Consumer Finance in a Mobile Age: Methods for Researching Changing User Behaviour

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Generally, financial diary respondents are given a structured set of questions that record both qualitative and quantitative responses. Questions are generally designed to prompt respondents to report on both formal and informal financial activities and how these fit into the context of a participant's life. The diary format makes it possible to include creative ways for respondents to answer questions. This is particularly the case for self-reported diaries. Respondents can be asked to provide an array of low-tech or high-tech information types, including written answers, numerical answers, choosing from a scale, drawing pictures, generating maps, adding photos and videos, and attaching documents such as bank statements.

Tracking what instruments people use in the course of a week, month, or year provides valuable information about how people choose between financial instruments depending upon the time of day, location, and the activity they are undertaking. When tracked for long enough, it can also show how, when, and why people add or discard financial instruments from their toolkits. Are customers dissuaded because a new service has features they don't like? Or do they feel they already have something in their financial toolkit that performs a similar service? Examining people's entire financial toolkits over time gives us a chance to answer these questions.

Because financial diaries examine entire portfolios, they are an excellent method to investigate the effects of digitisation on consumer behaviour. As consumer finance goes digital, it is becoming more difficult to pinpoint what people do and why they do it. We know that people use a far wider range of services than just banks. We know that consumers are likely to benefit from greater choice. But digitization also presents new (or enhanced) challenges and risks. Will literacies (financial, technological, informational) become a greater challenge, as people have access to more information and services via devices? Where does fraud risk stem from, and who will be most affected? How will people expand their financial toolboxes, and why? Will they continue to use non-digital services, even if digital options are available? How will they combine tools from online and offline, formal and informal sources?

Case Study: Financial Diaries and Household Management – Alexandra Mack, a Research Fellow at Pitney Bowes, conducted a financial diary study as part of research into financial communications management in the United States. Mack was interested in how “financial communications” impacted financial management within a household. She had already used other methods, including interviews and scrapbooking, to collect data on financial behaviour. The financial diaries were an opportunity to dig deeper into some of the issues she had discovered, such as how financial management varies by life stage, and factors that impact attitudes toward new technologies for managing finances.

Mack's financial diary was conducted entirely online, using software called Revelation. Participants were able to record their diaries in their own time over the course of a week. They were required to log in to the site each day and complete a variety of activities. These included answering questions, keeping logs of some financial interactions, and having group discussions with other participants. They would also take pictures using their digital camera or camera phone and post them to the project site.


Figure 2. The online financial diary study asked people to upload photos of their financial management systems. This household used envelopes to store receipts for tax purposes. Photograph © Alexandra Mack.

Participants were asked to report every day on communications they received from banks and billers, as well as on financial interactions other than shopping. Other questions asked participants to discuss their use of mobile applications, practices around bill payments, and their experiences with fraud. In group discussions, participants were asked questions such as, “What annoys or bothers you most about your financial communications?”

Mack found the method suitable to draw a broad picture of people's financial behaviours, the products they use, and their financial communications. While not longitudinal, she was able to ask questions about changing practices and what prompted shifts in individuals’ behaviours. Because the interactions lasted over several days, Mack could query the subjects on different topics that might have felt disconnected if asked back to back in an interview. What began as a study of financial communications evolved into a larger project around financial management.

What can companies learn from Mack's experience? Like Portfolios of the Poor, Mack's findings show that people's financial behaviours are complex and dynamic. Her study provides insights into mobility by demonstrating that people's financial communications incorporate a wide variety of online and offline sources and media: shopping receipts, mobile apps, computers, letters in the mail, and so on. Some of these are not financial services per se, but are part of the supporting cast that makes transactions work. Her results show that understanding the impacts of digital finance require also looking at practices in the “analogue” world.

Object-Centred Interview Methods

In object-centred interviews, props are incorporated into a verbal interview with the goal of prompting conversation on particular topics. The interviewer may introduce objects, such as a product prototype or flash cards, or objects may belong to the interviewee, such as the contents of the interviewee's wallet or the devices they use for banking. These interviews may take place in people's homes or in public places (e.g., to learn how people manage money while on the move).

