 All right, hi good afternoon Want to welcome everyone to this afternoon's event youth and their money new insights into the financial lives of youth in developing countries so when we embarked on youth save a consortium initiative of Save the Children the Center for Social Development at Washington University in St. Louis the global assets project here at the new America Foundation and The consultative group to assist the poor seagap back in 2010 You know precious little was known about Youth and their financial lives their resources their preferences and their behaviors I think we had a sense obviously that this very vulnerable population was in kind of all too often ignored market and You know if you thought if we can get the products and services right then this Population could make up a potentially lucrative and eventually stable market You know for financial institutions while also kind of kick-starting a road to financial independence and empowerment for the youth themselves So that was two years ago two years later We are here. We are today and the members of this consortium are coming together to release several papers this you see outside a Long table full of papers I think that from our team alone We have maybe seven coming out today In all that kind of it are expanding on this new understanding of youth from access to preferences and behaviors and the implications that this understanding has not only for our work, but for the entire youth financial services field and You know recognizing that we are not alone in this field by any sort of imagination We're very pleased that some of the preeminent experts on youth financial services youth livelihoods Financial capability and behavioral economics are joining us at this event today to Contribute to the dialogue sharing their experiences their ideas and their opinions one of those experts is Ruth Dweck Mbeba of the Mastercard Foundation and she's going to kick us off with some opening remarks after which We'll move directly into two quick panels and Understanding demand is the first and nudging behavior the second before some closing remarks on shifting perspectives on the potential opportunities of the youth financial services market by Alexia lot or two of C gap each panel Should have enough time for plenty of Q&A from the audience and if you're watching over our webcast and all of our events are webcast live and or Otherwise want to join the discussion online You can follow some live tweeting that will be happening during the event using the hashtag youth save So we're not going to be taking any breaks during the panels I just want to give this logistical information up front But we do promise to reward everyone's patience during the shifting and moving and shaking that we're going to be doing with drinks after the After the two panels starting at 5 p.m. Drink some food So stick around and and we'll try to make it worth here a while. Sorry for those who are watching online So without further ado I'd like to introduce Ruth to everyone Ruth do I can beva from the MasterCard Foundation has over 30 years experience in accounting and financial management And as a practitioner trainer and consultant in the field of micro finance Operating in many regions of the world particularly sub Saharan Africa She's currently a micro finance program officer with MasterCard Foundation She worked for MEDA for 25 years and Preve previously served as a seat financial services working group facilitator She has extensive experience in Building capacity at all levels of organizations and in the design and delivery of micro finance curriculum in the areas of financial management risk management internal controls and internal audience audits So Ruth please come on up. Thank you Good afternoon and welcome to youth-saved youth and their money event I'd like to begin by thanking the youth-saved consortium for inviting me to speak It's a pleasure to be here with you today and thank you to all of those who are participating by webinar To set the stage, I'd like to begin with a bit of a personal reflection I've been privileged to share much of my life with a chosen son Who has been a source of energy joy and also personal growth in my life making a mother out of me in the process a Number of years ago. I reached a significant birthday in my life and he turned to me and said Well mama the world belongs to me now. You've had your turn He was only 14 at the time and already wiser beyond his years And I often think about what he said particularly in preparation for today's event Because looking at the sheer numbers of young people in the world today the world does indeed belong to youth They're currently close to what 1.5 billion people between the ages of 12 and 24 Close to 80% of them living in developing countries These young people are a voice force in their own right and have a legitimate voice at the table But the world that they live in is much more complex today than ever before and for those who are poor There are far fewer opportunities than ever before At this point there's roughly 81 million unemployed youth and in developing countries most of them lack access to Education employment and financial opportunities Their frustrations are palpable. We see them in the news and on our television screens But at the same time their energies and ambitions for successful transitions are also palpable And this is why much of the MasterCards Foundation's focus is on young people in developing countries particularly in the African continent The foundation was established in 2006 through the generosity of MasterCard worldwide when it became a public company at that time The foundation operates independently Our vision is a world and where opportunities are there for all to learn and to prosper So we have two basic program areas the first one being youth learning and the second being microfinance Most of the focus is around young people. We really believe that it's a combination of skills building education Employment entrepreneurship and access to financial services that can support people but particularly young people Who live in the poorest parts of the world to create their own opportunities Build self-reliance and become change agents in their local communities So what are the young people looking for? the young people that we are meeting through our programs are Usually earning and learning They are looking for opportunities that will enable them to continue that learning path But also have opportunities to earn more and yes to save more They're looking for flexibility for choices for options But too often they are isolated and excluded from the economic arena But their stories capture a really powerful picture of the need and the potential that a formalized savings plan could have And we know a lot of what we don't know This is not a simple task and we are only beginning to understand what the issues could be The foundations portfolio around youth financial services is still relatively young But we're entering a very very rich period with our partners. We have roughly eight partners in this in this area We have just started the whole area of mid-term Evaluations with partners and we're beginning to draw out some learnings through that process Our partners have you market research studies on roughly 15 countries or more Including save the children's research work We expect a synthesis of this work late 2012 Two of our partners are expecting to publish financial diaries on young people in the next year And we expect roughly 10 tool kits and guides Coming out in the next year and a half providing insights Resources and tools to support those who are working with financial services for this segment Today we're thrilled with the youth save consortium to announce and release the publications that that Jamie spoke about two years ago Mastercard Foundation launched this partnership with the consortium to explore the financial and developmental impacts of savings on low-income youth in four developing countries Ghana Nepal Colombia and Kenya The project works with four banks in those countries And worked with them to offer financial products and marketing targeted towards 12 to 18 year-old young people Financial education is a part of that project and the research component is designed to gain a really deeper Understanding of the impact on young people. What are their preferences their behavior around money? Research and analysis is also being taken to understand the regulatory and the contextual environment Also, what is the business case for banks looking to serve this this client segment? We do know that environment and context matters We also know that we have a lot left to learn This is a very unique project for us at the foundation. We're thrilled to share this day with them in this event We're two years into the project. We're starting to gather some really interesting early learnings And so we're very excited about the reports the focus of today's event as well youth and their money is also really appropriate This project and the work more broadly is in service of the young people that it works with and at a time when the Microfinance sector has really struggled with reputation challenges financial crisis and other operating risks a Refocus on the client and today that client is the young person is really essential So we're bringing the focus on that young person as a client today So I really look forward to a rich discussion with our panelists. Thank you for all of your work This is going to be great. We're we're anxious to learn who what you have learned through your research and your findings on this topic and We're anxious to hear and listen to what they're telling us about their dreams and aspirations So once again, welcome. Thank you and look forward to the discussion Good afternoon everyone. I'm really happy to be here. My name is Kelly Holman. I am with the Population Council I'm based in New York, but the Pop Council has offices in upwards of 18 different countries in the around the world I'm an economist, but I've been working for the last 14 years in multidisciplinary teams to really look at how interventions and Policies can be strengthened to build the assets of young people particularly young people who are marginalized Socially excluded financially excluded, etc We've been doing this work in Latin America in sub-Saharan Africa and also in South Asia So it's a rather global portfolio I Think we can just go straight to the panelists I will Introduce each one just ever so briefly because I believe we're constrained for time So our first speaker will be a Tanya Killara from Seagap The second will be Katya Peterson with PSI and the third will be Ronnie Dishbandi with Save the Children and then the fourth will be Lisa Johnson from the Center for Social Development Okay, thanks Good afternoon My name is Tanya Killara and I lead our work youth work at Seagap I'm a part of the clients and products team at Seagap and Really, I thought what Ruth said was perfect the financial inclusion industry is really refocusing on clients and We created this Special team at Seagap called the clients and products team about a little over a year ago to actually focus in on the client and for us youth is a really important client segment that we're looking at specifically in addition to another couple of client segments, so It's really a pleasure to be here today and what I want to do as part of this panel and it's a little more formal than I expected but I wasn't quite sure whether to use my slides or not but what I want to do is to just do a little bit of context setting and share with you how we've been thinking about youth and finance and So we we participate in the youth safe project But we stepped back a little a few months ago and we said okay if we have to actually look at What's the role of finance in youth lives and for us really it's lower-income youth in developing countries What does that mean like what really is the role and So we we did some scoping work. We spoke to several experts in the field we spoke to Funders we spoke to academics we spoke to practitioners to actually get a sense of what's happening in the youth landscape and One thing we saw was that the and we're talking today about Understanding demand on this panel so early segmentation becomes very important And you'll hear a lot about segmentation as we go through the panel But one thing we saw was that Primarily a lot of the segmentation in the youth space Especially in the youth financial services space is done on the basis of age So it's are they minors or majors sometimes it's done by educational status So are they in school out of school or lower-income higher-income, but it's when you predominantly look at it it's through that lens of aged age based segmentation and Now I think that's that's an extremely valuable way of looking at it And there's a lot of discussion in the field about you know What what age actually makes up youth? But I think one thing that it does is that way of looking at it Misses out looking at youth lives holistically so to say okay, you know if you have to look at This this young person not just on the basis of how old they are But if you have to look at everything that's going on in their lives The age-based segmentation actually missed something so we really said okay if we have to look at it from a life cycle approach and and look at it, what can we what can we say and One one lens that we found especially useful. This was proposed in the world development report 2007 was the lens of transitions and this the transitions Lenses very quite widely used in other youth development work But it's not been as used in youth financial services and so really at this point This is just a proposal for you to look at think about we'd love to engage in a dialogue with you Get your feedback about it But just wanted to present one way of actually looking at youth financial lives through this lens of transitions great so The way we see transitions are something that all youth have in common and these transitions are to do with learning so How are they actually gaining the skills the education to actually be able to lead an economically productive Life later on so to do with learning to do with working so how how do they actually make the transition from into into the workforce and Then and then there are other what we're calling life events. So there's marriage. There's actually starting a family youth that Often go through the other transition, which is the one where they're picking up civic responsibility. So Voting ages in most countries are 18. So they're actually beginning to become politically aware start voting. So And in the lives of lower-income youth now these these transitions happen with Everyone in all youth pretty much everywhere in the world. But when you look at lower-income youth, what's What's different is that these transitions often happen earlier and they happen in a very compressed time frame So in in the lives of higher-income youth, you might see that this is a pretty linear transition They first go to school then they go to College then they start enter the workforce Sometime then they get married have children. So it's quite a linear transition in the lives of lower-income youth These are really compressed. So a Girl living in the slums of Rio might she might be in school But she's also working on the side to support herself She she might even have children that she has to care for so They if you look at it, there's there's a number of transitions that are going on in the life of that young person So and recognizing this the complex reality of these transitions actually helps us better understand What the financial service needs of youth are and what what this combination? You already heard this of some financial services that youth need but they're also non-financial services. So really looking at Transitions helps us to more smoothly We've together what the financial services and non-financial services needs of these youth actually are so I am I want to talk a little bit about that The financial service needs or the financial service implications of these three transitions So when you look at learning So how are they gaining the skills? So I'm saying I keep saying skills because it might be education. It might be vocational training So but how are they actually gaining skills to for them to enter the workforce now if they're going to school? They might need Often for lower income families. It's not that they have the money to send their kids to school either They have to save or they might need to access credit to actually be able to educate Youth this this doesn't even address the issue of quality of education or whether that education actually ensures employment You also there also other financial services that you can look at like There's a lot of talk about conditional cash transfers Which are government often government payments that are made to lower income families Which have a condition of actually which which set up incentives for youth to sit in school longer the so that's the along the learning transition and As you start thinking about it actually like many many more financial service needs that you'll see but I just wanted Highlight a few the second one along working and I know Rani will talk about this in a great detail later Which is youth are economically active whether they're in school out of school. They're actually earning money and They they have full rich economic lives. So financial services can help them acquire skills So that's that's one thing just actually give them access to those skills They often might need insurance or savings which could Protect them against a sudden loss of employment or prolonged unemployment If you look at the whole issue of youth entrepreneurship, I think there are two types of youth entrepreneurs So one is just youth who have been forced into entrepreneurship because there are no other economic opportunities for them Those youth at the very least have requirements for working capital if they're for youth who are naturally Entrepreneurial and want to actually grow and scale these businesses. They would need other services They would need micro equity for instance They're also like a whole set of non financial services that they would need they would need mentoring They would need business connections connections to the market The other I think interesting Element around working is the whole issue of migration and you can talk at length about migration But we when we interviewed a provider in India. They said okay in India What happens very often is that a youth migrate from rural areas to urban areas and then engage in extremely hard labor and What that does is actually changes their time frames because they know they can work between the ages of 20 and 40 and At 40 they know they retire like their body can't do it anymore These youth might be suddenly much more willing To save for retirement to actually think about retirement which for other youth just Is so far away that they wouldn't even think about it. So So there really a whole Set of financial service implications there along the managing life events There's your families can save access credit for marriages insurance can help with health emergencies So really along all these financial services there's likely to be in some cases more of a public policy case in some cases actually incentives for the private sector to be able to provide these services and But I think what is clear is that youth really have a complex set