In October 2018, IFF Research were commissioned by the Money and Pensions Service (MaPS) to explore how retail banking firms offering current and savings accounts, are trying to help customers improve their financial capability through their products and services, and how it’s understood and governed across the sector. Desk research was carried out on 19 participating providers, followed by face-to-face and telephone interviews with 42 respondents from across the retail banking sector. The study found that found while there exists a wide range of products, services and features that align to financial capability – the products themselves were often not designed with longer term financial welling in mind. Further, providers did not always recognise the full depth and breadth of opportunities to help customers improve their financial lives.
About the client
MaPS was established in April 2019, bringing together The Money Advice Service, The Pensions Advisory Service and Pension Wise. The overall goal of the organisation is to develop and co-ordinate a national strategy to improve people’s financial capabilities.
Challenges and objectives
MaPS want everyone to be able to make most of their money. Retail banks reach over 95% of the UK population so have a leading role to play in improving the financial capability of consumers.
MaPS were keen to understand what retail banks know and think about financial capability and whether the term is frequently used. As well as understand whether the banking products and services which support financial capability, were developed with this in mind.
With the support of MaPS IFF secured participation from 19 traditional banks and new digital providers. Initial desk research was undertaken to identify the products and services offered which could be helping to support and improve the financial capability of their customers.
Between November 2018 and January 2019 IFF conducted face-to-face and telephone interviews with 42 participants. Participants were from a range of different roles, primarily senior managers or directors within product development, communications or marketing.
The core objectives of the research were to explore:
How financial capability is defined and understood
Their approach to embedding financial capability
What products and services have the potential to improve financial capability and whether this was a driver of product designs
Whether there is a business case for improving financial capability
Alistair Kuechel presented a paper based on this study with Nick Watkins from MaPS at the 2019 MRS Financial Service Conference
The research identified that there was a recognition among retail banks that improving the financial capability of customers can bring a commercial value for retail banks. It provided valuable evidence to demonstrate to MaPS that progress is being made by providers to align products and services, but it also supported MaPS’ plans to help the sector develop further strategies to improve the financial capability of their customers.
Download this case study
Click to download the case study: Using innovation to improve financial capability in retail banking