Object-centred interview methods are particularly useful in consumer finance research because personal and household finances can be complicate and messy, and focusing on concrete material objects can help people to recall their financial management procedures. People often have multiple income streams, combine incomes, or help manage the financial situations of family members. Business records may or may not be kept separate from personal finances. People rarely keep all their financial information in one place, and find it difficult to explain their financial management processes to others. When you ask people to show you their spreadsheets, credit cards, bills, mobile apps, and other financial instruments, it prompts them to remember how their own finances work. If we want to generate insight into what kinds of financial products people might need, then we need to know what they currently use, and we can only know this if we ask the right questions, in the right way.

Like financial diaries, object-centred interviews are useful to map out entire financial portfolios. But whereas financial diaries rely on verbal reporting, object-centred interviews allow the researcher to discuss the physical properties of objects. Benefits include eliciting conversation about how objects are used and why, prompting people to remember what products/services they use and how they use them, and assisting the participant and researcher to discuss visual, audio, tactile, and haptic aspects of objects. Consumers can show researchers what they do or don't like about a particular product or service, and can explain why they feel the way they do. Much has been written about “financial literacy” as a barrier to money management and technology adoption, but often people's reluctance has more to do with user experience, trust in the provider, a fear of facing their money head-on, or many other factors. Questioning interviewees about products they do like can elicit insights into what products features encourage usage. Conversely, questioning interviewees about products they don't like can shed light on whether there are design issues or other factors at play.

Object-centred studies also have many benefits for researching mobility in consumer finance. These days, there are few financial transactions that individuals cannot complete while away from home, using a combination of their mobile phone, bank cards, cash, store cards, and discount cards. When away from home, people use their phone to check their bank balances, transfer money, pay their friends, check in and out of public transport, and use an array of apps to make investments, shop, and so on. Some people still prefer to make purchases and do online banking using their computer rather than their phone, but my current “portable kit” research in the Netherlands (in its early stages) indicates that even when people are at home, they would rather use their phone to complete transactions than have to get off the couch and go to the computer. This example is somewhat ironic, because the mobile phone allows people to be less mobile rather than more (they can stay on the couch!). Yet it is the very mobility of the mobile phone that permits users to stay immobile. Material objects play a critical role in shaping new financial practices.

Case Study: Using and Studying Objects to Track Finances – Jofish Kaye from Yahoo Labs and his team in the San Francisco Bay area conducted a preliminary study with fourteen interviewees, aged 26-29, with incomes ranging from US$18,000 - US$150,000 per year. As described in their paper, “Money Talks: Tracking Personal Finances,” the team incorporated multiple object-centred exercises to try to piece together a picture of participants’ financial management.

Kaye and his team wanted to explore the range of ways in which people keep track of their finances. They devised an interview structure that incorporated a range of static and interactive objects,

including financial maps drawn by interviewees, financial calendars filled out by interviewees, index cards with text for interviewees to choose and discuss, the contents of interviewees’ wallets, guided tours of interviewees’ homes, and computers and mobile devices used for financial management.

Few of the interviewees had a comprehensive idea of their own financial situation. In fact, many reported keeping their financial information in their head—a location that is certainly not suitable for object-based interviews. As Kaye and his co-authors recount, “the most common tool that people used to keep track of the overall state of their finances was nothing at all. Even in cases where interviewees used computer programs, mobile device applications, excel spreadsheets, and paper-based accounts to track financial flows, they rarely tracked every aspect of their finances. For example, one photographer tracked her business expenses but not her personal ones, and a mother tracked her college-aged children's credit card use but did not track details of her own expenditures.


Figure 3. People typically carry an assortment of cash, cards and receipts. Photograph © Jofish Kaye.

Contrary to traditional economic schools of thought, the researchers point out that interviewees engaged in behaviours that seem “irrational” if considered from a purely financial perspective, but which make sense when other social norms and values are taken into account. They explain:

People make financial decisions based on their emotional, historical, familial and personal backgrounds in addition to financial considerations. (cited in Taylor and Lynch 2016)

Overall, this study indicates that people's methods of financial management are dictated by what is important to them, and may have little or nothing to do with optimal financial decision-making. When trying to understand people's financial behaviours, then, it is important to explore their motivations. For example, these days there are many tools for consumers to track their finances (such as Mint or Bill Guard), but few people use them. Why not? Kaye et al's research suggests that people's reluctance to use these tools is not necessarily irrational, even if it would bring them more transparency and visibility over their finances. But choosing new financial management tools, and learning to use them, entails transaction costs. It takes time to work out which tools are suitable and which providers can be trusted with one's data. It then takes longer to test out a tool, figure out if it fits with the household's financial flows and needs, and incorporate its use into everyday life. Why would a consumer take on new, specialized products if it just means one more thing to think about?

