New research from the Competition and Consumer Protection Commission (CCPC) shows that savings behaviours improve when behavioural insights are incorporated into savings product design and marketing materials.
The research was carried out in response to an identified need to encourage short-term saving habits among Irish consumers to increase financial resilience against unexpected financial shocks.
Designed and analysed by the Economic and Social Research Institute and facilitated by Bank of Ireland in a research trial with real consumers, the CCPC has used the findings to develop a guide for financial providers on how they can encourage short-term saving habits and improve the financial well-being of their customers.
As a result of the research, the CCPC believes that altering savings application forms with ‘pledge tools’, interactive calculators and using infographics about financial shocks can support consumers in developing positive short-term savings habits.
The research suggests that applying behavioural science to customer communications and the design of application forms, a financial provider can increase the uptake of savings accounts by over 25%.
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As part of the behavioural research trial, customers were sent marketing emails with consumer-friendly infographics that illustrated financial shock statistics.
Customers who received these emails were 20% more likely to open a savings account than those who received standard marketing materials. The study’s financial shock emails and digital ads saw a click-through rate increase of almost 10%.
The ESRI’s research report records the greatest benefit among customers on lower incomes, who are most vulnerable to the negative effects of unexpected expenses and financial shocks.
CCPC chairman Jeremy Godfrey commented: “Every year most people face at least one unexpected financial shock – such as the need to spend money on repairing their car or their boiler.
“Building up savings as a buffer against the unexpected is important for financial well-being but many people who could save for the unexpected don’t do so.
“This ground-breaking research conducted by the ESRI, Bank of Ireland and the CCPC has shown that many more customers will choose to save for the unexpected if financial institutions use behavioural insights to design their marketing materials and their application process.
“We encourage other financial institutions to make use of this research so that more Irish consumers can weather financial shocks without going into debt.”