of financial service needs But not a lot of them are being met right now. They're being met to a small extent So currently there are about a 4.2 million youth serve. This was a survey that making sense conducted in 2009 Where with about 186 million dollars in credit about 48 million dollars in savings 1.2 million dollars in insurance and But but there's a number of missed opportunities The World Bank released data recently, which is the global Finnex, which showed that youth are 33 percent less likely to own a bank account than adults They're also if you look at lending portfolios only Outreach to young actually represents only about 10 to 20 percent of the lending portfolios of most partners Even though if you look at the population the youth make up 30 to 50 percent I'm actually so the big point. I want you to take away from this is that youth are There they have a set of financial service needs, but they're currently not being completely served and you'll hear today from From a number of practitioners who are actually going speaking to youth to better understand these needs You and then say how we can serve these youth you'll hear from Katya next about Looking at it from a completely different Lens and she'll talk about that and then we'll have Both Rani and Lisa talk about what that we've done in youth save So thank you very much and we'll be back later to answer questions. Thank you Does my PowerPoint magically appear? Okay Excellent. I like magic. Thank you Thank you everybody. My name is Katya Peterson. I am a researcher at population services international Kind of right next door on 19th Street I was not PSI was not part of the youth save Project Rani has asked me here to contribute my knowledge about market segmentation In youth and our experience has been more on the health sector engaging with you so PSI for those of you who are not aware We are a social marketing organization. We are in 72 countries around the world We focus on branding family planning and reproductive health products like condoms IUDs Those types of of deliverables and then we also run franchises for service delivery Youth make up a bulk of our target audience So it's it's very important for us to understand their behaviors We Specialized on especially my office and research we focus on segmenting Segmenting target groups based on behavior Particularly we use the OAM framework which stands for opportunity ability and motivation It's with the understanding that just because a youth is not empowered to make a decision about a condom Doesn't necessarily mean they're disempowered everywhere in their life So it's taking into account when we do our research that empowerment can be fluid Economics has been shown to play a lot in that youth who are more financially secure are more likely to Make smarter choices about their reproductive health PSI is just about to roll out our five-year strategic plan the crux of it is a total market approach. I Will admit here in front of everybody. I am a public health global health researcher I am not a financial person. So I am learning a lot about this So essentially you will probably know more than I do but it's essentially growing the market as a whole We're not interested in crowding out the local condom supplier Or the other distributor rather we want to grow the entire market. We just want more condom users out there anyway And and that's essentially unlike Coke or Pepsi. That's perhaps, you know, the the the tack that we take So this also ensures that everyone in the target group has access To a health product or services that's in their price range and this essentially were Redefining success which can be a bit difficult when you're reporting on indicators and whatnot PSI uses the archetype Sarah who we we call her Sarah and whatever we do we bring it back to is this good for Sarah It does this work for Sarah. Is this good for Sarah and her family? We define success now not always in Dali's which are disability adjusted life years or CYPs which are contraception years of protection, but rather we see the gains for Sarah Are Sarah's needs being met whether that comes from us or the total market and this dovetails very nicely with the YouthSafe project Because financial empowerment is so important to their health one of the things that we do to Learn a little bit more about our demographic. We use a tool called focus PSI likes to brand condoms and every single tool that we use. So there is a name for everything Essentially, this is a focus group Discussion in a box it comes pre-packaged for people to be able to use in the field and It will come with an interview discussion guide themes to analyze for Interpretations coding for keywords Essentially that this is not just a focus group discussion for the sake of having a focus group It's largely driven by the marketing team and I'll show you an example of the type of questions that the marketing team will want to know As I said, it's a suite of tools. It could be either photo narratives interview guides focus group discussions collage making I talked a little bit about the OAM framework already We use this to gain Insight into the audience we're trying to reach Just as you would for any basic qualitative research Importantly, this is a collaborative process between programmers marketers Researchers and sometimes members of the target audience, especially when we're doing Interpretation, so it is not just a researcher in their room by their self. It's very interactive Just very quickly we these are some of the tools that we use the most Flash focus is a quick It's a quick and dirty way to get what you want to know It is often used when a marketer they release their condom and they want to know very quickly What people like or don't like about it and it might just be one or two questions sweet and to the point We've also got tools for focus on traders or vendors that we will use Focus on providers. These are health care providers will sit down and do an FGD with them focus for marketing planning and Focus on qualitative segmentation And this is what I'm discussing a bit about this So just to summarize we're essentially looking at beliefs to reinforce and beliefs to change We want to build a profile about this person and archetype and I'll show you a rough an example of that We also want to we use this to earn Understand current brand positions. This could be and what they associate that brand with so we've got Two condoms in South Africa one is marketed towards You know that guy who just loves to get out on a Friday night and likes his women The other one is to the more conservative couple who want to use it more for family planning We create a category map that shows us what are the competing products? Services behaviors that might go against the successful marketing and then we also develop segmentation diagrams To guide marketers towards the determinants that they can best influence And I'll present a quick case study here. This is the Salama condom from Tanzania so Salama was had been on the market for a while and There were now competitors who are starting to creep in up on its space The tack that they take is let's PSIs Let's give that market to somebody else and we'll go find another niche that nobody's in So they wanted to know how they could reposition and remarket Salama So they the purpose was to gather information about 18 to 29 year olds and they wanted to know Marketers strength of Salama as a brand how it's perceived Who are the current customers? Do they need to do an image revitalization and also providing insight? and This is the just a quick picture of the interpretation session of us working all together And then this is what we come up with this is the final what we call a dashboard And this is what goes to the marketing team and I won't go through this one There are examples actually out on the table You'll you're free to grab one But this is we put it together an archetype and we actually put names and pictures and this is Frida Frida is the single mother who does not want to get pregnant again She wants to focus on employment building her own business And this is essentially what we get from all the focus groups and in-depth interviews It comes in this nicely little neat package dashboard that we give out and That is it for my very very brief presentation. It was just of an overview But please feel free to contact me if you have any other questions or comments. We're very excited that To have more of a holistic approach to these these types of issues. So thank you Waiting for some more magic Gotta believe There we go Hi, my name is Ronnie deshpande and I'm the director of the youth safe project based at save the children And thank you Katya and then I offer some really fascinating insights Ruth has already told you a little bit about the youth safe project So I'll skip that and just say that one of the objectives of the project is to design and test Sustainable savings accounts for low-income adolescents in the four countries that we work in that's Colombia Ghana Kenya and Nepal again and We have a very ambitious research agenda Which is looking at the outcomes and the impact of those savings accounts, but right now I'm going to walk you through the design half of that design and test objective But first let me recap what we've learned so far through our market research that we implemented to design these Savings accounts a couple of key findings first we found that even low-income youth do have some money It's in small amounts, but contrary to popular belief These are not kids without some financial resources and because they have financial resources They're making financial decisions all the time about where to weather and where to spend and to save and Finally, they're saving mainly through informal mechanisms places around the house trusted others But really for some of the same reasons and with some of the same misgivings as they're a sort of small-saver adult counterparts and We think that this actually suggests a market opportunity for financial services providers that can position themselves to compete on superior safety and acceptable convenience So you can stop paying attention now because I've just told you everything you need to know But if you'd like to know more you might ask how do we know all this? It's not by turning off the slides There we go We know all this because we talked to over 2,000 youth in these four countries age 12 to 18 Mostly from lower income segments as well as almost 500 adult kind of gatekeepers or influencers by which I mean parents teachers Community leaders older youth leaders and we did this research It was designed to shed light on kind of the multiple dimensions of youth behavior that you'd need to know about in order to design A good savings product for these kids as well as complementary financial education programming And so these are a couple of this sort of really key dimensions that we investigated which included You know, what are they doing their daily lives? How do they think about spending and saving? What kinds of savings tools might they need and how do they like to learn about financial information and information in general? We did this through I have to say nothing as sophisticated and really amazing Is what Katya does but mainly qualitative work as well Which took the form of in most countries two rounds of focus groups one very sort of open-ended and Formative to really elicit kids views on these issues and then the second much more focused To get their reactions to specific product prototype ideas built around what we found out about these questions We did do our segmentation for the formative focus groups anyway On a combination of demographic and behavioral dimensions So we actually split our 2000 plus respondents into 16 different sub segments along the dimensions of gender schooling status Location and whether they were older or younger adolescents sort of 12 to 15 versus 16 to 18 And we did this not because we wanted to design 16 different savings products That is not a path to sustainability that that I know of but rather we wanted to see how diverse Youth needs and preferences with respect to savings were across these sub sub segments so that we could actually identify Commonalities and design a savings product that would hopefully appeal to the largest possible Cross-section of young people So some of what we found actually through these conversations is quite consistent with What you would expect to find you know for anyone who's familiar with the literature on adult small savers First of all as I said these kids do you have money? And that really surprised a lot of people that we shared these findings with you know the adults that I mentioned We spoke to before Oftentimes the first question that we would get is what are you talking about youth savings a you youth? Don't have money so they can't save and if they do have money. They're not getting it for any place good We hear that a lot When you talk to the kids you find out that no they do have money small amounts But they do have money and most of it actually comes from their parents And they talk quite fluently about the amounts that they get from their parents and you'll see the range here It was quite a range across the four different countries and even you know within the countries But we found mainly two forms that kids get money from the family overall The first and that's what's what cited here are kind of in the form of allowances You know a lot of money that's given for like buying school lunches or snacks or covering daily needs like transportation And so those are smaller amounts, but tend to be more regular so people talked about getting an allowance every week Every couple of days like twice a week sometimes on a daily basis They also talked about a second form which is a little bit higher amounts, but much less regular and those are in the form of gifts Those tend to come in around holiday times about around in migration time So where the adults in their lives are coming back home with money So some of the amounts that we heard cited tended to be a little larger than the bottom end of this range for sure So for example in Ghana an amount around $13 US appeared to be typical for gifts In Nepal it ranged from a dollar to $14 so you know quite a bit more than the sort of allowance amounts in addition kids also reported receiving money from work and Most of the kids that we spoke to reported receiving money from work at least on a part-time basis This could be you know This is obviously more among out-of-school youth, but also among in-school youth who might work You know either around the house or in their family businesses or outside the family all together And these are some of the amounts that we heard the ranges of the amounts that we heard From those kids and you see again the same sort of diversity of amounts because kids really vary in how much they work Both in between and across countries So because this is qualitative work We it was very hard to get a hard and fast sense of how much kids were making exactly and how much they were Spending the next slide shows you we did talk about them though It's this slide what it's meant to depict is kind of a relative sense of what kids said They were spending their money on and you see the the most frequently mentioned category by far And maybe that's because we were talking to lower-income kids was basic needs so things like Food at school clothing personal care items, especially for girls. That was very important school supplies transportation The next category were a bit more discretionary expenses So the occasional contributions to household expenses and also various forms of entertainment a lot of cyber cafes Phone cell phone airtime cards. I don't know if you can count that as entertainment, but it's certainly discretionary And then there was actually a third less frequently mentioned But a third category of where these kids money was going to and that was savings and they mentioned this Not only as a sort of you know destination in and of itself But also as a means of coping with the financial pressure that they feel to meet with these these other basic needs expenses and they mentioned Two goals short-term and long-term goals the short-term goals really Corresponded very much to the basic needs side of the of the expenses But they also mentioned these long-term goals that they had Education across both in and out of school kids either to continue it or to get back into it The out of schools kids also mentioned saving up to start a business and then all types of kids mentioned saving for emergencies I'm getting the stop signal, so I'm going to go quickly through the rest of our findings As I mentioned before the vast majority of these kids see that's why I gave the findings up front The vast majority of these kids were saving informally. There are certain likes and certain dislikes that they have The top three should sell familiar to anybody who's looked at small savings before accessibility simplicity privacy Accessibility the money is always there when you want it Simplicity the piggy bank doesn't ask you to fill out a form every time you want to take money out and the privacy wrinkle was interesting Because and this explains the discrepancy between what adults thought and what kids thought The people that they want to keep their savings private from mostly are their parents and family members and partially this is out of Just a desire a growing desire for autonomy that that you know characterizes this age range of kids and partially It's because of fear of what might happen if their parents found out about the savings either expropriation or fears of loss of parental support on the Downside of informal savings though you have insecurity and the kids recognize that they're it's really subject to loss or theft and also Accessibility the same accessibility that they like they also recognize can make it not that easy for kids to Accumulate longer term larger sums and so here is where we think the opportunity for financial services providers might lie in helping kids come up with tools to Accumulate larger lump sums over a longer term that can really bump them up into the next set of economic opportunities That it's very difficult for them to save for right now These are quickly so this is what we're working with our bank partners on these are the four product brands these Products have been the savings accounts have been rolled out nationally across the four countries over the last couple of months and We have we're going to be monitoring this intensively obviously, but one of the great sources of data that are going to be coming out of the project is what this is going to be talking about next which is a Demographic and transactions database that is actually going to track the usage every single transaction every single account Opened under this project. So we'll be a couple years hence able to say a lot more about how these kids are actually doing in these accounts And I will stop there Good afternoon. You're all still here Okay My name is Lisa Johnson. I'm with the Center for Social Development at Washington University and I've been there for 15 years and Still working and doing they were very excited to be a part of the youth save project before my clock starts I would like to I Would like to make some acknowledgements because the the youth save project is very large and the research that we're doing is Extensive and multi-method and there's a lot of people that involve are involved So