This assignmnet reviews the behavioural economics approach for improving consumer financial health. Savings are crucial for the economic growth of an economy. Savings depend upon individual choices and preferences based on their perception about the future. Application of behavioural economics to study consumer’s behaviour and behavioural economics strategies will motivate individuals to save. In the long run, the strategies will help in enhancing savings among developing countries. Financial institutions performance depends on deposits and savings of customers. Many times, households open accounts but don’t deposit or save leading to dormant accounts. Dormant accounts can be a huge problem for financial service providers. Thus, to enhance people’s savings, we need to change people’s focus by incorporating behavioural economics approach for improving consumer financial health.
behavioral economics approach for improving consumer financial health
STRATEGIES FOR IMPROVING CONSUMER FINANCIAL HEALTH
Behavioural economics approach for improving consumer financial health is made practical through poverty alleviation strategies. Typical poverty alleviation strategies aim to boost a person’s decision-making bandwidth to surmount financial hurdles as they arise. However, even when operating at top available bandwidth, managing variable income and expenses is tough. Successful providers, therefore, suggest behavioural economics strategies to make the equation dramatically simpler. By shifting this decision-making burden from the consumer to the company, it becomes a win-win for everyone involved. The company gets to enhance its value proposition by offering helpful products and features. The consumer’s life, on the other hand, becomes dramatically easier when financial decisions are off their shoulders. In conclusion, the strategies help consumers take advantages of the resources they already have, thus improving consumer financial health.
behavioural economics strategies for improving consumer financial health
FIVE WAYS BEHAVIORAL ECONOMICS APPROACH BY M-TIBA CAN HELP PEOPLE SET MONEY ASIDE FOR HEALTH
Behavioural economics approach for improving consumer financial health is an advantage specifically for people struggling to make ends meet. We all know how difficult saving for the future can be. For those with minimal incomes who sometimes struggle to make ends meet, the challenge is even greater. Some of the behavioural economics strategies used to address these challenges include mental accounting. Mental accounting encourages people to allocate some money to their future healthcare, and mentally remove it from daily finances. In Loss aversion, instead of adding to savings at the end of each week, its added at the start. Implementation intention strategy supplies calendars that remind people of their intention to save. Ease of access and emotional engagement are also some of the strategies of improving consumer financial health by M-TIBA.
five ways behavioral economics approach by M-TIBA can help people set money aside for health
Additional attachments
>> Download
