Improving Financial
Well-being
A virtuous circle
of research
A virtuous circle through research
FairBanking would like to see a major change in the financial sector towards utilising research to develop products and services to improve customer well-being. Products in the retail financial services sector appear to suffer from low investment despite the considerable profits that have been made in the last 10 years. Investment has focused on reducing costs, payments systems and delivery channels. Investment in the products themselves to improve the well-being of customers seems meagre. This is particularly true for those customers who are on average and below average incomes.
We dream of a
day in which each
product has features
that would create
a greater sense
of well-being for
every customer
Hopefully, this report is sufficient to show that there is huge scope for improving products based on areas such as realistic targeting, creating incentives, overcoming procrastination, establishing a commitment and well-informed mental accounting (“thinking of money in pots”). These can help customers to have more control over their finances, not to acquire debt inadvertently and to increase saving.
As with car safety, it would be good to see a virtuous cycle of investment and periodic step change improvements in the products and services delivered to customers. The well-being of the customer should be at the centre of the offering in the same way as car safety has become a key customer need. Another analogy is research into drugs where the drug company will identify the patients that will benefit from using it. Detail is produced as to who should benefit from a product and who should be careful or avoid taking it.
A “kite-mark” may help inform customers of what is really good for them about a product, if they choose to use the features.