really first of all want to thank MasterCard Foundation for their for their funding support But I also want to if I know how to make this go down. Oh, oh, you're okay Okay, which way does it go? Oh, perfect. Okay, I figured it out But I also want to acknowledge the research partners that are involved in this We have a lot of folks and not only the research partners, but also the financial institutions We haven't really named them. I will be talking about them But I want to give recognition to the University of Los Andes in Columbia University of Ghana Institute of Statistical Social and Economic Research The Kenya Institute for Public Policy Research and Analysis New Era and Nepal the University of North Carolina School of Social Work We were doing the impact study in Ghana and the Columbia are leading it and then the Columbia University School of Social Work So a lot of people that are involved in this process and I don't want to forget, you know when we start talking about data It's very easy to forget about the the youth And for the data that we've collected we had to get consent from them And so I really want to give a thanks to the young people for allowing us to learn from them Okay, so today I did say we have multi methods the method that we are Presenting in terms of data today is from the savings demand assessment is what we call that and it answers the research question Which youth household and saving product characteristics are associated with positive savings outcomes and in order to answer that question? No small task. We asked the financial institutions to add some additional questions to their account open forms So that we can get some additional demographic information from them and then they also provide for us as Ronnie mentioned The account transactions of those youth over the entire life of the project. So we will be getting a wealth of information And this this afternoon we only have a brief time So I'm just going to give you a just a little snapshot of the data that we have received from the product rollout From the I'm sorry from the product pilot Which was data that we were building up in order to develop the rollout product And in order to do one of the findings that we're finding from that are who saves a amount of savings How many are saving what are their patterns of savings and what are the characteristics that are associated with savings? So it will be a wealth of information that we get over time So for the product pilot we started with the market research and the next phase Was to do a pilot of the product to test and prime Two major questions many questions But two of the major questions in the product pilot was to ask are the banks attracting the target population Are they able to get low-income youth ages 12 to 18 to be willing to sign up for the account and then second of all Are the youth actually making deposits or are they wanting to use this account in other words if we build it will they come and You know if we provide an accessible Attractive savings product and services that go along that go along with that will they save in a formal saving structure? In addition to that we also are asking Where do we need to tweak our the product and the processes in order for them to be able to save more and to help contribute to their To their ability to save so just to give you a context for the product pilot the The piloting happened in three of the four countries in Colombia. There was no pilot so we don't have pilot data on that So we're focusing on the HFC Bank in Ghana post Bank in Kenya and Bank of Kathmandu in Nepal The piloting was between July and December of this past year now not all of the The pilots were limited in time and scope and the pilots in Ghana started at different times from Kenya and Nepal and even The branches that participated and noticed that we have a limited number of branches that were participating So remember this is a small small-scale pilot at this point in time Started at different times So when we look at the data, please take that into consideration that these numbers are not large But it just gives us an indication of how things are going as you can see in Ghana They actually had the number average number of days account was open was twice as large as in Kenya and Nepal They had that earlier start And then the total accounts opened you'll notice there's a difference between the number of accounts that are in the study and That means those that gave consent the youth that gave consent to allow us to learn from them Versus the total number of accounts that were open So there will be some differences in the overall total number versus the ones that are actually in our study It's still a very high number We're gonna learn a lot from those who did can give consent and we're very excited about that So what did we learn in answering the first question had the banks attracted the target population? Looking at just a few of the demographics here. What's interesting is in terms of gender You'll note. There's three interesting things about that That there is an equal distribution between boys and girls who signed up for accounts The second interesting thing is it's that way across all three countries So we have a really nice equal distribution in all of those countries a nice pattern to see and then thirdly what you don't see on the slide is that when we were looking at the Saving patterns and characteristics between the boys and the girls. There was no statistical significantly difference in between in the saving So that was that was encouraging to see as well But again, this is pilot data So we have to leave all of our precautionary Statements that go along with that and we will continue to track that in terms of the age at a time Of account opening it was average of 14 So we are getting the kids between the banks are getting that are recruiting the kids from between the ages of 12 and 18 Which was the target in terms of? previous Experience in a formal account Very few of the young people reported having a prior formal financial account, which means these are new clients for the Financial institutions, which is good news. They're reaching out and we're getting new clients into into the into the bank In terms of school enrollment most of the kids were in school that most the kids were not out of school youth We are targeting both but in terms of the piloting anyway Most of the banks were targeting the in-school youth the marketing that was going on was really towards that towards kids who are in school So that number is a logical reflection of that in Terms of income are we reaching low-income youth? We developed as part of the account opening forms that we asked them to fill out Looking at the minimum monthly wage in each country and then categorizing based on that we find that The young people reported most of them are in the first three categories So we are the majority of them really are in the lower-income category. We believe so we will continue to look at that You will see that in Ghana for example There is a larger number that have that were reporting five times or more the minimum wage when we looked at that We found that there was one Branch that actually had a concentration of that number So it may be something special that's going on at that branch where they were attracting a higher income group of youth So we will continue to to look at that information over time When we look at the reasons that the young people are saving this I think fits in what with what Ronnie found in the market research And that is that the majority of them say they were saving for their own education So this is also encouraging. I think they're getting that the messaging that this is an savings account that's not just meant to be a Transaction account but to Continue to save over time for their asset in terms of education. So that's that's pretty exciting to see and again We'll keep watching that Now the second question is are the kids say are the young people saving? Pardon me. I say kids. I tend to be very vernacular about this. I'm an older person So I think I'm those young people but the the young people are are our saving and again These numbers are not very indicative at this point because remember they've only been saving for about 40 days or 90 days in Ghana But they are saving There are some withdrawals that are happening and you'll notice in Ghana There's a little bit more in terms of withdrawals, but you have to remember that that is in part a reflection of the fact that There is an ATA ATM card that they can get there's a service fee attached to that Which is about four CDs. I believe and since rollout has happened. They've actually lowered the cost of that of that fee So that explains at least a little bit of those withdrawals But by and large there's really not very many withdrawals that have that were happening as of that time We will also be able to look at the average savings per account again This is a short period of time. So these these data are not as meaningful as they will be You know a little bit later, but it gives you an idea the kind of information. We're going to be able to report I would draw your attention to the the last one I don't know if you can see it says average monthly net savings that is the dependent variable that we will be using to Analyze what characteristics are significantly associated with savings outcomes So that's a very quick snapshot because my time let it is already up and I've got lots and lots more data But we won't we won't present it all today We'll and actually the next step really is to not focus so much on the product Pilot but now to be looking at the rollout data the launch has taken has happened now as of April In most of the countries so now we will really be able to look at what's happening We'll get comprehensive Analysis of the savings patterns of the young people will be able to link that savings data To the workshop participation that the young people are participating in to see what kind of effect that has on their saving performance We'll also be able to link this to experiments. We have an experiment in Ghana We'll be able to look at the effects of the savings on health And academic achievements speaking to God to your head this will relate to your health work We'll also be able to Also in Ghana is the experiment with in-school banking So we'll be able to look at the at any of the effects of in-school banking on savings performance And then also in Columbia. We're hoping to do experiment with text messaging from the financial institution and looking at the effects of those messaging on Savings performance. We may also be able to do that same kind of experiment in Kenya so we have lots and lots and lots of data that will be forthcoming as the Project continues to roll out and again. We thank the youth greatly for this great learning that we will be learning from them Okay, that was indeed a whirlwind tour a packed full of information So I think we'll open it up to the floor now just to clarify how long do we have for the discussion period? 20 20, okay, so I have a whole list of questions, but I want to open it up to The people who really made the big effort to come here first. So please let let me know What you'd like to find out? Anyone? Yes Yeah, please introduce yourself to briefly if you could hi My name is Anne fallen and I'm interested in the institutional side of it from a couple of perspectives first of all What the reaction was of the partner institutions how you found them? Whether there was any skepticism on the part of the bank leadership or the rank-and-file tellers and then also a little bit about Ms. Johnson's Presentation what were the product attributes where it was at apples to apples across the four country across the pilot countries Or were some term and some demand or if you could just give us a little bit of the perspective of how it worked from the operational side Thanks so much. Okay. Why don't we go ahead with that question? Okay, so your question is about in terms of what the product characteristics were There was some actually you actually you would be a better person to answer that question but that they were They were all savings accounts standard savings accounts now I will say that in there weren't a lot of changes so in Nepal for example, there was a dual account structure so there was a fixed account savings account combination and by the time we get to roll out they realized it was Better to just have a savings account rather than to have a more complex dual account system They had everybody had minimum deposits It was a savings account in the young person's name someone were custodial accounts What else? Major other differences the for the Ghana account They don't allow withdrawals for the first three months and then a maximum of one withdrawal per month there after and they had different Incentives in the sense that Ghana for example offered an ATM card that you could do you could look at your account You couldn't really make deposits or withdrawals on that There a lot of it. There was variation in answer is the short answer There was variation across but but there were some consistencies across as well The interest is paid. I don't the rates were very minimal I mean it And I would say that the exception to that is that what is the fixed account portion in Nepal Just because it's a high interest rate environment. So in real terms again, you're talking minimal returns We chose not to emphasize the interest part of the product features for a couple different reasons one You know our project view is that these accounts should be as sustainable as possible for the financial institutions And the other thing that research has shown is that kids don't really respond to financial incentives in the same way that adults do Instead when you know Alyssa talks about incentives. We're talking much more about in kind incentives and giveaways So all of the accounts actually offer a piggy bank for the kids to sort of accumulate their day-to-day money in between Trips to the bank and then various institutions offer other kinds of giveaways like a savings diary in Kenya and then also in Kenya They're doing they were doing a little savings bag and now they're doing a wallet instead In Ghana they're doing sort of t-shirts and pens as promotional items on a sort of ad not ad hoc basis But on different periodic bases Okay, who's next yes Hi Alexandra Fiorillo from ideas 42. So I'm came out from your presentation on the data That's actually being made available. So the withdrawals that that was really interesting because you said that I think that the observation was You know, they're not withdrawing a lot of money But just sort of quick remember the number is exactly but it looked about 20 25 percent already being withdrawn But if they're already they're only saving for about 40 days 90 days in the Ghana experience It seems like a fairly high amount of money's being withdrawn So can we just talk there are a few people that were making Larger larger withdrawals, but most of the most of the young people weren't making So do you have a baseline for what you would think sort of a high amount or low amount of withdrawals would be that you're relating that to or is it just a sort of a cultural or Qualitative observation. I think because I was looking at the data in terms of who I mean I didn't give like, you know How many per per child gave but when you look at the average withdrawal amount? It was like 0.04 In the data as opposed to in Ghana. It was a little bit higher, of course And they had more opportunity to and more time to withdraw Anyone else? Yes Hi, Stephanie Halligan with CFED So looking at the survey data that you've already collected and looking at the data you will be collecting in the next few months I guess what are the opportunities to learn from this and apply it to the domestic market here in the US? And what should we be a little cautious about when we're translating those findings to something in America? That's a toughie You know, we're doing we're doing a variety of different Work at at CSD and domestically and internationally and I think I think we always believe that you know both can learn from each other in terms of of the information and in terms of What we've learned so far and what we've seen so far there is some similarity and that in the Seed okay, they were saving small amounts on one point in some other projects. They saw they were saving small amount This is just pilot data. So we don't really we don't we can't really say anything at this point But it looks like right now. They're saving small amounts. So that doesn't look very dissimilar And as we go forward as we see more patterns, we'll be able to make those connections Yes Hi, I'm Mariko from making sense. Thanks all for a great panel Ronnie a question for you. Just wondering. What was the most heated discussion? Do you think at like the financial institutions as they were weeding through all of the findings about you know What they were surprised about and then what they discussed Well, we're sort of like the sticking points for them things about the product that they had a hard time There was push and pull between the youth perspective the financial service perspective and as well as the research perspective That's a great question And actually I think goes to the second part of Anne's question as well You know when we selected our bank partners who incidentally are Banco Caja Social in Colombia HFC Bank as Lisa mentioned in Ghana Kenya Post Bank in Kenya and the Bank of Kathmandu in Nepal We had actually done a little bit of a sort of a competitive process to select those partners We went out on our sort of prospecting trips and talked to a lot of different financial institutions eight to ten in each country And then we asked those who we thought were sort of appropriate for the project and interested to submit Written expressions of interest with a little bit more details to their plans So already right there you're getting a little bit of a pre-selection that there weren't financial institutions who were completely skeptical Or not enthusiastic about seeing the potential of for trying out this market. Anyway, who would have even come up for participation? So I think the conversations we had with these partners are a little bit different than you would have had with a sort of typical run-of-the-mill financial institution That said I think each of them faces a different sort of balancing act internally with respect to how much Investment they can put in this product because youth savings products Especially targeting a low-income market and I should specify that we are not insisting that these banks target only low-income kids Because we do want the product to be as sustainable as possible however, our project and certainly save the children's involvement really focuses on the needs of low-income kids and We did the market research with 75 to 100 percent low-income kids because we wanted to make sure that those product designs responded to their needs And that's one thing that's really Encouraging to me about that pilot data that we're getting is that we have sized the door So that low-income kids can walk through it and they are now who else comes through that door who primarily comes through That door is also a function of marketing as Lissa mentioned And so now that we're going into full-scale rollout will be paying a lot of attention to that But to bring it back these institutions all have different set points with respect to the amount of