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

ABOUT THE CFRM TOOLKIT
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.

WHO IS THIS TOOLKIT FOR?

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. 

“Capitalism is so much easier!”— Learning savings through playing a board game

By Farah Qureshi and IMTFI/Loy Loy Team at UC Irvine in the Geek Anthropologist

Loy Loy: The Savings Game in Washington D.C.!

Staging of Loy Loy at the AnthropologyCon Salon in Washington DC

Julia had been waiting until the last round to take her pot of money from the others. She was trying to get 50 Loys from every player to buy the coffee cart for extra income. After passing the star square it was savings group meeting day. She bid 50 and each player was obliged to give her the money, but the request was met with resistance. Earlier in the game, Chris had threatened to leave the savings group when Julia did not lend him money to buy a pig. Her high bid was a gamble completely depending on the players’ solidarity, so she held her breath while Chris’ deliberated his options. While playing, they had all learned that trust was crucial to the game, but she also knew he would not survive long alone. In the end, Chris resentfully handed over his 50 Loys to Julia, it was her first asset purchase anyway, and helping her would overall help everyone. 

Welcome to Loy Loy: The Savings Game (loyloy.org) where you play a Cambodian female worker trying to save up money with the other players to purchase a garment factory together.

In November 2017, our team from UC Irvine’s Institute for Money, Technology and Financial Inclusion (IMTFI) carried a role-playing board game to the American Anthropological Association’s (AAA) annual conference in Washington D.C.. Loy Loy (which means “Money Money” in Khmer) is a financial education tool being developed by IMTFI to teach players how one type of rotating savings and credit association (ROSCA) works. Similar to Monopoly, you receive ‘payday’ money upon each circulation of the board, which represents one month in time. However, unlike Monopoly, all players both move collectively with a single placeholder representing time and save together to win by purchasing the $5000 garment factory before the maximum number of months is up. Your progress depends on random events and expenses (such as medical expenses), with occasional opportunities to purchase income generating assets (for example, a pig) despite the pressure to maintain your personal funds. If any player reaches bankruptcy, the game is over for everyone. All players are challenged to come together and reach the goal collaboratively to win, which you can do through extending loans to one another or paying one another’s bills.

As anthropologists like Clifford Geertz and Shirley Ardener have famously written, and as generations of ROSCA members and development professionals have experienced, ROSCAs are commonly used in low-income communities across the world but can differ dramatically from country to country. In East Africa, for example, members of the ROSCA (or chama) make sure that money is separated and stored in a box. All participants pay an equal amount each month, as payouts are all equal. Mexican and Mexican-American tandas provide a unifying social space, encompassing a form of community as well as consistent sharing of funds. In Cambodia, factory workers form a kind of bidding ROSCA. In this kind of ROSCA, each individual contributes towards a collective savings pot, for which each member of the group then bids by offering to repay at a rate of interest they’re willing to offer to receive the pooled funds. In Loy Loy, ROSCA day falls once each round to award one player funds from the pot, instigating haggling and bidding wars between players. Once a player has ‘won’ the pot, they cannot enter a bid on the next ROSCA day until each player has had a chance at winning.

The idea for the board game developed during a closed-door workshop for IMTFI fellows, "Getting Beyond the Survey: Ethnography and the Art of Seeing," where participants convened to share their in-progress research and discuss methodology. A creative group exercise materialized issues found in observations of payment practices in different field sites around the world. You can see the inception video here:

Games are recognized as a valuable tool to communicate complex social dynamics. Allowing students to participate, interconnect and play creates an immediate and ongoing feedback mechanism where failure is reframed as iteration so that learning happens by doing. In this case the game teaches you about your own interactions and relations with money even as it offers a window into the everyday economic challenges and financial practices of people like the Cambodian garment workers who inspired it. As a player, you’re responsible for both negotiating and preparing for expenses that turn out to be impossible to cover using the regular wage income that you’ll receive. Most players realize this within a few turns and begin to develop their strategies while playing, either forming as many close social connections as possible or bidding large on ROSCA days to receive loans and trying to hoard.

The game is engrossing: players are absorbed into a virtual reality constructed through their characters and ROSCA community. In both groups, players passionately embodied their characters while forming new friendships. Unique and surprising banter always appears as each player justifies their reasoning for deserving the money. The game encourages very particular creative thought and debating skills! We ran two testing sessions for interested gamers while at the AAAs, one in the lobby of the hotel where the conference was being held, and the second as invited guests at the AnthropologyCon salon for gaming and games at the conference. Sharing Loy Loy at the AAAs was a fun experience. I found it immensely valuable to receive feedback from anthropologists before and after each session, and in what follows, in the full blogpost I offer just a few reflections on what we learned.

