Assisting to build internal behavioural economics capability
Based on a series of exceptionally successful projects with a major financial services provider over the past five years, the Applied Behavioural Economics (ABE) team has been working closely with stakeholders to continue achieving this success on a larger scale by establishing and guiding an internal behavioural economics capability.
The ABE team has continued engagement with this new team, assisting the members in increasing behavioural economic application across the organisation through a variety of projects. One such project was to design behaviourally informed financial education curricula to be taught in workshops. Another project focused on overhauling employer risk benefits, from the beginning of the risk lifecycle, where focus was on increasing the number of converted quotes, to the end of the lifecycle, where proactive return-to-work strategies were implemented to nudge employees to return sooner.
One project was in the financial products space where the ABE team helped reduce the high drop-off rates of new customers by decreasing the 90-day onboarding period to a 40-day process. Previously poor expectations management was addressed by training call-centre agents to use behavioural techniques, and designing supporting emails and SMSs that reinforced the importance of financial goals.
In another project, the joint team used behavioural insights and techniques to address high levels of disinvestment from long-term investment products. The project focus was threefold: decrease disinvestment, increase retention, and increase the overall customer experience over the entire customer journey. An A/B testing approach was adopted, splitting the call-centre agents into two groups and training only the treatment group with the new collateral, which included behaviourally informed scripts, emails, letters, SMSs and infographics.
Updating collateral, using behavioural economic insights and techniques, has significant impact on customers. In one project, email engagement increased from a base of 33% in 2018, to as much as 47% by early 2019. Thus, customers were far more likely to access financial products critical to their financial future nearly two months sooner. Using the A/B testing approach has shown similar impact: results from a project using this approach showed, on average, that customers exposed to behaviourally informed collateral disinvested 15.4% points fewer than their counterparts, equating to over R25 million being conserved. Agents in the treatment group of an A/B test saw a net promoter score increase of 7.9% points, on average, relative to agents in the control group.
To date, the joint team has completed a number of successful projects and continues to work on additional projects, with numerous business development opportunities in the pipeline.