Productlinked Financial Education: Evidence from a Masterclass

The intervention is a marketing campaign that aims to inform and educate treated users on how to adopt mental accounting with the bank's features to manage their financial health.

More specifically, the marketing campaign will last five weeks and consists of various emails, in-app messages and push-notifications. In the first week, customers will be educated about the four elements of financial health (i.e., Day to day, Rainy day, Goals and Confidence (see United Nations Finance Initiative for reference)) via an email, two in-app messages and a push-notification and are redirected to a blog post on financial health in case they want to know more. In the second, third and fourth week customers will be educated on how to use sub-accounts, automated transfers and the bank's app-settings to adopt mental accounting to manage their financial health via emails, in-app messages and push-notifications and are redirected to the respective feature in case they want to implement what they have learnt.

In more we recommend the following to treated users in weeks two, three and four: For the Day to day element we recommend to create a sub-account for Needs and a sub-account for Wants to separate corresponding expenses on needs (e.g., rent, groceries, etc.) from expenses on wants (e.g., restaurants, clubbing, etc.). Second, for the Resilience element, we recommend to set up a Rainy Day sub-account to effortlessly handle unexpected expenses that break ones budget (e.g., new laptop, car repair, etc.). Third, for the Goals element, we suggest to think about short-, and medium-term goals and create sub-accounts for them. Fourth, to become financially confident we suggest to implement the financial plan outlined above right away and review it regularly. Additionally, we recommend to use automated transfers to allocate funds, i.e. budget and save, to the respective sub-accounts automatically every time income is received. Finally, we recommend to use the "swipe transactions" setting to automatically assign expenses on Needs on Wants to the respective sub-accounts and thus enforce the budget allocated with the automated transfer.

In the last week treated users will receive a summary of the whole campaign via an email, two in-app messages and a push-notification and are redirected to another blog post in case they want to know more. The marketing campaign is rolled out to a random subset of users (treatment group). The control group does not receive any intervention.

2022-11-01

2022-12-04

In general the key outcome of interest is if and how the intervention changes a customers's overall income, spending and saving behaviour compared to the control group. To investigate this we observe in-app behaviour such as usage of main- and sub-accounts, saving goals for sub-accounts, and automatic transfers to sub-accounts. Moreover, we also observe financial behaviour such as financial transactions in the main- and sub-accounts. This way we can observe if and to what extent customers adopt mental accounting principles and how this impacts their income, spending and savings behaviour.

Moreover, customers in both the control and treatment group receive a survey eliciting their subjective financial health according the the Consumer Financial Protection Bureau, financial literacy, app usage and some personal information. Please see Complementary Survey in Docs & Materials for the survey questions.

Subjective financial health, or the financial well-being score will be constructed from five survey questions. See CFPB financial well-being scale in Docs & Materials for further information.

In general secondary outcomes of interest are if and how customers engage with the marketing campaign itself. To investigate this we observe in-app behaviour such as clicks on in-app messages and logins. Moreover, we will also observe how customers engage with emails, push-notifications and blogs on the company's website.

Does a consumer’s financial health increase if he/she engages in explicit mental accounting? To answer this question we run a field experiment together with a mobile bank. Treated customers will be informed and educated on “How to manage your financial health using sub-accounts” in a five week marketing campaign. More specifically, they will be will be informed and educated on how to use sub-accounts to manage everyday spendings and savings, how to use automated transfers to budget and save automatically and how to use specific app-setting to further adopt mental accounting. After the campaign we observe customer's objective and subjective financial health to investigate (i) if customers who were exposed to the campaign are more financially healthy than customers who were not, and (ii) if customers who explicitly adopted mental accounting, e.g. are using sub-accounts to manage their finances, are more financially healthy than customers who do not.

The randomization is done in the office by a computer.

The unit of randomization is at the individual level.

No

There are no planned clusters, as the unit of randomization is at the individual level.

The planned number of observations is between 100,000-200,000 bank customers. Background is that the sample size depends on the time and date of the sample selection which is executed by the project partner just a few days before the intervention.

Accordingly, the planned sample size by treatment arm is between 50,000-100,000 bank customers, i.e. 50,000-100,000 bank customers in the control group and 50,000-100,000 bank customers in the treatment group.

The minimum detectable effect size on the 10% significance level for our main outcomes are the following: Increase in usage of sub-accounts: 0,13-0,18%, 0,3464 (standard deviation) Increase in usage of goals for sub-accounts: 0,13-0,18%, 0,3464 (standard deviation) Increase in usage of automatic transfers to sub-accounts: 0,05-0,07%, 0,1386 (standard deviation) Increase in money saved in sub-accounts: 1,63-2,31€, 444,00€ (standard deviation) Increase in subjective financial health: 0,35-0,49 points, 21 points (standard deviation) Please note that the values are based on results from previous marketing campaigns and surveys run by the project partner. See Power Calculations in Docs & Materials for further information.