For detailed reflections from the AAAs and background of Loy Loy, read the full blogpost in The Geek Anthropologist here: https://thegeekanthropologist.com/2018/01/26/capitalism-is-so-much-easier-learning-savings-through-playing-a-board-game/.

Interested in keeping up to date, learning more or helping us distribute Loy Loy? Please join us on LoyLoy.org. To purchase Loy Loy, follow this link to the Game Crafter site.

Object-Centered Focus Group Discussions: Stimulating Conversations On Mobile Money Practices and Culture

By IMTFI Researchers Milcah Mulu-Mutuku (Egerton University, Kenya) and Castro Ngumbu Gichuki (Nanjing Agricultural University, China)

Conversations on personal financial practices are sensitive and many times difficult for researchers to actualize in the field. As many researchers have documented, personal financial practices are private. Getting people to talk about them often times requires great effort. Adding culture to these conversations creates a further challenge that seems almost insurmountable. Yet, even with all of these challenges, it is essential to understand how culture influences mobile money practices if appropriate policies and programs are to be put in place.

Participants during the Focus Group Discussion

Our IMTFI sponsored research involves determining the influence of mobile money on women micro-entrepreneurs’ control of productive resources. In many communities in the developing world, control of productive resources is a subject deeply entrenched in cultural practices rooted in money and land as the preserve of men. As we are realizing through our research, control also depends on the context of resource use. In this era of technological advancements, a slight change in external factors surrounding productive resources alters significantly the way control of these resources is experienced by those involved. For example, the use of mobile money significantly impacts the dynamics of resource control. However, this depends largely on the type of resource (e.g. money, land, information) under consideration and the importance attached to it by the people concerned. Money is probably the most highly rated productive resource in terms of its importance by our target group of women micro-entrepreneurs. How this resource is controlled and managed has a direct impact on their business performance.


Stimulating conversations on money, control and culture

To get women micro-entrepreneurs conversing on these matters, we designed two charts: a static one (Fig. 1) which we used to prompt participants to think through their financial practices (without intervention on our part) and an interactive one (Fig. 3) which required participants to perform some activities. Our approach was inspired by the IMTFI Fellows workshop held at the IMTFI Insight and Impact Conference on April 22, 2016 and by object-centered interview methodologies featured in IMTFI’s Consumer Finance Research Methods Toolkit (the toolkit is free and available for download here).

Fig 1: Mobile Money Services Chart

The Mobile Money Services Chart (Fig. 1) aimed to stimulate conversations on mobile money services utilization at personal, family and business levels. The participants were expected to view a representation of a mobile money service or product on the chart and then rate the usage of these services and products. We then used a flip chart to record the responses (Fig. 2). Using this chart, we explored the benefits and challenges of using these services as experienced by the participants. The main benefits of services frequently used included autonomy and time saving while major challenges to uptake and use were interference with family relations due to practices of secrecy and disclosure related to the personal identification number (PIN). 

Fig 2: "Services used and
not used"

The Productive Resources Control Chart (Fig. 3) aided us in discussing women micro-entrepreneurs’ control over productive resources and the influence of mobile money services on control and decision-making processes. Participants were asked to place color-coded sticky notes or plasticine (modeling clay) next to the person who makes decisions about the acquisition, management, and use of various productive resources. Choices included self, husband, brother/father, and friend(s).  

After the exercise, we counted the sticky notes or plasticine mounds to determine who had the highest control of a particular resource, which we then discussed with participants. We also discussed how mobile money has influenced this control and explored gender dynamics in table banking group activities in this era of mobile money use. Interestingly, fathers and brothers no longer interfere with women’s control of productive resources, whether single or married. In addition, mobile money services have provided women with a discreet method of controlling finances.

Fig 3: Productive Resources Control Chart

Our experience in using Object-Centered Focus Group Discussions

This being our first time to use such a technique in data collection, we did not know what to expect. Much as the idea of using objects in Focus Group Discussions excited us, and of course we were looking forward to it, we were alive to the possibility that our ability to communicate to the participants through these charts might not work as we hoped. However, our anxieties were immediately settled as soon as we began the first session and observed the respondents’ excitement. Discussions were lively, diverse, engaging and quite informative. This came as a surprise to us because we did not realize beforehand that visualizing mobile money services would trigger such diverse thoughts in the minds of the participants and therefore diverse conversations. One chairlady of a table banking group summed up her experience in the discussions, remarking, “na leo mmetuchangamsha kweli kweli! Tumejifunza mambo mengi leo!” (You have really excited us today! We have learnt many things today).

