Monday, July 20, 2020

Consumer Finance Research Methods Toolkit - 2020 Update

by Erin B. Taylor and Gawain Lynch, Canela Consulting

The Consumer Finance Research Methods Toolkit (CFRM Toolkit) presents cutting-edge approaches and methods being done across different sectors of finance. We give practitioners a starting point to think about how they can improve their research and prepare their organisations for the future.

CFRM Toolkit 2020

This toolkit was produced as part of the IMTFI’s Consumer Finance Research Methods Project. It demonstrates how different methods are being applied in finance research to help both for-profit and not-for-profit organisations cope with rapid changes in the sector. It is designed to help researchers and managers to:

  • Learn about innovations taking place in consumer finance research
  • Understand how to use research to improve their organisation’s strategy
  • Facilitate connections between researchers and organisations with complementary expertise

Just as consumers have an ever-increasing choice of financial products, researchers have an ever-increasing array of methods at their disposal. This Toolkit provides readers with inspiration for ways they can develop their research, either by themselves or in collaboration with others. Readers can choose to learn about applications that are familiar to them, or discover entirely new methods and professionals who practice them.

The CFRM Toolkit is intended for use by anyone who needs to adapt to the new global finance market:
  • Innovation specialists
  • Research and design teams
  • Organisations and companies
  • Individual professionals
  • Instructors and students
User insight specialists, designers, NGO workers, policy specialists, and academic researchers are among those who may benefit from the Toolkit’s descriptions of how different methods are applied to a wide range of problems around the world.

Whether you work in the field, in a lab, or at home on your notebook, this Toolkit covers methods that are relevant to your research context.

FOREWORD by IMTFI Director Bill Maurer

When the first edition of this Toolkit was released in 2016, I asked, in my prefatory remarks, “Why a consumer finance research toolkit, and why now?” I wrote mainly of the explosion in new payment, financial and insurance technologies being introduced into social systems and markets around the world, often with unintended consequences, and often with little forethought on the part of their developers as to how these new technologies would impact the human side of money and finance. 
While I could easily make the same case today, three years later, it is striking how some things have changed quickly, and others, not at all. “Fintech” is now a word, and a business and investment space. The term was still relatively new in 2016 (and it wasn’t used once in the first toolkit!). 

But payment is still … boring, despite all the hype and new technology “deployments.” How many readers of this report have used Apple Pay a few times only to abandon it because of its lack of general availability, ease of use relative to cash or cards, or force of habit? How many have re-adopted it since purchasing a smart watch? And how has the cost of such devices pushed new payment technologies ever further up the socioeconomic hierarchy, leading many at the bottom back to cash? 

Cash, meanwhile, has been under assault, even as its continued use makes it seem more resilient than ever. In countries like the US and the Netherlands, for example, more and more merchants have gone cashless and celebrate their status as such. Realizing the exclusionary impact of refusing cash at the point of sale, municipalities and some states in the US have been pushing back, banning cashless stores. Cryptocurrencies have reached record valuations, only to plummet again, firing up the speculative imagination as well as generating much-needed skepticism. 

On the horizon: artificial intelligence is increasingly being used to predict consumer behavior and price risk—and will potentially unleash new forms of discrimination and injustice. The presuppositions of the post-World War II liberal order are under assault and the regulatory frameworks guaranteeing fairness and accountability are being rolled back at a rapid pace, making more urgent than ever the responsibilities of the business community to ensure fairness, equity, and even financial justice.

Money and payment have opened up for political and social discussion as never before. Since the dawn of agricultural states in the ancient Near East thousands of years ago, accounts-keeping has been central to the allocation of resources in complex societies. You know something interesting is afoot when respectable journalists or government officials question the long run viability or existence of physical banknotes, or even state issued currency itself. In the United States, we have not seen such enervated discussion over the nature of money since the greenback/goldbug political conflicts of the late 19th century.

It is curious, then, that we still have to remind those working to create and introduce new money, financial and payment systems into the world that such systems are used by…. people! And people use them in systems that are simultaneously social and technological, systems that they use by choice or necessity to meet their basic day to day needs, while also using the technologies of money—from cash to Venmo to WeChat Pay—to make social connections, honor the dead, fulfill religious obligations, or make political statements. 

How people do money is often more significant than what money is, and the debates over what it is are almost always grounded in the ways that people use money and its associated technologies to get by and make do.

This updated toolkit provides a roadmap for a deep and nuanced understanding of the ways people do money, and the ways technologies are complexly integrated into existing sociotechnical arrangements. Approaching these questions requires guides to careful research, like the ones presented herein, and a small degree of hubris. 

The future is hard to predict—but it is surely a future of humans making meaning and social relationships with one another through consumer financial technologies and systems. The methods provided in this toolkit help us get a handle on how they do so, and to what ends. 

Access CFRM Toolkit 2020 at the following LINK

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