Ting Jiang on How Better Financial Products Can Conquer Our Inner Homer Simpson

Pacific Exchanges

In episode five of Financial Inclusion & Beyond, we spoke with Ting Jiang, a behavioral economist who researches and designs products for behavioral change. At the time of this recording, which took place prior to the pandemic, Ting was associated with Duke University's Center for Advanced Hindsight.

We sat down to discuss the way behavioral scientists and product designers can work together to build better financial products that help people take action to improve their financial health. Key takeaways from the discussion include:

• Identifying the source of unhealthy financial behavior is a critical step for product designers or policy makers that wish to promote health. While financial literacy is often emphasized as a tool to help low-income populations improve their wellbeing, most poor people understand very well how to manage their money, but there may be other barriers that get in the way.
• Behavioral science-informed products can help people remember and act upon their good intentions (e.g. to save money or buy insurance) when the complexities and stresses of daily life might otherwise interfere. Technological and human interventions can help bridge the intention-behavior gap. These designs can appear simple but are effective in behavioral change.
• New technology can also help people better imagine their future selves and the potential unexpected shocks of life, suggesting actions to take right now to build resilience for tough times. The more concrete and tangible the future opportunities or stress scenarios feel to an individual, the more likely they are to take action.
• Improving the financial wellbeing of a subset of a population can lead to a win-win situation for the individual, their communities, and the financial system. For example, a financial firm helping urban migrant workers in China helps their communities and networks in rural areas, and in turn grows their potential client base.

Please note that the initial interview was recorded prior to the onset of the COVID-19 crisis.

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The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.