tl;dr: Financial education is on our radar, and we propose testing a few new approaches to see what makes these concepts stick.
Recently, we were asked by a regional retirement savings company to provide input into what they might be able to deliver in terms of financial literacy. Our team actually worked on a few digital financial literacy solutions in Chile, so we were happy to share our thoughts. Plus, it’s a topic with utility far beyond academics. According to a recent OECD assessment, high performers in financial literacy are 72% more likely than low performers to save money, and 50% more likely to compare prices in different shops before buying something.
“An investment in knowledge pays the best interest.” – Ben Franklin
Despite these efforts, financial literacy remains elusive for many students. In the same assessment, roughly 1 out of every 5 students did not have basic proficiency in financial literacy, meaning that they are not able to apply their knowledge to real life situations involving financial issues and decisions. That figure more than doubles the developing country where this regional retirement savings company is located, and where the systemic deficiencies that drive this gap are more pronounced.
Given this status quo, it’s not unreasonable to state that the current approach to financial education isn’t working for everyone. One insight from our research is that the information is increasingly available inside and outside the classroom, so simply improving access isn’t the issue. Meanwhile, well-branded efforts to create traditional video and quiz courses, like the one our team worked on, do have a good track record of generating solid enrollment. However, we find that once the initial launch-related marketing buzz fades, the true challenge to financial education emerges – churn.
Observe, question, and test
High churn is often cited as the reason why many well-branded financial education tools are eventually retired from the marketplace, and it’s why many well-intentioned learners fail to reach basic or high proficiency. As our team revisited their work on financial education, we arrived at a few hypotheses we think are worth testing. The first is to explore if active learning exercises can increase engagement enough to keep learners coming back. It would also be interesting to see if overlaying them with gamification features like badges, leaderboards, and streaks can help replicate some of Duolingo’s learning milestones within the financial education space.
Timing might be what’s missing
Yet we think making the content more engaging is only part of the potential solution. Another hypothesis we’d like to test is if a platform designed around ‘just-in-time’ (JIT) learning can improve learning outcomes. JIT is an approach that provides knowledge and skills to learners when and where they are needed. This contrasts with traditional education that often involves scheduled sessions and rigid instructional pathways. In the context of a retirement savings company, that means providing relevant financial education at the precise moment that users are about to make a decision about, say, contributions or diversification. This approach allows the content to be delivered at the moment that users are particularly receptive to learning, and when they will be best served by making an informed decision.
Considering education as a feature
Broadly speaking, this means taking a “pull” approach to financial education. As such, we are also interested in exploring stakeholder willingness to embrace churn. Instead of lamenting learners who learn what they need to and go back to their day to day, we design for that. Interestingly, this would open the door to treating financial education like an embedded feature instead of a stand alone course. Users would be able to dive into learning games tied to the associated decision, and immediately apply what they learned to their own finances.
We hope to have the opportunity to test these hypotheses as part of future collaboration, and in that way make a positive contribution to the financial literacy of people in our community. If you have thoughts on delivering financial education or a live walkthrough of one of our activities, you can reach out to us here ([email protected]). We’d love to hear from you.
