Nudging healthier financial behaviour

An interview with Perjan Duro (MoneyCoach), Garrett Meccariello & Tobias Nasgarde (Prospect Labs)
Posted on February 28, 2019

The Think Forward Initiative is excited to support the project "Nudging Healthier Financial Behaviour" of Perjan Duro, Garrett Meccariello & Tobias Nasgarde. Unique to this collaboration is the bridge between innovation and research. The three gentlemen are former contributors to the TFI Accelerator Growth Track (Duro - MoneyCoach) and the TFI Research Challenge (Meccariello & Nasgarde - Prospect Labs). In line with our purpose to connect experts, the TFI is thrilled that this year they combine forces and will make an impact together!

Read more about the project in the interview below!

Everyone knows they should save for the future and avoid difficult debt, but how many of us actually do what it takes to achieve that? Sensible financial management does not always come naturally and many people need a bit of help.

Enter researchers and developers Perjan Duro, Tobias Nasgarde and Garrett Meccariello. Brought together by the Think Forward Initiative (TFI) at its summit last year, the three men are seeking ways to “nudge” people to be more financially conscious.

Their project melds contemporary behavioural science and state-of-the-art digital technology with good old-fashioned grant funding from TFI.

“How can we impact people to take that first step and commit to a savings goal?” Nasgarde says of the project’s focus. “Then how do we get people to stick to that?”

The “Nudging Healthier Financial Behaviour” project, which is due to be completed in summer, has three phases.

1. Nasgarde and Meccariello, based in Sweden and the United States, respectively, are using their background in behavioural science to identifying six messages designed to persuade -- or “nudge” -- people into saving.

2. These will then be tested with real consumers on MoneyCoach, a personal finance app that has already had more than a million downloads. At the end, the message that is most effective will be rolled out more widely and permanently.

3. The idea is to discover not only how and why people engage in certain financial behaviours but also to identify actual ways to jog them in the right direction. TFI , in awarding the grant, said it was particularly attracted to the project because of its practical innovation and applied research element.

Perjan Duro (MoneyCoach) at the 2018 TFI Summit

“We want to really help our users with the research to change their financial behaviour,” Duro, founder and lead developer of MoneyCoach, says.

He knows of what he speaks. An Albanian who moved to Germany five years ago, Duro developed MoneyCoach out of his own experience of being monetarily strapped by the move and of needing discipline to manage himself back to financial health.

The app allows users to compare their income to their expenses and to set and achieve goals via budgets and daily reports on how much money is left after all fixed costs. This should show how much is available for savings -- but perhaps with a “nudge”.

“As quick payments become the default habit, people do not really think about their spending,” Duro says. “We want to make people conscious about their real net worth.”

In February, MoneyCoach was one of four new startups selected from an initial group of more than 100 to participate in TFI’s accelerator growth track, a tailored programme that helps those chosen to grow.

Tobias Nasgarde & Garrett Meccariello (Prospect Labs)

Nasgarde and Meccariello, working through their Prospects Labs company, bring both practical and research skills to the project. The two were selected in 2017 for the TFI Research Challenge to investigate whether it is possible to make people aware of unnecessary online purchases by using pop-up messages on browsers.

They discussed their findings on how to people could reduce unnecessary spending in a research report and at the 2018 TFI Summit.

On a more practical front, their Prospect Labs has been promoting a Chrome browser app called Quinn that does what their research investigated. Attempt a purchase on a website and a typical pop-up message might, for example, be: “You mentioned that you want to invest in the stock market. If you spend money on this website you will be less likely to reach your goal in the near future”.

How effective such messages might be is now the gist of the project with Duro and MoneyCoach. The messages being tested for efficacy will run from simply stating what someone should save to persuading them via various comparisons ( e.g., “You should save x percent” vs “People of your income group typically save x percent”).

“We need to know what is most effective to get you to actively save towards your goal,” Nasgarde says.

The answers will come. But then the real test begins -- in the consumer marketplace.

“The research won’t just be a PDF thrown on the internet,” says Duro. “It will be actionable!”