investment that they can put in it is it is a long-term investment, you know, you're putting in in direct costs right now or you're putting in staff costs right now to Cultivate the next generation of clients, but that investment is going to pay off in terms of revenue after a number of years So how much we were able to make the product features really correspond quite closely to what the market research was telling us Really depended on that and in some countries the banks were willing to invest a bit more and in some countries They're internal processes and their internal hurdles for getting a product approved in Stipulated that you had to show break-even in an X number of years And so we had to make compromises there, but I'm really encouraged to see that across the countries we have data for so far We are getting over half of the account holders From the bottom of three income segments I'd like to also add that one of the things that we we hope to be also able to connect is any cross-sale Products and so as many of you know that that's one of the big issues if well if you can if you can build up a larger portfolio of from these accounts it begins to pay off a little more as well and We hope that we'll we'll be able to track that and see well Wow You know some of these counts, you know added, you know this blown or this that and the other and over the over time We hope we'll be able to make some statements about that as well Just a last comment to build on both what both Rani and Lisa said and see gaps looking at the business case for youth saving so that's what we'll be doing in the youth safe project and One thing I wanted to mention was that We we are supporting so in terms of the financial institutions and their readiness to take this on I think they all saws a market opportunity But we're all we also supported them with the market research with product design and we're supporting them with marketing So I think really how sustainable these products are going to be will We'll see it at the point when the project is done and how what institutions actually end up doing with these project products Once the project is up the other thing the you know on the tension point. I think One place and I won't say which institution but I think one place I saw this tension between what youth wanted youth really want flexibility In the accounts they want to be able to withdraw when they need it and if you see they're using it for emergency So you can see why they would want that and but from a banks perspective the more withdrawals that happen the more transactions that happen It's more expensive So in in one of the banks that that was definitely a pull that we saw with youth saying we want more withdrawals in the bank saying We can allow one or two withdrawals a year and that's it That's where we have to cap it because that's what makes business sense for us. So that's one place we saw it Yes, I just have a quick question about the research design I don't I came in late and I'm out of miss this But are you following at all other people in the household the parents or others? Do they have accounts are they opening accounts too? Yes, we one one of the questions remember in the savings demand assessment. We have to keep in mind that it's not a survey It's a few additional questions. We were allowed to let the loud for the To ask in the account opening form and and remember there's a trade-off between How long it takes for somebody to fill out an account opening form? So it's not a lengthy survey, but one of the questions that we are able to ask in this particular savings demand assessment is Whether the parents have have had prior experience with formal financial institutions So do they have an account with the bank or with another financial institution? So we are asking that in the experiment there is a longer survey that's asked and There are others here may be able to speak to the questions that are in the experiment that ask a little bit of More about the household and and what their experience is Yeah, it's in the green there Hi, Elena Augustine counterpart in a national I was wondering what are some of the indicators that you're looking at for this to be considered a success in the future? And as you move on out of the pilot phase, are there certain countries that you're looking at expanding into? We are as the nine mentioned looking at what are the financial institutions do with this product? Afterwards, does it actually remain a part of their portfolio? That's going to be a huge indicator for us On the client side, we are looking to the results of the savings demand assessment. So, you know, did kids Come did they respond to this market offer? Were they able to build balances over time and then looking to the results of the experiment in Ghana to say so What what impact did this have on their lives? Did it change their future orientation? Did it increase their financial capability? Did it have an effect on how well they do in school? Did it have an effect on other health related behaviors? That's what we really care about But if you I don't know if you're asking about more specific research related indicators, maybe Alyssa you could talk about that I think also, you know, I'm I think we're also interested in their financial capabilities So, you know, we asked the question have you ever had, you know prior experience with the former financial institution to us That's a very interesting finding that we're getting a lot of these young people who have not so You know theoretically then that might be an indicator that, you know, we're building their it's the access, you know It goes back it goes back to the institutional structure if you build it will they will they come and you know Are these kids taking up accounts and who are the who are these young people are are they low-income and and to us? I think it's you know, if we get a large proportion It doesn't have to be all of them But a large proportion who are low-income who've never had an account before that that's certainly another indicator of success It's it's not just about the money in the bank It's it's about the access and the ability to participate in that whole process and you know It's almost as you know, we can get into the human rights piece But but if you know, it's it's the ability to to be a part of be a part of the economic and World in the market world so so there are all those other pieces in addition to a lot of the Developmental outcomes that Ronnie already mentioned Please Hello, okay, just from a health perspective as well to kind of chime in one of the Indicators that we look at from the health sector particularly among low-income youth is number of unplanned pregnancies and You know HIV rate STD rates how often they visit a clinic one of the biggest drivers for young Poor girls especially in Africa is to take up with a sugar daddy For many reasons that they can't afford a lot of the cell phone airtime All of the other discretionary funds entertainment so for them they can go and get their sugar daddy But what is very interesting is when these girls are financially empowered that sugar daddy has a lot less Sway Sugar daddies can oftentimes say I'm your sugar daddy. We're not using a condom But he's got all kinds of different, you know Women that he's sleeping with thus putting them all at risk So just by empowering that girl with a small financial incentive to say hey You know what I don't need that extra $20 to have sex without a condom, you know And and those are things that we very very look very closely at education plays also a very big role We do a lot of work with girls education and the health benefits So at least from a health side looking at those big national level indicators like teenage pregnancy HIV rates and Could be very indicative You asked a question about how this informs domestically as well, you know the research also talks about you know domestic violence and and and When you're no more financially empowered than that than the domestic violence piece goes down So there's a lot of connections that that will cross Yeah, cross inform. Yes, absolutely Just a final comment on the youth safe project I think we have kind of two roles here We're going in with a hypothesis that this makes a difference for youth But we're all it's also a quite a very heavy research project So at the same time we're looking to see whether our hypothesis actually going to play out or not so In in that in those terms the indicator of success really is slightly less Concrete because we we're willing to learn and and see how this plays out versus having one way It needs to go and I'd like to add one other piece to that because actually the time from Time frame of the project is not that long so you can imagine, you know So the so there is a question in the research will will we see, you know I think it's a good question tonight is will we see any outcomes in this short amount of time? We hope that we will and we'll do what we can to extend if we need to but it I think it's an It's important question and important to know, you know, what time frame do you begin to see these changes? I actually was interested in some of the requirements in terms of whether IDs are Something a young person needs to have to open one of the accounts because that's one of the things that we found in a lot of our research in Developing countries in particular for girls because girls are you know much less in the marketplace and much less likely to have say You know a paycheck or even an ID if there is a national ID available to young people and the other thing I was interested in is in some of the Prepared preparatory work that you did did you use the term saving per se or did you say something more like are you putting money away for? you know x y and z reason because At least in my experience if you use the word saving a lot of young people consider that something very formal that only a Rich person does in a bank, you know up on the hill in the capital city Whereas they don't realize that they're actually doing the same thing, but they just don't call it that yeah absolutely so depending on the cultural context we Both made the distinction And said well would when we say savings What does that mean to you and then kids give us all this these different and they range from oh savings is in the Bank oh to oh savings is what I put under my mattress But like in in some countries for example Colombia is the one that comes to mind because there's a linguistic distinction there if you say a rare People think it's a bank. It's savings, but if you say guard that dinero to keep money That's what the language we had to use to be able to focus on the right behavior with the kids So it was very important to know the cultural context and how kids Think about stuff locally and you know on that note I just want to recognize the amazing work that our field staff have done in this project I mean we're you know sort of talking about it here But this the the financial institutions are save the children staff our in-country research partners have put an incredible amount of work And on that note I want to recognize actually one of our field staff who is here Jane may may in the back is the director of programs that save the children Canada and Kenya and has been a real supporter of this work Throughout so so glad you could come and on the second question ID is huge Especially with out-of-school youth and it's true that the pilot level marketing really focused on in-school youth But one of the reasons that we found it so difficult to focus on out-of-school youth in the beginning is is the ID issue huge obstacle for them Does anyone have any ideas on how to get around that? Well, I think in Nepal they they actually made some changes they were able to loosen and you could probably correct me a little bit They were able to loosen it before you had to have a birth certificate from the government Etc to open account now you only need to have a letter from the school from the school So it's it's slightly loosens, but it makes it's far more accessible than what it might have been otherwise And we're like in Kenya a letter from the chief of the of the locality is also now acceptable So that's something that's easier to get if you don't have formal ID. Mm-hmm. Okay, that's great Certificates they just started an account switch kids can open from ages seven and so that that's I think quite an active Conversation that's happening in many countries. Okay, that's great to know and we save the children You know sort of as part of our child protection child rights agenda identity is a very big part of that So one of the things we want to explore going forward, especially in working without a school use is how can we help them do both? How can we help them get papers and then sort of access all of the rights and benefits that go along with that? Yeah, of course. I just had another quick question for Lisa I noticed in that I realize it's just pilot data at this point but in the Kenya outcomes look different from the other countries that you showed in terms of Amount saved and just like the pattern in general look different I didn't know if you were maybe reaching a different type of young person there or if I Don't think we know enough to say However, I all I what I can say is they had 12 branches that were participating whereas the other two had four and you know When once you add more branches that can make a distinction in terms of you know some marketing We don't know you know the details of how the marketing happened, you know Who's in the neighborhood who is participating? So there's I think it will become it may become a little more equitable once they're rolled out to all branches And then we'll begin to see if there's really anything that's special or different about about Kenya Unless you have other thoughts about Kenya. No, that would be my thought as well And I think also the amounts were in local currency, right in on the slide. They were both And also the purchasing power parity Yeah, they were they were very similar. Yeah, yeah when they were converted The else the I had one more question on On the determinants work that will take place with the data that you're doing now the rollout data like The determinants of who you know comes in for these services, etc. Etc. You're going to do more work on that with the rollout data Yes, we had we had more of that work, but Because it's so preliminary and it's really not appropriate because you know one one tends to start comparing and Come to lots of different. So I I don't think we don't feel confident about Presenting all of that for the pilot data, but we will definitely do a lot more, you know Bivariate analysis multivariate analysis going forward because I mean it's there's a there's a wealth of data and as Matt Despar pointed out to me that earlier I'm kind of lost in the weeds of the data, but he but he reminds me that you know In a survey the kids can tell you they're saving but in this this data there This is what they're actually doing. So so this is real and and so we'll we'll have a better idea of really what's happening It's like biomarkers with health reporting, right? Go ahead Ronnie On that exact issue It strikes me that the kinds of research you do both formative and evaluative so much Relevance to what we are looking to do with youth and financial services grow the market change behavior One I mean I think one of the nice parts about the project is we have a way to sort of do formative research But then also track the reality of it because there's what people say they want or they do and then there's what they really Want or they do and I think I would think even more so with reproductive behaviors How do you track that and how do you sort of? Track the differences short and and that's a really good question because we're often faced with that in health care Where you're like are you using a condom and they're like? Oh absolutely every time and you see them two weeks later at the clinic and they're like I missed my period and you're like rights Of course a lot of times we do a lot of data triangulation. So what? and with qualitative data it's it's With quantitative data it can kind of be a bit tricky So a lot of times what I'll do is I'll hold a focus group discussion And I will have the group kind of talk about you know for example wearing condoms Negotiating condoms and then I'll present to them the results from the survey and often times It will conflict with what they're just told me and be like yes But the survey among your peers says this and a lot of times that's when you can get the really rich information out of them You know it's be like well I didn't wear it in this instance my rent was coming up You know my sugar daddy said he give me an extra five dollars if we didn't wear a condom and And that's where it comes up So sometimes presenting that survey data in a focus group discussion to actually get them To justify it's like you know the two different findings and it can be a very very rich experience Needless to say, but it can be very hard especially with the savings and To actually see what they're doing at the end of the day Definitely, I mean there are also methodological experiments to try and interview people in different ways instead of face-to-face Verbal interviews that you know having them answer questions using a little like pin pad and not have to face a human being to answer the question So there's work going on around that in terms of self act more accurately self-reporting We give them like little sexual diaries And they can you know talk about that and then at the end of the day, you know They'll share them with us everything's anonymous But that's also a really interesting way to track their thoughts and then track their behaviors side by side So I think we're out of time on this panel and I just want to thank the the panelists for doing a great job And also for the participation from the audience as well Okay, you can stretch That's all Welcome to panel two Where we're going to be focusing on nudging behavior and savings. I'm Reed Kramer I direct the asset building program here at the New America Foundation And I'm also a member of the steering committee on the youthsave project So really it's a pleasure to have everybody here the panelists and those in the room and our funder and I really appreciate your your work and efforts on this project So neoclassical economics Tells us that individuals will rationally choose To maximize their utility Subject to constraints That's the theory. It's taught all over the world But we know in the real world it works very differently and in the last 10 years or so I'd say there's been a lot of interest in the rise of this field of behavioral economics Which is really a body of work that focuses on, you know, how people make decisions in the real world And it's very relevant body of work that's gained a lot of attention among policymakers and people that design programs That are very interested in achieving certain outcomes maximizing outcomes and I think one of the robust findings from this work has been that the You know the economic decisions that people make are strongly influenced often By the result of a no decision by doing nothing the default And we've learned in a lot of different settings that the default can be pretty pretty powerful inertia is a pretty powerful force We've also been learning a great deal about ways to kind of nudge people along move them along into better outcomes So that's what this panel is going to