have enough savings to survive one month if their wages were to drop by just 25%. This is the reality in two of the world’s healthiest economies.
The unpredictability of income is increasing. More people are experiencing multiple forms of income; self-employment has been increasing since 2008. People move in and out of financial inclusion at different times, depending on life circumstances.
Conmen, complexity and confusion
Too many people are being slighted by mainstream services that weren’t designed for them.
The conventional wisdom is to blame poor people and their bad habits. They should save more, manage better, spend less. Rather than it being the fault of badly designed and confusingly explained products, people who are in debt are stigmatised. Plus, services that are intended to help (e.g. student loans or welfare benefits) sometimes end up doing more harm than good. So, what can we do about it?
People are often busy so they rapidly research and gauge how useful a product or service will be in terms of time, effort and consequence. Often these financial products are presented in complex ways with hidden Ts and Cs; the small print and traps it’s easy to fall into. Sky-high APRs, predatory, opportunistic payday or short-term lenders conceal hidden dangers. Making mistakes can be costly; getting benefits or payments late or wrong means penalties and cause a spiral into deeper debt. If people fall behind paying bills, they fall far behind and fast. Then the longer the debt lasts, the harder it is to climb out of it.
It’s not all bad news
There are some truly innovative services out there – in particular Toynbee Hall’s Money Mentors. In fact there are many organisations offering advice and support. But often, advisory services are complex to navigate, signposting to these services is confusing or simply too dense for anyone to be able to find what they actually need.
The opportunity: human-centred financial services
The technology to deliver complex networks, media and connections already exists. If we can do Facebook and big data – then surely we can simplify and improve complicated products and services to make life easier for ordinary people?
Technology combined with service design is a powerful opportunity to explore financial inclusion and make a positive impact. Rooting the process in customer needs and validating it through cycles of live action research, feedback and iteration is key.
What have we done so far?
- A week-long research sprint
- Established a collective ‘stance’
- Gathering evidence and fellow travellers
We want to focus on something specific in order to make a meaningful service prototype that we can test. New services and products that respond to user needs are ripe for innovation.
By Gill Wildman, Plot