Need to save more? Learn how to ‘unspend’

17 March 2017 ... min read Listen

17 March 2017

Would you save more if you knew how much your peers saved?

Researchers from the Think Forward Initiative say yes, and are developing an app to help. It’ll compare how similar people save and guide them to start “unspending”. People will set a concrete savings goal, receive suggestions based on their data, and then be rewarded along the way.

Ralph Hamers talks about some of the surprising TFI insights he learned over the past year.

This was just one of the things presented at the second Think Forward Summit in Munich on 15 March, where experts representing governments, academics, consumers, and the financial and technology sectors gathered to talk about better financial decision-making.

It’s all part of the Think Forward Initiative (TFI), a multi-year movement started by ING and partners (see box-out), conducting research to find out how and why people make financial choices, and then using what’s learned to develop actual tools that can help people.

“When you tell people to save more, they find it hard to find out what to do — the trick is to show them how to unspend,” said Marieke Blom, chief economist at ING in the Netherlands and part of the team that designed what they call the “social nudge” app.

“I truly believe people will change their saving behaviour once they know how much their friends save.”

Surprises unearthed

At the first Think Forward Summit last year, participants defined three areas where people experience challenges in their financial decision-making. These challenges gave birth to five projects, which participants were busy working on throughout the past year. Areas included savings, investment and retirement; budgeting, spending and borrowing; and financial literacy.

Besides the social nudge project, research this year unearthed other surprising things. Like, did you know that gaining or losing weight can be more impactful on finances than traditional things such as having a baby or getting married? Or that a computer can help predict if someone will default on a loan based on their social media posts?

“It’s great to see so many people excited about these concepts, especially as they’re coming from all these different disciplines,” said Michael Haliassos of the CEPR (Centre for Economic Policy Research).

“The next step is to see how we can use all this technology to influence behaviours of people in a positive way.”

From insight to true empowerment

Participants from each project presented both the research as well as the tool they designed based on the results. Speeches from innovative thinkers including Harvard Business School professor Michael Norton, “cyborg anthropologist” MJ Petroni, behavioural design expert Sille Krukow and Björn Weigel, co-author of “The Innovation Illusion”, got participants thinking.

The next challenge is to how to take TFI a step further the coming year.

“If you look at what binds us together, it’s our passion to ensure that people are making smart financial decisions, because smarter financial decisions in households leads to a better society,” said ING CEO Ralph Hamers.

“How do we go from insight to true empowerment? We still have to pass that test, starting today and continuing this year.”

Join ING’s reporter as he talks to some of the experts behind the Think Forward Initiative.

The Think Forward Initiative aims to turn research into tools to improve people’s lives by helping them make better financial decisions. It was started by ING with partners Deloitte, Dimension Data, Dell EMC, Microsoft and CEPR (the Centre for Economic Policy Research).

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