Mobile Money Services Chart in use

Much as we intended to collect data for our research, we also ended up raising awareness about available mobile money services. Participants discussed some mobile money services depicted in the first chart that they never thought were meant for them. One lady pointed at the Pesa Point ATM booth image and remarked, “hii huwa naiona town kila wakati ni kienda lakini sijawahijua inaweza kunisaidia”! (I always see this one every time I’m in town but I have never known it can assist me). Such remarks opened our eyes to the role of such data collection techniques in educating participants on matters otherwise taken for granted, and in creating awareness about services and products.

This experience was exciting and enriching for both researchers and respondents. Within the context of the activities, it was easy for respondents to talk about their personal financial practices and provide information, which under normal circumstances might be difficult to share. For instance, one participant shared with participants about her secret business money saving practices. In order to avoid interference and misuse of business money, she “hides” it in an M-Shwari Deposit Account, a paperless micro-savings product (offered by Safaricom in partnership with Commercial Bank of Africa and operated through M-Pesa). She reasoned that it is easy for her husband to track her savings on her M-Pesa Account but not so easy with her M-Shwari Deposit Account. This way, she is able to control her business finances without interference. However, she has never used the M-Shwari micro-credit product. She finances her business activities through her table banking group and through other micro-finance institutions such as Small and Micro-Enterprise Program (SMEP).

Productive Resources Control Chart in use

Almost all participants indicated they do not use the M-Shwari micro-credit product to finance business activities in spite of the favorable facility fee (compared with micro-finance institutions’ interest rates). Participants gave two major reasons for not utilizing this service. One, the amount of credit that can be accessed through M-Shwari depends on points earned through the usage of a M-Shwari Deposit Account, M-Pesa and other Safaricom services. These being the ‘base of the pyramid’ customers, earning points that would guarantee a sizeable amount of credit does not come easy. Much of the time, the amount of credit they can access through this service is too little for their business needs. Two, though the service providers have ensured that information on terms and conditions of use for the M-Shwari micro-credit product is in the public domain, participants reported lack of information about the product, making them apprehensive of the service. Many participants expressed a desire to understand how Safaricom calculates the points that determine the amount of credit they can access through the M-Shwari micro-credit product.


Concluding remarks

All in all, our experience in using Object-Centered Focus Group Discussions taught us that this is an excellent way of collecting data on sensitive topics. However, researchers must be alert and sensitive to remarks coming from the participants, which can be probed to yield more information and reveal unexpected details. In addition, depending on the topic of discussion, researchers need to be careful not to be sidetracked by the excitement of participants as they discuss their own subjects triggered by the images and writings on the charts.

Read Milcah Mulu-Mutuku and Castro Ngumbu Gichuki's final report here

If you would like to leave feedback about this blog post and the Consumer Finance Research Methods Toolkit, see here.

References
Erin B. Taylor and Gawain Lynch, with Ursula Dalinghaus (2016). Consumer Finance Research Methods Toolkit. IMTFI. http://www.imtfi.uci.edu/files/consumer_finance_research_methods_project/IMTFI%20Consumer%20Finance%20Research%20Methods%20Toolkit_beta%20version_Reduced%20size.pdf

Consumer Finance Research Methods Toolkit (BETA Version) available now!

• Are you curious about how to design a research project on Bitcoin? 
• Interested in enlivening your interview research with object-centered methods or social network analysis? 
• How do you adapt research on financial management practices in locations as different as the San Francisco Bay Area and the border area of Haiti and the Dominican Republic?

Find answers to these questions and more in our Consumer Finance Research Methods Toolkit.

Download a copy of the toolkit here!

Launched at IMTFI's Insight and Impact Conference, the Consumer Finance Research Methods Toolkit is a collaborative project led by Erin Taylor and Gawain Lynch. It demonstrates how a range of qualitative and quantitative methods can be applied to research problems in consumer finance. The CFRM Toolkit is intended for a wide audience, professional and academic. Web-based and free to use, toolkit features include:

Methods: time tested, innovative, and money-specific research methods

Case Studies: all sectors of consumer finance research

Resources: links to further reading, relevant institutions, and data sources

The toolkit is a "living document." We hope to incorporate your suggestions, ideas for content, further case studies and useful resources.

