Not Waving but Drowning
A few months ago at Plot we initiated a design-research & prototyping project around the topic of fairer finances. We kicked this off with a deep dive into the breadth of research available in this area — including Toynbee Hall’s and the Rowntree Foundation’s work on poverty premiums, the unbanked, and the underserved; as well as future-facing financial technology roadmaps. Four key framing insights from this work offer a new perspective —
INSIGHT 1: ADDING INSULT TO INJURY
The current financial environment is disabling for many — in particular for those on low-and-variable incomes — with a systemic lack of choices available. There are very few products designed around the real needs of this group of people, apart from ones that rip them off (high-interest payday loans), or that have currently marginal status and infrastructure (low-tech credit unions). And yet people are paying for this situation; paying out a poverty premium of around £1300 a year on average for access to mainstream goods and services.
INSIGHT 2: EXCLUDED BECAUSE UNDERSERVED
We found that the financially-excluded are highly engaged and active with their finances if and only if they have access to appropriately-designed financial tools/offers/environments. It seems to us that the standard financial industry offers & solutions available are simply not fit for purpose in this context. For example, regular Direct Debits don’t really help you if you are juggling time and income from zero-hours contracts. They don’t fit the circumstance. So for many years mainstream products have had the effect of systematically excluding a significant percentage of the population from full participation — these are the underserved.
INSIGHT 3: NOT STRUGGLING BUT JUGGLING
In our interpretation, there has been a misplaced emphasis from Government, Industry & some Third-sector stakeholders on literacy programs as a remedy for a supposed lack of capability amongst the financially excluded. This framing story is not strictly true — and furthermore is deeply stigmatising, disempowering, and disingenuous. The real stories – the dynamics of financial exclusion on the ground — are much more complex. People can move in and out of financial exclusion over time; a broken washing machine can trigger a spiral of financial challenges; a unexpected family circumstance can cascade out of control. From a user-centred design-research perspective we need to recognise people’s agency, not just their marginalisation — moving the story “from strugglers to jugglers“.
INSIGHT 4: THE RIGHT TIME TO RETHINK & REMAKE
There is plenty of scope for innovation. 2017/18 will bring a host of new financial product and service possibilities built on top of the new fintech regulatory infrastructure: instant payments; PSD2; Open APIs, and ‘Request to Pay’ provide new materials to craft multiple offers with. A new financial service ecology is emerging with a mix of old and new players. Will this finally respond to the latent needs of the underserved?
PROTOYPES NEEDED
At Plot we see an opportunity to redress the balance of power here and are currently beginning a prototyping phase supported by a grant from the excellent Paul Hamlyn Foundation to explore potential use-cases and dynamics at the ‘bottom of the pyramid’ of the domestic marketplace. Watch this space.