look at. It's going to look at different ways That we can nudge youth along in managing their their money and their finances and hopefully increase their financial Capability so we have four presentations The bios are all in the the handouts People are going to come up one by one. There'll also be PowerPoints Then we'll all get together at the table and have an extended discussion. So first we're going to hear from Jamie Zimmerman who directs our global assets project who welcomed us here today. She'll start us off then Matt Despard is the a clinical associate professor at the school of social work at the University of New York North Carolina at Chapel Hill Julie Lee is with us. She's a training officer at Microfinance opportunities and then Alexander Fiorillo is from ideas 42 She's vice president there and we'll hear from her as well. So let me get out of the way Jamie Okay, hi Just a couple things before I get started that I just want to throw in while I have the podium and the ability the first So I think I'm the only person here today. That's not doing a PowerPoint Presentation, so you're just gonna have to listen and look at me. Sorry. So bear with me on that but I also wanted to point out a recent edition of the Washington Monthly which is a I think By monthly publication That is just always full of some really great content for those of you not familiar with it The most recent edition has it's actually focused on asset-building and success and of Americans of citizens in America, but it's actually I think something to be really relevant to everybody here in the room But wanted to point out that there's one opening kind of article I would don't even call it really an article opinion piece at the beginning of this Edition that is titled where are the women wonks and there is and I thought about this as I was looking at the last panel And the makeup of our day and it says very clearly in this in this opinion piece that you walk into the run-of-the-mill DC Think tank and what you see is a panel of the gray hair Mint testosterone in suits and so I just want to say to read and to Matt welcome to the new minority This is not the Not the way of the future so I would like to just you know Maybe point that out to whoever that author was that maybe she could she might have gotten a couple things wrong So I know I'm eating into my time So I'm you know won't dwell on that any further and I you know stickler on the time thing So I'm also just wanted to point out that I am I'm here today to present some A new paper that we're releasing today called creatures of habit nudging savings in youth The author of this paper pile pot duck was with us for with with us here at the new America foundation I'm within the youth save initiative for a number of years But just you know recently moved on now She's doing some really exciting field work in India and China and couldn't be here to present today So I'm going to present on her behalf and I hope I do her justice But I just want everyone to know that this is her brilliant thinking and not not my work alone. So Just wanted to also throw that out there So, you know, we've already heard I think a lot about the potential benefits to youth Financial markets even whole economies of being financially included and having financially responsible youth and Clearly to me the promise of the power of asset effects the economic social civic and psychological effects that having assets Has on people is enough to encourage Decision-makers to want to find ways to enable and accelerate the pace of enabling youth to lead productive and included lives But the act of saving and decision-making Surrounding it can be quite strenuous Particularly for youth and even more particularly for low-income youth You know as read was saying often rational choices are not made and there's this growing body of knowledge That tells us that nudging behaviors can potentially have a powerful impact on enabling financial capability I think there are still many many questions around financial capability that need to be answered We even still are debating how to define it and what it means and and I and I think that that's a great debate to have But also questions on how best to do it. What's most effective? What could have the greatest impact for whom and when? So the paper I'm presenting on today, and it's outside amongst the slew of other papers, but it's here And I encourage everyone to grab it or get one online The paper I'm presenting today shares some new perspectives on Nudges and interventions to create very specifically sticky savings habits at an early age when behaviors are still very malleable And this may have significant impacts over the life cycle or the developmental phases of low-income youth savings habits can convert what We say is an otherwise pretty taxing mental process into an automatic easy action through practice Over a longer period of time so in effect practicing skills that are part and parcel of saving also said these things like self-control planning future orientation can also improve cognitive strength and In livelihoods through a number of multiplier effects We think when you add the proper support services So in this paper we argue that practitioners and policymakers could maximize the effects of savings habit formation in youth by a Nudging the savings as early as possible and be taking advantages of these developmental touch points in the life cycle of youth So I'm going to just cover four points really briefly today in the panel And then hopefully have more time for Q&A the points are why nudging financial capability among low-income youth is important perhaps even necessary to the role of habit formation and how you successfully create habits three the multiplier effects of skills developed through savings habits, especially when you start young and For the importance of intervening at critical life stages. So, excuse me number one Why do we need to nudge financial capability among youth? So, you know as we've heard I think for the last hour and a half that savings is a important Important contributor to individuals well-being. It's a decision that requires the use of Cognitive capabilities such as self-control willpower future orientation and these mental or cognitive resources kind of like The energy we expend and the things that we do in life. They're limited and they're drainable In the short term. So when burdened with economic choices, we deplete these resources We use this energy Leaving less mental control to carry out other important behaviors including limiting our spending Setting aside savings for future needs and the like so, you know while the Well more well to do and the rich are also taxed by economic decisions surely that are mentally draining and stressful They face far less severe and regular consequences from these decisions than do the poor poverty is I believe is Sindal Malanathan call has quoted Psychologically important because it's a form of scarcity Which causes people to experience more stress expand greater willpower than their more affluent counterparts So saving in an asset building can I think mitigate the scarcity? But the same time money itself and that act of saving is yet another economic decision that the poor will have to carefully Calculate in their lives So, you know this brings me to my second point, which is the role of habit formation and how you can create these savings habits Fortunately, our brains are structured such that human beings don't actually need to use up all of our mental resources Are cognitive thought on all actions? It turns out we are creatures of habit You know we argue that one approach to creating savings habits is through establishing What some behavioral economics refer to as habit loops of cues routines and rewards? I'll run through that very briefly and so studies have shown that habits are formed often when a specific Environmental cue triggers a behavioral response or routine that often results in a reward so one example that we use in the paper that I think maybe some of you could relate to is a moviegoers who Habitually eat popcorn when they go to the movies So at the the movie theater is the cue that triggers this behavioral routine eating popcorn that satisfies them in some way Which is their reward and it tells the brain that this loop is worth remembering and repeating in the future And they just kind of do this every time that they go and that's how it works An environmental cue or context may create new circumstances that bring about behavior change For youth the best time to create savings habits may be during these key transitional periods in their lives when new cues You know such as nudges just in time education Other interventions can lead to new routines and new rewards And the context of savings rewards can play an integral role in perpetuating habits So small prizes seeded accounts match savings or simply the satisfaction of achieving a savings goal Can nudge a person into continuing their habit loop You know so this leads me to my third point on how the skills Underline these savings habits can have other multiplier effects on youth livelihoods and the earlier you start the better Which I just think is an underscoring of you know, why youth why early why now? So when people choose to save money They call on these certain inherent capabilities or qualities these cognitive skills the self-control in the planning to attain a future savings goal and recent studies have shown that self-control and planning are two skills that when developed very early in a person's life have strong associated multiplier effects and can play an important role in enhancing other aspects of Economic and social well-being so therefore the act of saving involves practicing some salient behaviors that can arguably counter the mental fatigue of economic decision-making in life But also lead to other positive outcomes Unfortunately though low-income youth are at a big disadvantage in developing these skills early on they face a lot of economic uncertainty They don't have adequate services the conditions of poverty overall impose barriers to Developing these skills so we believe that there's a role to play by policymakers donors practitioners and understanding and filling in that gap by creating testing funding interventions depending on who you are and what changes is That help create these habit loops during key life cycle Or trigger phases points where behaviors of youth are most malleable and where the positive effects of interventions could be maximized Which brings me to my last point which is on these interventions themselves the program of policy level and event interventions When delivered at these transitional phases in the youth life cycle can maximize the impacts of savings habit formation So tonight and I'm gonna take one more minute Since I wasted that first minute. It wasn't a waste. I'm glad I said what I said. I don't take it back But I'm not getting off the podium so just really quick really quickly these interventions so At different points of the life cycle and we go into a lot of detail in the paper So I won't belabor it now But I think I was going to reference some the presentation that I saw tonight I did where she talked at length of different life cycle phases of youth And I think that that's really valuable in the paper that we wrote we take it a little a little bit broader we're looking at you know The life cycle starting actually from birth and are in the first phase that we look at as early childhood 0 to 6 and at this age, you know children aren't really saving themselves And so we're not really pushing for any sort of you know nudges to the children at that time But this is a time when children can be heavily influenced by the by the decisions their parents and caregivers make There is a really great Data that came out of the seed initiative on child development accounts on You know the impact that that had on parents and the and I won't go into a lot of detail about that now Since they don't have a lot of time But that these parents reported a self-perceived positive effects on self-esteem self-efficacy hope for the future future Orientation a sense of security fiscal prudence and interaction with their children about finances all really valuable things And then later the parents also observe the positive effects on their children Including the fiscal prudence of future orientation in the self-esteem So that seems quite powerful. The second phase is middle childhood ages 7 to 11 This is a time in life where self-control and self-regulation processes are relatively mature and youth begin to develop an understanding of the financial world by observing and modeling their parents behaviors It's also a time when school teachers peers and so on are integral to the youths to young people's cognitive development But it's also unfortunately a time in life where many children in low-income countries are dropping out of school Our and there's a I think a third the statistic is a third of children not completing primary schools Which are leaving a lot of adolescents at the margin. So this period I think signals a ripe opportunity for interventions that create fresh savings cues immediately when you enter the formal finance formal schooling system And provide a stable context to maintain school attendance and savings And then finally the last the last phase is adolescence ages 12 to 18 And this is where we focus a lot at focus almost predominantly All of our energy and youth save 12 to 18 years old And this is where the brain is undergoing kind of a burst of development and processing cognitive flexibility and goal setting They're all relatively mature by the age of 12 Although their executive processes aren't fully established But during this time youth are heavily influenced by their peer peers and engage in a lot of risky decision-making Dropping out of school abusing drugs alcohol practicing unsafe sex We heard a lot about this in the last panel so interventions that can effectively step in and cue savings routines while Simultaneously improving young people's chances for productive and healthy lives by creating linkages to public health Education initiatives and so on would be really valuable here And they're also there are actually some really interesting examples of some interventions that are happening right now In Malawi, Uganda, Mexico elsewhere. I won't go into those details. So just to conclude I think right what seems critically important in all of this just to sum it all up and thinking about new ideas and creating Habit loops and there's a lot kind of to talk about in eight minutes or less But would be to think of timing and types so timing, you know start young use these life cycles use these Opportunities for intervening and then types, you know considering the actual tools and rewards those cues that you use the rewards that that are You know part of that habit loop Considering the specific goals of those specific times in the life cycle or whatever that development objective may be What are really powerful ways to think about you know how to Think creatively about the way that we could Do more with the with this kind of new perspective and new idea And I'll just stop there since I know that I'm over but I'd be Happy to discuss this more provide some examples and so on during the Q&A. So thank you Great. Thank you, Jamie. And I'm Matt Desparg. I'm glad to be here this afternoon. Jamie mentioned Gender minority. I'm actually I'm a social worker. So this is very familiar territory for me And I'm also in the gender minority at home. I have two daughters age six and fourteen And so I have a self-interest in this session because I'm always running these nudging experiments to get them to save and So I'm kind of curious if there's any validity to to my ideas So I'm gonna be talking about what's happening in in Ghana In the you safe project and I want to very quickly add that I'm only reporting what's what's happening there if if you like what you hear about what's happening in Ghana by all means give credit to our Ghanaian partners HFC Bank and If you don't like what I have to say about Ghana then blame me because apparently I mischaracterized their their efforts in my talk On a more serious note that the you safe teams thoughts and prayers are with the people Of Ghana this week as they mourn the loss of their president dr. Mills Who passed away earlier this week? Okay, so let me let me start with Just a question about How Ghanaian youth will be nudged To save what with the bank And and so these are the plans that are drawn up to be implemented starting in September When the youth return to school and bear in mind everything that I have to say today is about the the in-school population in in Ghana So so Jamie just got done Talking about different types of nudges and I think just articulated those very nicely So I want to relate what's happening in Ghana to some of the things that that Jamie just mentioned The the in-school banking strategy Of course, it's not new. It's happening on a very large scale in Sri Lanka through Hatten National Bank It's actually been around as long as the late 19th century But there's some interesting features to it in Ghana The the bank officials will be coming into the schools making it simply easier more accessible for for youth to to make deposits teachers will be Reminding youth on a weekly basis that Friday's banking day and and so that's kind of what what Jamie was talking about in terms of the environmental queue That that youth will receive and I should hasten to say that it's a salient Environmental queue because teachers are respected authority figures and and so it'll be an important reminder That the youth get when it comes from a teacher the visits will be weekly So there's the encouragement of some habit formation kids get used to The the opportunity to make a deposit Every Friday, but by the way when I was looking at the the history of in-school banking Late 19th century the banking days were on Monday and and so maybe we've evolved and are thinking about in-school banking That we should make banking days on Friday before kids blow all their money over the weekend So another thought is is that the just-in-time education that that Jamie mentioned will happen when HFC officials come to the school not only to facilitate Deposits but also to offer some some low-touch financial education and this is not going to be soup to nuts financial education It's going to be really focused on on saving and helping kids see The connection between saving and their longer-term goals helping them articulate their longer-term goals Help them and this is an important one Help them understand how to save you know how to set a Goal for saving and well, how much do I need to save on a weekly basis? And how do I do that without compromising meeting my basic needs and you know these are you? Not compromising having a little fun as well So they're going to help the youth figure out how to save not just why It's important and the thing that's in it has really impressed me about HFC Is they're very very concerned about the nature of the interactions that bank officials will have with youth? The training will not just be well Here's the mechanics of how you Facilitate in school banking the training is going to be on soft skills. How do you make interactions with bank officials? Friendly and enjoyable for youth. So it's going to be very interesting to see how that that rolls out oops, okay So looking just briefly at the the experiment