Retail as a channel to improve customers’ Financial Health

Abstract

Recently, Deloitte, Nibud and ING conducted a study on financial health in the Netherlands. As a next step, the involved parties have taken the initiative by creating the Financial Health Index (FHI), a tool to measure people’s financial health via fifteen questions. Deloitte is searching for new channels that they could use to stimulate the usage of the FHI and other initiatives that could create a positive impact on the financial health of the Netherlands. The retail channel is an important financial health channel were customers make the actual financial spending decisions, and could therefore be a promising new direction. This lead to the initial research question of this project: ““Is the retail channel a feasible and impactful way to reach end-users for the FHI, in order to help them improve their financial health?“

Because of the newness and abstractness of the topic, a qualitative research study was conducted. Nine highly experienced professionals in the retail industry were interviewed, giving an understanding of retailers attitude concerning customers’ financial health, as well as a possible implementation of the FHI and other interesting initiatives. This showed that in order for retailers to contribute, the FHI might not be the best solution, mainly due to the privacy constraints, the lack of use cases and missing business case. It was found that in order to get retailers to contribute, it might be better to offer more generic financial health solutions, that do not include the profiling of customers.

Other existing initiatives were identified and analyzed, in the financial health domains “to loan”, “saving”, “spending”, “income” and “planning”. After a selection process and re-clustering, interesting clusters appeared. The requirements and wishes gained through the research showed that the area of “saving” seemed most promising to leverage the retail channel to improve customers’ financial health. In order to generate the biggest impact, it was chosen to focus on a retail saving program for Christmas, as “a lot of Dutch citizens struggle with financial health which increases in January, because they are not prepared for the extra retail expenses in December”. This was the problem statement starting the design phase.

In the design phase, a research into the simulation of saving behavior was done. Next, two design iterations were conducted. The first iteration included a user research, through two user questionnaires. The second iteration included co-creation sessions with retailers. The focus of the design phase was on gaining insights into the options and best solutions for the four most important design choices for the retail saving program. These were the “saving goal”, “user journey channel”, “business model” and “user saving process”.

The outcome is the “CareFree Christmas” initiative. This initiative allows customers to save for a specific retail product, while gaining a reward for their positive financial healthy saving behaviour. For retailers, this allows them to create a social impact by helping customers with their financial health, while at the same time increasing customer loyalty, purchase guarantee and a better cashflow.