ESRI Behavioural Research Unit contributes to CCPC research which shows how financial institutions can use behavioural insights to encourage saving habits

The Competition and Consumer Protection Commission (CCPC) has today launched findings from a behavioural research trial on consumer saving habits. The research was carried out in response to an identified need to encourage short-term saving habits among Irish consumers to increase financial resilience against unexpected financial shocks.

Designed and analysed by the ESRI’s Behavioural Research Unit and facilitated by Bank of Ireland in a research trial with real consumers, the findings show a positive increase in savings behaviours when behavioural insights are incorporated into savings product design and marketing materials. The CCPC has used the findings to develop a guide for financial providers on how they can encourage short-term saving habits and improve the financial well-being of their customers.

This behavioural study represents the first trial of its kind in Ireland and one of the first in Europe. Developed as a large-scale randomised controlled trial (RCT) with real consumers, the study examined the effects of behavioural science interventions on whether consumers open a savings account and engage in precautionary saving. The results of the behavioural research demonstrated how altering savings application forms with ‘pledge tools’, interactive calculators and using infographics about financial shocks can support consumers in developing positive short-term savings habits, which is an important part of financial well-being.    

The research shows that by applying behavioural science to customer communications and the design of application forms, a financial provider can increase the uptake of savings accounts by over 25 per cent. The ESRI research also records the greatest benefit among customers on lower incomes, who are most vulnerable to the negative effects of unexpected expenses and financial shocks.

As part of the behavioural research trial, customers were sent marketing emails with consumer-friendly infographics that illustrated financial shock statistics, for example; “6 in 10 people face an unexpected expense each year”. Customers who received these emails were 20 per cent more likely to open a savings account than those who received standard marketing materials. The study’s financial shock emails and digital ads saw a “click-through” rate increase of almost 10 per cent.

Professor Pete Lunn, head of the ESRI Behavioural Research Unit, said: “This research demonstrates the use of behavioural science to support better financial decisions. Many people find managing their finances and dealing with financial products difficult. We used the methods of behavioural science to design and trial some systems to help them. We are very pleased with the results, which recorded meaningful increases in household savings.”