in the research design To answer the the question how we know if these nudges work There's three different treatment arms and and so we have this distinct treatment arm That allows us to look Differentially just at the effects the treatment effects meaning the effect on on actual savings of of these sets of nudges as opposed to general outreach and marketing the cluster randomized design is really important meaning we have Randomly assign whole schools to either treatment or control Conditions and that's really important Based on what Jamie just mentioned that Youth are heavily influenced by their peers So if we didn't randomize at the school level It would be research chaos because kids would be nudging each other that the kids in the treatment group would be nudging kids in The control group and we don't want that because we wouldn't be able to see the differential effects So we're pretty excited about our our design It's also important to acknowledge that with self-report survey data there's a certain amount of measurement error But with the random randomized design On a probability basis. We know that measurement error will be equally distributed in the treatment and in control groups But as Alyssa outlined the savings demand assessments are going to be or are going to prove really critical to triangulate some data But but also To serve as those direct observations of saving behavior So just a few words about what we've discovered so far from our baseline survey data And in it it looks very very similar to the market research that Ronnie Deshpande outlined earlier I was also really struck by How similar the findings are to What the youth start market research has has borne out which is another MasterCard Foundation funded project That that generally speaking Kids are saving Relatively small amounts of money or I should say more accurately. They're setting aside this money And it's for they're holding it for shorter durations in for more near-term Consumptive needs school fees Personal items and so forth on a positive note They the the youth in Ghana have told us they're really Excited about banks and think interacting with banks is an okay thing They just don't know a lot about how to go about doing it So they seem to be predisposed to saving with the bank and that might be related to the fact that about three-quarters of them have had Savings-focused financial education in the schools already. So there's already been some exposure in some predisposition, perhaps Lastly the thing that we are going to be looking at more closely Is this finding that? There's two important predictors of youth's money management behaviors that are starting to come out of the data based on our multivariate analyses and that is Parents who explain their financial decisions Is an important predictor of more robust money management behaviors? And in youth who have some form of earned income Fetching water cracking stones helping mom in the market reselling items and and and so forth Is also an important and very strong predictor of money management behaviors Thank you Okay, so that'll magically okay great So hello everybody my name is Julie Lee. I'm a training officer at micro finance opportunities We are a global NGO established in 2002 and Our focus is understanding the financial realities of low-income households and developing consumer based Solutions to those issues We're probably best known for our work in financial education We established the global financial education program. It's the first international program targeting Low-income households with financial literacy Since that is my background That's actually going to be the focus or the Perspective that I'm going to come from when talking about nudging behavior so I wanted to begin with talking about how we see financial Capabilities and we see financial capabilities as the combination of the knowledge skills and attitudes Needed to make informed financial decisions and to be able to meet those financial goals Along with the opportunity to use Or apply these knowledge skills and attitudes so financial education is the process for broadening understanding of financial options and Principles the skills to be able to use these financial products and services and the product and to promote attitudes and behaviors that support effective use of scarce financial resources So in this way financial education can be seen as the foundation or the basis which with Young people can foster lasting behavior change So for example a reminder to save in itself may not be a Way to spur action among young people if a person if the young person doesn't have the confidence That she is able to save or that she has the knowledge or skills to be able to develop a budget or create a savings plan so at Microfinance opportunities. We're looking at how financial capabilities can be increased through a variety of methods Integrating into a single strategy. This can be done through awareness raising Which sensitizes people to basic money management principles Direct training which can provide a deeper knowledge that allows people to evaluate their options skills to manage their resources and increase their confidence to be able to act on these knowledge and skills and The strategy also looks at how to reinforce these messages through other channels Ensuring that the messages are not one-off but repeated The strategy then looks at providing young people with the opportunity to put into practice What they have learned and this ties directly into their access their ability to access and use financial services We looked at we look at different how different touch points or contact points With youth can be leveraged to nudge behaviors and these touch points can be in schools and after after-school club savings group meetings and mobile phones or at the bank Microfinance opportunities has been experimenting with different types of interventions in the past. We've done work with Adolescent girls and a program funded by the Nike Foundation where we designed financial education To accompany specially designed savings products for adolescent girls In this presentation, I'm going to be focusing on a more recent project in Columbia where microfinance opportunities worked with Save the Children in Columbia and the youth state consortium to design an SMS Program campaign that delivers financial education to promote savings among youth in Columbia the objective of the SMS messages were aimed at increasing savings behavior Among youth who opened the savings account that was specially designed for them MFO provided technical assistance to design 13 SMS messages that were delivered to the youth on a monthly basis and these Messages included practical tips on how to save and motivational messages to help youth reach their individual goals The campaign launched earlier this year And it's running now, so we don't have results to share But what I wanted to do was focus on our design approach to this SMS campaign So I'm going to talk a little bit about principles of adult of young youth learning motivational versus skill building Well-timed triggers and integrating the activity to a larger strategy our approach to designing financial education is to integrate integrate key principles of youth learning and Some of these may be intuitive, but I'll walk you through a few of them the idea that these that Financial education Needs to be relevant so in the SMS messages we provided specific advice and Based it on the market research that was conducted from save the children and MFO's own research on With youth and so for example in the SMS messages From the market research we learned that youth tended tended to save for short-term goals only and then once they Once they reached that short-term goal Then they stopped saving so we included a SMS message that encouraged them to continue saving Even after they've accomplished their first goal Okay, I see I have a little time left, so I'm going to move very quickly so Experiential is Giving the youth concrete achievable activities to do and reflect on So for example one SMS message could be write down your expenses every day for one week and then look at what you can reduce So not all of these principles could be applied To the SMS program, but there they're also equally important such as engagement engaging where youth can explore ideas through questions in dialogue Cooperative environment where youth feel like they have the opportunity to belong and connect with others in a group and Inclusive of families any intervention should Include the parents so that because the parents can understand and support the youth in changing their behaviors and meeting their goals And I'm sorry and related to this principle of youth learning What we learned from our own work with youth is that the importance of keeping the message simple and shareable By this we would be able to have the girls Have youth with digest and remember the messages and it makes it easier when messages are short to be able to be Repeated and shared with families and friends And also this sharing itself promotes the youth principle of cooperative or connecting to other people in a group Motivational and skill building when we were Developing these SMS messages. We were looking at a behavior model set forth by a doctor BJ fog at the persuasive Tech lab at Stanford University Where they're looking at the use of technology and behavior change and they identified three factors that prevent People from changing their behavior One is the lack of motivation To the lack of the ability or the skills needed to perform their behavior and three the lack of a well-timed trigger To perform the behavior and this trigger is basically the thing that tells us to do something now So within the SMS project We had a debate about whether or not we should focus on that focus the messages on being purely Motivational or whether we should impart some practical tips on how to save Which would improve their ability or their skills to be able to Save and one of the concerns that we had was if we created tips for saving that the youth might perceive these messages Like the bank telling them what to do similar to a teacher or parent But on the other side we thought that if we didn't give them any tips that address the know-how We wouldn't be addressing the ability factor so in the end we tried to Streg a balance between motivational messages and instruction and Here the tone of the SMS messages play an important role I'm just going to move really fast So the idea of a well-timed trigger Is thinking about when the mess when the youth are most receptive to a message and when they're most likely able to act on the Message so in this SMS program we we time the message to be delivered on the first Friday of every month and this was because parents are Usually paid at the beginning of the month and so since they are the source of the income that they would be saving we chose To deliver in the beginning of the month and also it Saturdays was usually the time that youth Would be able to have time to go and visit a bank branch and make deposits So by sending messages on Friday the first Friday of every month it gave the youth time The time to plan their visit to the bank and then just really quickly The idea of the SMS messages can be you can be integrated into a larger strategy The bank staff in the program were the ones that were the first initial contact that the kids had with the bank So the bank staff could would explain how to develop a savings plan open a savings account and Address any questions they had with products the involvement of the parents we had proposed that That a letter be sent to the parents along with a welcome kit for the kids when they opened the accounts So the parents were informed and could it would create buy-in and then the idea of linking to the banks existing marketing or promotional strategies the idea of if they have a website that they could Devote a page or create a page specifically for youth and it would have additional resources or activities that the kids could follow through on And This I don't have time to go over but we can I can talk about it during a Q&A if there are any questions This was another example of an intervention that we did in Mongolia Which involved financial education clubs field trips to the bank and the idea of student bankers. Thank you Hi everyone My name is Alexandra Fiorillo. I'm with an organization called ideas 42 Um Magic here it happens here first, huh? It happens right here Let's go back one slide if we can So ideas 42 we're an organization a nonprofit based in New York City We are behavioral experts So sendable nothing who Jamie referred to an elder sure fear who's referred to a lot in the paper or two of my founders my Organizations founders, so I actually think it's good to go last I'm not doing anything. I'm gonna let whoever's doing that do that, okay So it's actually nice to go last because I think that I'll be able to kind of bring sort of broad in the filter a little bit and Go back up to more of the framework that Jamie was starting this panel off with Can I know so I don't even know who I'm talking to who's the magician? I don't know, okay? So ideas 42 we're actually a sort of a newcomer to the youth savings market Again, we are behavioral experts. I my entire career has been in the microfinance industry Internationally, so I bring that to the table, but we're really focused on the behavior change moment So how can we and I'm gonna talk about two types of behavior change one is enrollment within youth savings And then the other is usage and continued usage. That's why I was asking the question earlier about withdrawals But our organization just to give you a little bit of Background we work in basically three buckets. One is educate where we do executive education courses and really try and Help popularize The non-freak economics more of the sort of academic research focus behavioral economics insights And how can we actually take insights from behavioral economics research and behavioral psychology and apply those to the field? So our organization actually our mission is to use behavioral economics for social good Everything we do we try and have some sort of social impact and also achieve scale scale is really important to us We do a lot of scaling up and replication work Our second bucket is what we call assist more commonly probably referred to as sort of nudges as you've heard today So how to teach policymakers or practitioners? How be insights behavioral economics insights can help them improve product or policy or program design So that's a little tweaks to programs that are already in existence Then the last bucket is our invent bucket. That's where we're actually creating new products or new policies or new programs That are behaviorally informed and designed with a lot of these insights from behavioral economics I'm gonna touch on two field studies that Really focus more on the invention side of our work But are I think relevant to the conversation today around youth savings one's a domestic project and one's international for adults But I think we can draw a lot of interesting insights from that project so one thing to important to one thing that's important to acknowledge is that We can't just sort of throw things at the wall and see what sticks the behavioral toolkit is really large actually much larger than Probably we think of and some approaches are actually contradictory to one another So it's really important To know the context and know the clientele that you're working with and design nudges or interventions that Are designed for the appropriate diagnosis. I'm gonna talk a little bit about what I mean when I say diagnosis today I'll talk through the process a little bit on the next slide actually Let's see if I can do my own magic here So let's talk about the psychology of saving five minutes already my lord psychology of saving so One important aspect of our approach ideas 42 approach is to recognize that surface similarities between Projects may actually mask substantial differences. So for instance the two field studies I'm going to talk about both address savings and psychology of savings But in radically different populations and so we're going to see that the treatments are different as well based on the kinds of populations that they're addressing We have a process that's called behavioral mapping And this is a process that leads us to a set of hypotheses related to the psychological bottlenecks that might be at play Preventing whatever outcome that you're trying to achieve. So what's your objective outcome? Why are we not achieving it? What are some of the psychology that might be at play preventing you from achieving that outcome? We have actually done extensive field work in this youth savings area, but a first approach Might be to separate enrollment and usage So I'm going to go ahead and just jump to that and we can come back to this if we need to later on And then this is the time I will just highlight that there are sort of four types of interventions This is a little bit technical for today, but we can certainly talk about it during Q&A I'll try and be mysterious and not say too much about it The first is de-biasing the person the second is de-biasing the context the third option for intervention is Re-biasing the person so actually Enforcing a bias that previously exists sorry the fourth is reinforcing biases Which is actually trying to perpetuate a bias that already exists and we can talk about this is sort of to read comment about the defaults We're using here an enrollment of a product as an example And you can see how each of those might relate to different types of interventions Okay, so let's talk let's get into savings accounts. Let's talk about enrollment So getting used to enroll in savings accounts requires a few things There's the decision to do so and then there's actually the the action and I just want to unpack the decision So the intention to enroll if people already want to save money. That's fabulous, right? You've already gotten over that sort of intention hurdle So we can move straight on to the action But actually the the population may not have the intention to save So this is an example of where the behavioral mapping has to be very context specific And if not if the population doesn't want to save or doesn't have the intention to save you have to you have to actually Create that intention for them or help them create that intention. You can do this in two ways You can you can create the intention to save In in the context if the diagnosis that people feel like savings isn't for me or I'm not someone who saves or Savings isn't important for my lifestyle You could actually use social norms or identity formation to help create the feeling like oh other people are saving in my community In the school that Matt that Matt talked about, you know, my peers are saving There's other students that are saving that feels like something that I could do as well So creating some sort of identity formation Or if people are really underweighting the the future benefits of the savings that they might accumulate then you can offer an Immediate prize so create some immediate saliency of what that savings account might be and this was this was talked about earlier today as well But I also have to consider people who have the intention to save that want to save But who don't take the action for some dissent for some reason and Reid was talking about this So the the failure to decide what happens in