Low-income “banked” people may have access to financial products and services… but most of them do not make much use of these services, and much of the use is made improperly. As a result, these people do not benefit from the advantages of being part of the formal financial system. They are also excluded from digital finance, as they find the interfaces and navigation complex and user unfriendly. A lot of financial inclusion and digital financial education efforts around the globe are targeted towards people who are new to technology and perhaps new to the formal financial system. Many of these people belong to Oral segment of society. “Oral” people are not comfortable with written numbers, they also rely on mental calculation when it comes to any mathematics. Learning about them is critical for all of us who are working to make digital financial services work for financial inclusion.
Also, collaboration seems key. That’s why Metlife Foundation, Guia Bolso, Plano CDE, and Fundación Capital have joined forces in Brasil, conducting studies and pilot tests to develop insights and Human-Centric Design (HCD) based wireframes of digital financial education, so that it could lower barriers for the low income population and less iliterated segments as well. Together, they are launching a project that aims for a change in behavior regarding the use of existing accounts and the sustainable use of financial services.
How? By adapting a pre-existing personal finance application to better fit to low-income individuals (in large part recipients of social benefits), it will be specifically designed to attack the factors that hinder their relationship with the financial system.
The idea is to adapt a personal finance application – Guia Bolso – one of the most successful personal finance applications in Brazil, named after the organization that developed it. For the adaptation, and with the support of the Plano CDE , Metlife Foundation and Fundación Capital have carried out an investigation to better understand the experience of low-income users in the handling and understanding of the current Guia Bolso application. Main findings of this evaluation suggest that there’s little knowledge and a lot of suspicion about banks. Participants report difficulties in assuming financial control and planning expenses, however there is a demand for better forms of financial control, but they need tools they can easily manage and understand. Also, their main concerns about these kind of apps are related to security and phone memory. Participants do not feel very safe about inputting bank data in the app, and they do not like to overcrowd their phones with new apps due to limits of their phone memories.
With the feedback and results of this collaborative effort, the ongoing app is currently being adjusted to fit low income people characteristics and help them to better understand and easily control the state of their bank account, while making use of reinforcing financial education messages with the potential to:
- Increase users’ confidence in using their bank account, which could lead to an increase in the use of their simplified accounts and related services;
- Improve users financial capabilities so that they can make sustainable use of formal financial services and better control their financial lives;
- And improve their financial well being and the power to make good choices.
The new app is expected to be launched next May 2018.