Please send comments and feedback to cfrmptoolkit.imtfi@gmail.com or you can complete our user experience form.

CALL TO ACTION: How sharing approaches and methods can improve our research in global finance

By Erin Taylor and Gawain Lynch

These days, it seems that everywhere we turn in consumer finance–banking, microfinance, mobile money, payments–we're told that we need to be more customer-centric. But people are immensely complex, and consumer finance is changing fast. How can we possibly hope to understand people's financial behaviors?

Photo by Ken Teegardin

One major problem is that we have limited information about people, and so the stories we tell about them are also limited. Consider the following stories:

Sitting in a trendy café in downtown Manhattan, a forty-something professional logs into her Bank of America account using her smart phone. She glances at the balance in her checking account, makes a payment on her credit card, and sets up a direct debit to pay her new cleaner.

Over 7,000 miles away, a young man living on the outskirts of Nairobi signs up for M-PESA. He had never had a bank account and he needs an alternative to sending money home to his family who live in a remote area of rural Kenya. A cousin gave him his old mobile phone when he moved to the city, meaning that he can now, for the first time in his life, access a formal financial service.

These two scenarios are often held up as typical scenarios of banking in wealthier and poorer countries. Stories like these help us envisage global inequalities in access to financial services. They represent a real need for financial inclusion programs to focus their efforts upon under-served regions of the world. 

But they are also, in some ways, completely wrong. 

In fact, we can flip these stories around to paint an entirely different picture:

Sitting in a café in uptown Manhattan, a middle-aged man remembers that he has to cash a check. He heads off to an exchange house around the corner where he makes his transaction for a fee. This service would be cheaper in a retail bank, but he hasn't had a bank account for years. Unhappy with the services they provided and unable to find time, he abandoned formal banking for more expensive, but far more convenient, shop-based services. 

Back in Nairobi, a wholesaler shuts up shop for the day. She heads to the bank to deposit her cash takings, which are far less than they used to be as more and more customers pay her using mobile money. While waiting in line, she uses M-PESA to transfer some money to her nephew, who has just moved to the city. She also sends money to her daughter, who has recently relocated to New York to attend college. 

While we might intuitively know that these stereotypes are wrong, our consumer finance research tends to reinforce their geographical and technological assumptions. In fact, the more that financial services go global, the harder it is to draw “typical” stories about people using financial services. We are even less likely to make comparisons between users of different kinds of financial products. For example, we don't normally compare retail banking customers with mobile money customers or informal financial services such as rotating savings associations with smart phone financial applications in Manhattan.

Are the ways people use financial products really all that different? If we start making global comparisons, across populations and financial product types, could we learn anything useful that would help us to understand changes in global consumer finance today?

Advancements in technology, financial infrastructure, and global regulation mean that customers and providers everywhere are facing similar issues: more products, more consumer choice, uneven use of technology, and changing markets. So we certainly do stand to improve our understanding of people by looking beyond our national borders and our own areas of expertise.

Our project, Consumer Finance Research: Global Approaches and Methods, is investigating how different sectors–development, commercial, academia, and government–are innovating to understand the consumers of financial products. It's clear that no one method–ethnography, interviews, data analysis–is enough to provide us with adequate profiles of people using these financial products. Our key idea is that sharing knowledge across different sectors of consumer finance research will benefit us all.

We are producing knowledge products aimed at anyone working to understand financial consumers, including researchers, user insights specialists, designers, managers, and development workers.

For example:

• A provocation paper that outlines major challenges in consumer finance research (Click here)

• A toolkit that showcases qualitative and quantitative methods being used to understand consumers

• Blog posts here on the IMTFI's website

• Discussions on our Google Group and Twitter hashtag (#IMTFI)

Given that the aim of the project is to share knowledge, we can't do it alone. The more people we have involved, the better our global comparisons will be, and the more we can all benefit. We encourage you to share your stories: 

• Your insights from your research and engagement

• Your innovations in methods

• Your perspectives on global changes in consumer finance

• Your ideas for better tools and collaborations

So, please join in the conversation. There are lots of ways that you can link up to the project. You can join the discussion right here on our blog posts, and you can contact Erin by email at erin@erinbtaylor.com. If you have any ideas, feel free to share them or even start your own initiative! 

We look forward to working with all of you to develop the future of consumer finance research.