that situation So we might see limited self-control or perspective memory, which Jamie referred to earlier So people may simply forget or not have the self-control so you can use messaging to actually remind people to sign up Or it could be that there's a hassle Related to savings. So small changes to make people's lives easier can actually have a really big impact in how they Enroll and take up savings accounts. You can also offer Implementation assistance for anyone's familiar with Phil Oriopoulos's work on FAFSA form enrollment something like that So actually helping them to complete the enrollment forms or to complete the process of enrollment So thinking about the future and making savings calculations can be made can be more difficult at certain times And this is what gets to the the trigger work that the Julie was just talking about So actually creating timely triggers that are matched up to the cycle of the of the savings behavior Just a couple of ideas on the use of savings accounts So once you've got people enrolled then how are they going to actually use it and continue to use it? Again identity norms can be a factor in the decision to actually save even if you have an account you need to Redecide every time you're going to actively put money into that savings accounts every time you get a paycheck You actually have to make the decision and then take the action. Yes. I want to save again So showing people an implementation plan that they drove they drew up previously So I made a commitment to save reminding them of that commitment that they made when they enrolled in the project in the program might be a way to Make the prospect of savings less daunting and remind them that they decided back then that they wanted to be a saver So really making that identity salient Reminding people of the early decisions to save can also make people more likely decide the same way again and again So repetition of behavior since people really like being consistent which goes to Jamie's point of habit formation and finally you can remove the decision To make that savings commitment every single time by making the savings decision automatic. So by direct deposit or other means I'm going to save the rest in case there are other questions about the psychology's at play. I just want to share two quick examples So the first this is actually a study in Malawi was farmers tobacco farmers These are adults of not youth, but again, I think it's relevant So these tobacco farmers in Malawi get paid at the harvest at the time of harvest So not before and they often don't save to buy fertilizer or other inputs for the next harvest So the study took farmers who didn't have savings accounts and divided them into three groups a control group Some were offered a direct deposit account with no commitment features and then others who were offered direct deposit with commitment device Included it's our clever little lock and and money there the non commitment account group had the same outcome as the control group Which is not great But the farmers who got the commitment savings account actually spent 27 percent more on their inputs and also The and 20 excuse me 22 percent more in outputs as well, so they earned 22 percent more in outputs So the commitment features put an extra 29,000 Malawi and kawacha, which is about 108 usd into the farmers pockets Just that little part of the commitment savings device And if you think about 108 usd in Malawi, that's actually quite significant relative to their per capita GDP There's every reason to think that these returns would be the same or higher in future years So this was a one-time project, but you can you can draw out the conclusions later on So this was a case of inpatience and limited self-control where the farmers weren't Making current decisions for their future selves where we really needed the full power of equipment device to see the positive outcomes And just on the other side of that a youth example, and then I'll be out of your hair This was a domestic project here in DC Actually the the summer youth employment program in Washington DC this treatment was applied to these youth Participants in this program and the issue that they were facing was really enrollment. They were having uptake issues So on the decision side these teens might have decided to save they might have had the intention to save They might have had a high discount rates that they thought it wasn't worth it to sign up So they wanted to save but there were other things getting their way different psychological bottlenecks Preventing them from actually taking the decision to enroll in the program and then use it Even if these youth had decided to save then setting up a bank account also could have been a hassle So there are lots of potential reasons that the children that the youth were not Enrolling in the program even though the program thought that it designed for all of these different hurdles So once you actually did the diagnosis They they found a few different things were at play Discounting the norms and there was this hassle factor of actually signing up The intervention was to send an email offering a change in payment method From a prepaid debit card to a direct deposit situation with or without automated savings deposits There were options and if you signed up for the automatics of the automated savings You were actually entered into a lottery to win a cash prize So that was that immediate prize component that I mentioned earlier So very importantly it was easy to make an account and set up the direct deposit. It was only a few clicks This was an electronic system There's only a few clicks after opening the email and the youth never had to even visit the bank So we were really trying to reduce the hassle factors in this particular pilot The email was also framed to eliminate the perception that prepaid cards were the default payment option Even though that they were so it was also a framing issue So sort of messaging and marketing is is how we would call it in the field framing in our behavioral psychology world So we don't actually have a control group in this project But of the 9,000 teens in the program who received the email 1300 signed up for direct deposit and 800 of those were actually newly created accounts. So the numbers are quite encouraging and of those 1378 percent set up automated savings. So that's a pretty remarkable number And this is a pretty broad and low-touch interventions So there aren't really precise takeaways necessarily But one of the main lessons that we drew from it was that making it easy for youth to save leads to more savings And this is maybe really obvious, but it's really important So we can easily imagine that if there had been some more work to understand the precise Psychologies that were a play of the clients Including obviously measuring with a control group and seeing what the effects would have been a more carefully designed intervention May have even worked better and had better outcomes So just to last slide sort of work to be done. I'm always thinking about next steps So we do know a few ways to get people to save we've got some tricks up our sleeves There's been a lot of work done in the behavioral psychology and behavioral economics field lots of interesting and clever Interventions have been tested But finding the most effective ways and the ones that are most specific to the youth market Requires I think a lot of future and further evidence and research We need to understand the bottlenecks keeping youth from saving. They're likely going to be different the psychological barriers are likely going to be different than adults Just different things are relevant to them different things are front and center in their minds and they've got different challenges in their home lives and their school lives a Little bit more theoretically I would just conclude by saying that most of the behavioral economics insights I've talked about are based on studies and adults and we really need to know more about how all these psychology will play out in Younger people, but I think we do have enough to get started in terms of designing the savings products It's just a little bit more consideration around the context and the actual individuals involved to figure out What some of the other defaults could be or ways to incentivize youth to enroll in the program? And then our concern is really continued usage And we just would caution people to be very careful in your diagnosis We spend a lot of time really focusing on the diagnosis of the problem We make a lot of assumptions in our work and the microfinance industry I know so we'd like to spend a lot more time diagnosing what the challenges are before actually jumping to the design of the solution So we can certainly talk through some of this in the Q&A But just wanted to provide a little bit of a slightly different framework. Thanks so much for having us Great look forward to an extended Conversation here involving all of you in the room We'll have a roving mic around So let me know Let me just Start by commenting how there really is a high bar to clear here when we're focusing on youth savings savings is an easy for all of us and Then for some of us The non-youth population there might be some things in play that we can take advantage of like our employment setting certainly the way I save is Number of years ago when I started working here. I signed one form and I was automatic, you know I rolled in our 403 B Plan and it happens automatically every two weeks and maybe I've periodically Revisited it with a different allocation, but essentially not a lot of thought goes into it. That's not what we're looking at Here with this population and I guess I wanted to ask You collectively to think a little bit about this Interaction between maybe that the nudge and and the default that that might be there and if there are ways to think more automatically about how we could introduce some Features into the process Maybe from the experiences that you've observed in the field or some of the theoretical work how you guys approach it at ideas 42 so kind of this trade-off maybe between the nudge and the default and ways to kind of make them align Alexandra, maybe you'll start So can you guys all hear me? Is that okay? Okay So we the way we would would approach this is we try and find really creative touch points So read the way you framed it right was for adults Maybe the touch point or the intervention point is in the workplace So I think there are a million ways and I think Matt talked about one in the school There are many creative touch points that we can use with youth whether that's Domestically we think about you know summer programs or after-school programs. It could be a religious affiliation a school church group But I think that being creative in terms of how we're engaging different populations Knowing where they are and where they sort of flock to a lot of the work in savings is typically assumed to be Like a 401k work that you all might be familiar with I'll follow reads a train of thought tends to focus on Sort of net present value. So immediate needs versus future needs But actually thinking about some of the other Psychologists at play when thinking about youth I think are going to be a little bit more salient like the identity norm So we actually talk a lot about identity formation peer group Identities with youth which is a lot more salient actually than in the adult population So just kind of flipping the quants had a little bit thinking about The population where they congregate what the touch points are and then trying to leverage those sort of unique Opportunities with the youth market. I think is a little bit different than how we would approach it with adults and you can certainly create Either defaults or nudges frankly in any of those creative touch points. I think there's a lot of opportunities for both Depends what your desired outcome is I'll jump in on that too and to say, you know, I agree with everything Alexandra has just said in terms of Things that you're talking about what the outcome is that you're you know wanting to achieve and that you know the Diagnosing that you do based on where that youth might be and what in what the outcome you you want to see You're going to have you know some variation in the way that you approach it So you know there might not be replicability of you know all different types of interventions across all contexts And I think that that's important You know, I think that there are also some other interesting and exciting things that Opportunities to take advantage of from the youth context that could be considered one is I think the prevalence of Social cash transfers in a lot of countries. These are this is something that You know automatic usually monthly sometimes bi-monthly sometimes bi-weekly payments in a many countries They go to parents, but also there are child allowances and cash transfers Especially for children and youth and some of those are detailed in our paper where this is a regular payment of Of a cash transfer typically conditioned on some sort of behavior That could provide a really I think interesting opportunity and usually that behavior is not continued saving or or even the beginning of savings But I think that you could consider leveraging it for that purpose for financial inclusion and for asset building With the right kinds of little moderate Moderate tweaks. I think that that's really interesting. I also think there's a lot of interesting stuff going on with gaming and texting That you know we heard about the interesting texting I think that gaming is know when we're talking about very low-income people in children Maybe that's not always so relevant, but you know, I've been to many an internet cafe in a small Developing country and there's plenty of it happening. I think that that's maybe in another interesting place to to think about ways to do something That doesn't that's a nudge that doesn't feel like it in a way, so I think that that's something else to consider one of the projects that We worked on with adolescent girls was in Burundi working with care and care set up Village savings and loans groups specifically for adolescent girls so they would Put aside money each week and within the group they decided the amount that they would save and so once they collected the money then they would loan it out to the other members and so This was a good opportunity To nudge them to save The peer pressure within the group was also important in getting them to to to save You know I honestly as a bit stumped me because I got hung up on the the automatic, you know because What you mentioned about the 403 be automatic enrollment and And so I think you know in another context the institutional Arrangements are maybe not as favorable You know you've got a High rate of informal employment You know a lot of cash transactions And then it's even more irregular among youth and it could be seasonal and But on the other hand, you know, I thought about you know, are there ways to leverage the school settings as institutional structures And this is pure conjecture, you know, maybe when when Parents and their their kids are paying school fees or paying for school supplies. Maybe there's an opportunity To nudge them or default them into some some additional savings perhaps for education and it also thought of perhaps remittances as as a Transaction opportunity involving financial services And of course you need there and let's open it up for some questions now But what you what you need there is you need the financial provider to you know be open to Exploring these opportunities these leverage points connecting to the school environment if that's particularly promising I'm actually carrying around some cash from my daughter That I need to deposit into her account. She has a kind of Sun trust and you actually for this account Low-cost account. You have to show up and deposit it and that's just not how I bank anymore. So You know and the hours aren't you know really good and they close when I'm at home in the neighborhood and so anyway I gotta figure out how to do that before she gets home from camp Let's start here and then over here. Yeah, should we grab a a new mic these are these are connected actually Let's shout it out for now, and then we'll fix it and circle back And how they get involved in being part of the education You know if they are and and how you kind of do that and also to make sure that the students money for the individual, you know Children's money doesn't actually end up going to the family or to the parents some point down the road How do you engage with parents? Yeah What happened in Ghana well, I know that I can say that HFC bank is in their partnerships of schools They they also plan to engage PTAs and My my colleague David and song from the Center for Social Development might comment a little bit further on this and David do you want to say anything about Anything that about how HFC is looking at Engaging parents of the schools to the the PTAs Hang on there you go grab it Yeah, so my name is David answer from CST So what HFC is going to do is at the beginning of this semester the schools require teachers to come for PTA Meetings so they plan to get it parents at that time to engage them explain what we're doing to them and Some of these PTAs are held sometimes twice or three times a year. So they hope to use those opportunities to to engage the parents Sometimes you know for instance a we have a third cohort that we plan to engage, you know, then because they are leaving the school So the parents will come to the schools for the results So that's another opportunity to meet the parents and engage them, which is different from the PTA Meetings so that that's what they've planned for now. They might be planning other stuff that I don't know for now Yeah, thank you And I'll just add one comment on that there was another question about how do you make sure that the money doesn't go to the parents eventually You know, I think that it's difficult to Control that I mean there are ways such as You know, there are some commitment savings accounts where that committed savings once it's once that's developed And the goal is reached or that, you know, the the time where the access to that money is is available. It goes straight to a higher education Institution or maybe to you know into some sort of training or You know an investment But I think that you have to debate some of the pros and cons of limiting the access to the money in that way versus just, you know taking the risk that at a certain age the you know The chill that that youth or maybe when they become an adult or when they're still a youth that they might Choose or be coerced into giving some to giving some of that money So, you know, I think that there there are ways to address that But I don't know in every case that you'd want to so that just wanted to note In Mongolia it was interesting because the bank that we worked with Haas Bank They had developed a savings product that the girls who were 14 To 18 they could open the account on their own. So they didn't have a co-signer So they had complete control over their money once they opened the account So maybe that you look at product design when you're designing products for girls if if of course the banking Regulations allow that in Mongolia. They did allow that. So it was an interesting finding Here Ika funka consultant World Bank. I have a question regarding consumer protection Fostering savings