A/B Testing Financial Inclusion

Posted in Projects

Rapid-fire ways of identifying the best innovations

Money, and how we interact with it, is changing rapidly. Digital financial services have seen a boom in recent years. With mobile money apps, e-wallets, and other tools flooding the market, customers can borrow, deposit, and pay more conveniently (and securely) than ever before. The global spread of digital money has also greatly increased access to financial products—and by extension, the formal economy—for many people who were previously excluded. With the help of low-cost mobile technology, financial service providers like banks, microfinance institutions, and mobile network operators can reach more underserved and low-income populations. Access can greatly improve the financial prospects of people traditionally reliant on more costly alternative services. But challenges persist. An estimated 2.5 billion people around the world still don’t have access to a simple bank account. At the same time, many bank accounts are dormant or aren’t used in the way they were meant to be, especially by those with the least.

In this context, ideas42 is launching a new A/B testing initiative to tackle difficult behavioral challenges around adoption and usage of digital financial services in the developing world. A/B testing is a quick and inexpensive way to test different versions of a product or service to see how small changes can have an outsized impact on consumer behavior. Using this method allows designers to choose different aspects of a digital financial product, like layout or content, quickly and rigorously test them on users, and compare the results to find out what works and what doesn’t for the target population.

We are offering behavioral design and A/B testing support to financial service providers in Sub-Saharan Africa and South Asia. We seek to better tailor financial products and services to customers’ real behaviors and financial decision-making processes. We’ll be working closely with financial partners to design and test low-cost, high-return design tweaks to address the behavioral bottlenecks that often prevent products from fulfilling their potential and providing a full range of benefits for customers.

Applying behavioral design and testing methods to existing digital financial services will enable us to improve existing customer outcomes and bring new customers into the financial inclusion fold. We’ll also be producing an open-source framework so that financial providers can apply our insights to their own work across different countries and contexts, positively impacting the lives of low-income people worldwide.

Interested in working with us or learning more about our A/B testing work? Send us a note at abtesting@ideas42.org