No matter how good financial management programs and apps are, consumers won't necessarily adopt them if they perceive other barriers to exist (e.g., transaction costs, trust, workflow). Object-centred interviews give consumers a chance not only to talk about the issues they face using their current financial tools, but also to explain why they might not use other tools, and show the researcher what kinds of stumbling blocks they encounter. This is critical because it helps us identify scenarios in which a “failure” to stay “up-to-date” is not a failure at all, but an expression of a preference or a practical choice. Seen in this light, the terms “early adopter” and “laggard” are misnomers. Rather, the laggards are the practitioners who refuse to understand the user's point of view and adapt our frameworks and methods accordingly.

Social Network Analysis

An interesting application of interview techniques is in the analysis of social networks. In social network analysis (SNA), interviews and surveys are used to collect data on networks, which can be analysed either qualitatively or quantitatively. Quantitative interview data can be used to map nodes and connections in social networks. The resulting visualisations are an excellent way to see clearly who is connected to whom, and whether a social network is open (loose connections) or closed (close ties among group members). Qualitative interview data can be used to explain what drives social networks. For example, interviewees can be asked to explain why particular connections exist, how they are maintained, and how they have changed over time. In other words, whereas the quantitative data tells the “what,” qualitative data tells the “how.” As anthropologist Sibel Kusimba explains:

Social network analysis is good because it reveals different kinds of social relationships. It also provides quantitative assessments in terms of size and number of ties. These can also become apparent through ethnographic interviews but SNA makes it clearer. We need both because the ethnographic interviews give context. It's also good to follow up SNA and do another study in a few years (or other appropriate time frame) because then you can see the social network change. (cited in Taylor and Lynch 2016)

Social network analysis is particularly useful for studying patterns of circulation, such as remittances, conditional cash transfers, gifts, and other forms of payments. It is handy for analysing mobile money transactions, in which users are often individuals who send and receive money for social purposes as much as for economic ones. It shows not only who is connected to whom, but also demonstrates how and why money moves across large geographic areas.

Case Study: Social Network Analysis of Money Circulation in Kenya – Sibel Kusimba and her colleagues conducted a study of mobile money in Kenya, where at least 60% of adults are unbanked. Mobile money was launched in Kenya in 2007 and is widely recognized as the world's most successful mobile money service. Kusimba and her team were interested in discovering how rural Kenyans were networked through mobile money and the reasons why they sent money. They wanted to find out whether common assumptions about mobile money—that it empowers individuals, stimulates entrepreneurship, and reflects rural-urban migration patterns—reflect Kenyans’ experiences of using mobile money services.

The team undertook research in rural Kenya in 2012. They conducted participant observation, research interviews, and survey questionnaires with more than 300 Kenyans, 80% of whom were farmers. They also conducted interviews with a smaller sample of Kenyans living in Chicago. The researchers carried out different kinds of interviews to elicit qualitative and quantitative data.

In-depth interviews provided background and contextual information about people's experiences, feelings, social lives, and economic practices. During interviews, the researchers drew up kinship charts. They asked interviewees to tell them to whom they had sent money in the last year and who had sent them money. For the quantitative part of the study, the team interviewed between 3-10 individuals from 14 families. Each interviewee was asked to name all of the relatives that they had sent money to, or received money from, in the previous year. Most interviewees had sent money to 5-9 people. Where possible, the researchers then contacted the individuals that had been mentioned, and approached them for an interview as well. They entered the resulting matrices into R, statistical computing software that can be used to draw social networks diagrams. They could then map out the directions and frequencies of money flow, and to understand the relationships that remittances mediated.

Kusimba and her team chose to ask people to list the names of people they had transacted with rather than the amounts of money they had sent. There were two reasons for this. First, people tended to be inaccurate in recalling quantities of money. Second, many people did not like to talk about money directly. This was especially the case with men who would organize large ritual ceremonies that could cost up to 26,000 Kenyan shillings. Whereas women would admit that they asked family and friends for financial assistance, men preferred to say that they had collected debts owed to them.


Figure 4. A visualisation of a remittance network in Kenya, generated by social network analysis. Photograph © Sibel Kusimba, Yang Yang, and Nitesh Chawla 2015.

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