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Monzo, the Money Advice Service and the Behavioural Insights Team partnership

Press release: Monzo, the Money Advice Service and the Behavioural Insights Team partner to use behavioural science to help people manage their money better

Thursday 15 November 2018

  • Monzo will work with the Financial Capability Lab, a partnership between the Money Advice Service and the Behavioural Insights Team, to use behavioural insights to give people more control over their money
  • The digital challenger bank will develop card controls to help customers work towards financial goals and set limits on their spending
  • The partnership has been announced during Talk Money Week, which aims to improve the financial wellbeing of UK consumers and get more people talking about personal finance.

The UK’s Financial Capability Lab, a collaboration between the Money Advice Service and the Behavioural Insights Team, today announced a partnership with mobile-only challenger bank, Monzo, to develop new technologies that increase the financial wellbeing and capability of UK consumers.

The Money Advice Service and the Behavioural Insights Team created the Financial Capability Lab to generate and rapidly test new, behaviourally informed ideas to solve some of the most important money challenges facing people in the UK.

Working with public, private and charitable partners, the next step is to develop the most promising of these ideas into field pilots, building the case for new, effective products and services at scale.

Behavioural biases can lead many people to spend more than they have or more than they’ve budgeted. To help people control this ‘discretionary spending’, The Financial Capability Lab suggests:

  • Helping consumers to set spending goals – setting goals with clear deadlines mean people are more likely to achieve them
  • Letting people know their progress towards those goals – regular feedback on progress can help people keep track of their spending
  • And letting them set and remove limits on their spending – setting limits adds friction, which can make people think twice before spending.

Monzo will work with the Financial Capability Lab to put these ideas into practice. The aim is to give people more power over the way they use their money, by adding controls they can switch on and off. The new features and improvements could include things like letting customers set and work towards goals, or nominate a trusted person who can be notified and asked to approve certain transactions.

These card controls will build on existing features currently available to Monzo customers, who can already choose to freeze their cards with a tap of a button, or block gambling spending from their accounts.

Read the Financial Capability Lab’s report and the full list of recommendations.

The announcement was made during Talk Money Week, a public awareness week designed to reduce the stigma around money and improve people’s money management skills.

Sarah Porretta, UK Financial Capability Director from the Money Advice Service commented: “With over a third (39 per cent) of adults not feeling confident managing their money and an additional 12.9 million people without savings to fall back on, it’s vital that support services and businesses work together to build up the financial capability of consumers.

“We are delighted to launch this initiative during Talk Money Week and help Monzo build on the work they already do to grow the money confidence of their customers. The new initiative will help consumers gain even more control over their savings and budgets by setting short and long-term financial goals. With the huge number of customers now using technology to manage their money, this is a fantastic opportunity to work with Monzo to apply behavioural science learnings from our financial capability lab to help people to make the most of their money.”

Elisabeth Costa, Director of Consumers, Economic Growth and Energy, at the Behavioural Insights Team said: “We are delighted to partner with Monzo and draw on our world-class behavioural insights expertise to inform and build new capabilities that can help Monzo customers and millions of people build their money confidence and manage their money better.

The partnership is a great example of how we can bridge the gap between academia, policy making and business to develop products and technology that can make a real difference to the financial capability of consumers. We hope that other financial services providers take note and look at ways to continuously innovate and evaluate their effectiveness in helping customers.”

Stuart McFadden, Head of Financial Difficulties at Monzo, said: “At Monzo, we’re on a mission to make money work for everyone. And that means helping people achieve their financial goals. We’re looking forward to harnessing the skills and experience of the Money Advice Service and the Behavioural Insights team to inform and develop new ideas that will help people manage their money.”

For more information on Talk Money Week visit https://www.fincap.org.uk/en/articles/talk-money-weekopens in new window

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For media enquiries contact:

● Lewis Rogers on 020 3855 0371 or Press.Office@moneyadviceservice.org.uk

● Dan Thompson at Third City on 0203 657 9773 orMAS@thirdcity.co.uk

About Talk Money Week

Talk Money Week is a new public awareness week from the Money Advice Service to help encourage more open conversations about money. Held from 12-18 November, the week is designed to increase financial wellbeing among Britons by encouraging them to discuss personal finance issues including savings, debt, using credit, financial education and retirement. During Talk Money Week, the Money Advice Service and its partners will be hosting events and activations across the UK designed to encourage more money conversations, provide tips and ideas for saving, budgeting and increase financial wellbeing. Talk Money Week is a key initiative of the Financial Capability Strategy for the UK.

About the Money Advice Service

The Money Advice Service is an independent organisation. It gives free, unbiased money guidance online at moneyadviceservice.org.uk or via free phone on 0800 138 7777. It also manages the delivery of Debt advice across the UK, which is provided through a variety of partners. The Service was set up by Government and is paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority. Its statutory objectives are to enhance the understanding and knowledge of members of the public about financial matters (including the UK financial system); and to enhance the ability of members of the public to manage their own financial affairs.

About the Financial Capability Lab

The Financial Capability Lab was created in 2016 as a partnership between the Money Advice Service, the Behavioural Insights Team (BIT) and Ipsos MORI. The Financial Capability Lab uses world class behavioural insights, developing technology and policy to generate and rapidly test new, behaviourally informed ideas to solve some of the most important money management challenges facing people in the UK.

About Monzo

● Monzo is the UK’s biggest digital challenger bank, with more than 1,000,000 people using Monzo to spend, save and manage their money

● With 20,000 new customers joining every week, it accounts for 15% of all new current account openings in the UK

● Customers have spent more than £4 billion through Monzo so far

● The company was founded in February 2015, received its full banking licence in April 2017, and is authorised by the UK PRA and regulated by the PRA and FCA.

About the Behavioural Insights Team

The Behavioural Insights Team (BIT) is a social purpose company. BIT was mutualised in 2014 and is part owned by the Cabinet Office, Nesta (the innovation charity), and its employees.

BIT started life inside 10 Downing Street. Since then, BIT has expanded globally, with offices in New York, Sydney, Singapore and Wellington.

BIT works to:

  • make public services more cost-effective and easier for citizens to use
  • improve outcomes by introducing a more realistic model of human behaviour to policy, and
  • wherever possible enable people to make better choices for themselves.