and youth. It's a great idea But it can go terribly wrong when pyramid schemes and others Detect that are you piloting also in the financial education area? How to bring messages across what to look for to prevent Frodden and behavior and ripping off the youth right so the questions on consumer protections and avoiding Yeah, so ideas 42 and see gap actually just a About a month ago actually a little over a month ago held an event here in DC Behavioral economics research and consumer protection. So it was Spot on to your question. It was not tailored to the youth market But again, I think there are a lot of really relevant lessons. I would encourage you I mean if tonight or Alex you want to say anything I would encourage them to speak up There's a whole blog series on the see gap blog about Behavioral research and how that will help us actually improve our consumer protection Policies and one specific component in our work on consumer protection behaviorally informed consumer consumer protection is Dispute and recourse In addition to transparency, there's also financial education piece and then our fourth is over indebtedness So these are the four themes that we're looking at the consumer protection research through behavioral lens There's a lot of actually research being done and at the moment and we're trying to engage more academics in the research agenda There hasn't been a ton previously, but I think this is definitely where the industry is going in terms of interest So definitely link up with Alexia and Tanaya or myself and we can give you more specifics on it But it's it's a growing concern and one that we want to address sooner rather than later Great. Yeah, let's go right here and we'll come to you sir Hi, Katja Peterson again from PSI I was just thinking about the whole kind of read what you were talking about savings and walking around with money for your daughter I have three savings accounts. One is my retirement my 401 then I have a savings for my AC unit that's Getting close to about 24 years old and the inspector tells me it's gonna go out So I'm saving for that and then I have my savings, you know for my big Paris trip in a few weeks Now are you in different accounts? Obviously your retirement is in one, but then there's two separate other accounts to separate account You've mental accounting with you got it. You got it. Okay, and the reason I do that is because I'm The my retirement is more out of fear Why I put in there and my Paris one is more out of gluttony I want to drink and wine and shop And then for my HVAC is also, you know, definitely a lot of fear because then I won't have a renter So to go to the psychology of the whole like nudging I guess what I'm getting to is depending on what you're saving for is gonna be whether you need a carrot or a stick Right, and and that's why I'm getting it. Have you are you really looking at this in your markets asking these young people? You know, what are you really really saving for? You know, if it's really if it's too long-term out, I'm a perfect example of that retirement You know if it didn't come out of my paycheck every month I wouldn't put in for it my Paris trip every other day. I'm making some kind of deposits Yeah, I just love to get your thoughts more on how how you would address that Let's hear about that broadly and then maybe in the youth-saved context to how that's being handled But broadly so there's sort of two things that I would respond So first of all, you're kind of like a behavioral researchers dream because that's a great example of very targeted savings That's it's really good. So aspirational savings is actually a really strong Component of the behavioral research so it people are more likely to save for something tangible and fixed Then some vague pot of money that they might draw on at some point So you're actually a really good case study in the the former So there's two psychologists that are at play that I would I would just highlight There are many but there's just two I would highlight. So one is again that identity formation. So if You can create the motivation and the intention to save by giving the youth or the population Something specific for them to think about when they're doing so so I want to go on vacation So I'm gonna save for this Paris trip very concretely The other is the the issue of loss aversion or gain So there's a whole body of research within this like the behavioral psychology world That people actually respond a little bit more to losing something than gaining something So the fear that your HVAC is gonna break and you're gonna not have air conditioning that's probably a much more salient reason to save than Saving for something positive and dreamy now in the youth market. It actually might be different because what Ronnie showed I think it was Ronnie slide that one of the primary Reasons people were saving was for discretionary funds. Is that Ronnie's presentation? Yes, so sort of fun thing So with the youth market probably more research is needed because they might be motivated more by the gains than the losses But as an adult when you've got a whole family that you're worrying about and you you are more You're wearing more your mom hat or your household hat the loss aversion piece might be stronger So these are just some ways to think about the psychological components Is there you save Answer I think just want one comment is that It's something you're naming something I think that we we struggle with in Working with HFC You know, what what are the messages that go into the the low-touch just in time Financial education that happens 15 to 30 minutes before deposits start being collected and I think we struggle with it because The short and long-term goal Distinction is is a tricky one Because it may be more relevant for for youth to think about saving Perhaps just to sustain their education from junior high school into senior high school on that might be a Pretty good outcome. I think the danger is in Framing savings around You can go to college You can start a business if that's the exclusive frame in the exclusive message Because I don't know how helpful That is for for all youth Certainly in the in the US context that the saving for education for youth saving is very, you know dominant and prevalent Please Insight that I think is just interesting so a year and a half two years ago We had a convening of our partners and financial institutions that we work with on youth save down in Colombia And we did this really interesting group work where we broke up into groups and we tried to come up with skits and other types of Marketing materials and campaigns for what we think would be would resonate with youth and we had a panel of youth that would be There were part of this intervention. I believe part of it or related to in some way Who were kind of judging these different groups and the the one that the skit? I guess that Resonated most with these youth by far was this kind of very romantic depiction of Dream it and you can be it sort of you know like what you're going to achieve and the Awesome things you're going to do with your life and they just ate that up more so than I really need to buy this new Xbox or you know like and then that was I think it was part of it was presentation But I think also the message was really powerful and and their response to it which is really in enlightening so I think that there's a lot that we have to learn about You know what what resonates? I think that you're absolutely right that that you know that we still need to know a lot that there's a lot That we still don't know I guess about about youth But that I really that really stood out to me saving for air conditioners Second so one thing I would look at cut if I if you're interested in the that your question and then also what Jamie was talking about gamification piggy mojo or Hello wallet our two new phone apps that help people create these very salient savings goals and Motivations so to kind of fun gamification type apps that domestically are at least in play Okay, we have a problem. We're actually out of time We have more questions So my proposed solution is we keep the conversation going After closing remarks because we're gonna be having some drinks and there's time to stick around so Please save your questions and you guys will be around and we can keep the conversation going So let's do it that way and then you can help me thank the panelists for their contributions You guys can all exit stage right and I'm gonna stay up here and Introduce Alexi a lot tour to Who will be offering some closing remarks on the shifting perspectives prevalent in this work? Alexi as the deputy CEO of C gap who you've heard a little bit about because they're a partner in the use-save consortium But they're a global independent policy and research center that really is dedicated to advancing financial Access to finances for the world's poor and They've been doing a lot of expanding work We heard a little bit about on on their clients and product side and she also leads C gaps work and outreach in sub-sahara Africa So they've been a great partner a lot of great work going on there for years She ran the Paris office of C gap, but recently has Moved back to DC. We're pleased to have her back here and really a long career in in 15 years and access to finance issues Previously she worked for development alternatives ink in both Haiti and in Washington DC And she does have a master's in Development economics from the Fletcher School of Law and Diplomacy excellent institution. So Alexi once you come up here and offer some Closing remarks for us today Thank you Thanks a lot read so Ruth. Are you still here? No, I'd love to meet your son though. So the world belongs to me now What an ambitious statement a good dose of aspiration and quite a bit of audacity in it as well And I think you know at the highest level. We really are talking about about Ruth's son and the world belongs to me now And I think the question that we're facing is what world are we going to give to Ruth's son or to Sarah? to Sarah And I think the the real answer is it depends to be honest And I think if we're looking at countries that are experiencing a youth bulge It really depends it depends on how we manage some of the transitions that we've been speaking about And if we manage them well, we can see hopefully a demographic dividend We can see increased economic opportunities and growth following these Sort of bulk youth bulge in many countries, especially in Sub-Saharan Africa and in the Middle East as well But if we don't manage the transitions well, there could be disaster frustration social upheaval Unemployment is already highest among the youth today, but that even increasing. So that's what we're trying to do I think with the you save consortium and with the discussion we're having today around youth financial Services now I'd love to focus a bit more on sort of the client side of it But I can't the other panelists did it all day I'm actually going to focus a bit more on the financial service provider perspective and the policy making perspective for thinking about offering Financial services to youth but before I do that I can't help myself since we took a client-centered approach to this session today I want to hear a little bit from all of you in this room and about your experiences with financial services I'm going to ask you to raise your hands as I ask different questions and apologies to folks on the webinar that I can't see So who in this room at birth? Basically got a savings account Okay, so a small number of people who by the time they were teenagers had a savings account Okay, a lot more and Who when you were a teenager you had a savings account. Were you able to do your own transactions? Okay, great. So I think again. I don't know the nationalities of everybody here in this room I assume we have primal many Americans and probably a smattering of other nationalities and I don't know where you grew up But I think it's very telling to see what's happening in this room So very few people at birth, but if you to look at countries at the Netherlands It would be completely different it would be almost everybody in the room would have said yes and quite a high number as teenagers including People who actually had control over the accounts Which I think is very exciting and the answers would not be the same in most emerging markets that we would go to So now I really want to focus a bit on you know Given that in many parts of the world the answers would have been different What is the potential policy case for youth savings? And I mean the youth are obviously a really important demographic group for reasons that have been mentioned before And I'd like to to pause it that there are at least three Really great opportunities on the policymaking side. The first one has been mentioned a lot already by Jamie and others Which is the asset building theory? Michael Sheridan who's part of the youth safe consortium is Cogut Lee Lee is in the back Did a lot of work around asset building theory and the asset effect that is both a material Effect so if you build assets that is a good thing in terms of better access to education to health care to improved living living standards housing standards, pardon me, but also behavioral Effects, which which Alex and others touched upon the better cognitive skills the future orientation So policymaking case for asset building very important the second one that I would describe it is around good financial habits So very early on building good financial habits And we I think all of us even the ones that are no longer such kids in the room know that what we start to do Early in life we tend to have her rapid uptake We tend to remember it the practice that also Alex mentioned being very important the third aspect from a policymaking perspective that I think makes youth savings important is the fact that many countries actually have an Explicit objective to increase their growth savings rate and the US is one country where that's not doing so well on this front But it's important both from a household perspective So the household having more savings to able to deal with vulnerabilities to be able to manage shocks that life will bring But also at the macro national level having capital for investment is very important But there are challenges and these have come up actually through the questions and answers Period so first of all the issue of legal age to enter into a contract So in most countries you become a major at 16 or 18 or even 21 in some countries And you need to be of that legal age to open a formal relationship with a formal financial institution And I think here what's I think exciting is we're seeing some differentiation now between the opening of the contract the ownership of the contract of the contract of the bank account and the transacting and We're seeing different regulators around the world trying to build in flexibility to allow miners to enter into contract So even if for example, they have to have an adult with them to open the account They might be able to transact on their own especially when it comes to depositing Even though for withdrawals they might need to have the adult with them But maybe the adult will not be able to withdraw alone if the miner is not there So I think there is exciting things happening on that front and there was a question asked about consumer protection I think we have to remember however strongly we want to advocate for youth savings that there are real Consumer protection reasons for having legal age of contracts. I mean, I think we shouldn't forget that The second sort of question mark out there and this came up also around the policymaking side is the documentation needed to open Savings account. I mean the good news is that around the world when we speak about financial inclusion There are exciting things happening in terms of relaxing documentation requirements as Appropriate so for example the financial action task force a standard-setting body that deals with know your customer regulations For example is actually has explicitly said we need to have tiered know your customer regulations So if you're talking about very small account balances, we should be able to allow less stringent Less stringent regulations and so school IDs was mentioned as one example of relaxing the documentation requirements So these were sort of three positive things on the policymaking side to question mark concerns outstanding I'm going to very quickly now move to the financial service providers And had asked, you know more questions about the financial service provider perspective and here I think there's a lot of opportunities Out there for financial service providers to be interested in offering savings accounts to the young I think the most powerful one is this idea of building loyal lifetime loyal lifetime customer base if You acquire a person early in their lives into your financial institution if you serve them Well and meet their evolving needs over time Likelihood is that you'll keep them and there was a study done in six European countries Including France and Germany that actually so that 85% of people never changed their bank in their lifetime so good develop developed country experience there and I Think Lisa you mentioned cross-selling when you were talking and the importance of that So the idea is that if you acquire a client young with savings over the over the years You can cross sell different products to them and make them very attractive Even if they're not attractive on a product base as a client a total client value They could be quite attractive the second sort of I think very positive point from a financial service provider perspective and The idea that youth Have networks that are very important. So if you get the youth in they're often early adopters of new things Including technology Including perhaps formal financial services So if you get them in early you might be able to get their parents into your bank down the road They're friends into the bank down the road, which would also reduce your cost of acquiring new clients a Third positive point with regard to financial service providers and those of you who come from the microfinance side Will will know that we have seen some saturation in some markets like Bosnia I'm like Nicaragua like India around very specific client segments And around very specific products So increasingly we're seeing some providers saying I won't want to and I need to expand my market share And I can't do it by still targeting that one type of clientele I need to develop new client segments and so in those countries that are facing competitive pressures The youth client segment could be a quite exciting market to go after and finally and frankly not to be I think neglected Is this concept of brand and building an image for strong corporate social social responsibility that can be a way for Commercial institutions to down the line Look at a client segment seriously it starts it as commercial as social responsibility, but could evolve But and I only have two points on sort of the real Thorny issues that financial service providers face But they're really important ones and both of my points have the word profitability in them with a question mark So the short-term profitability For the financial service provider to offer savings account to youth is uncertain I think we just have to be very clear about that and it's one of the reasons I actually want to start with the public policy case Because I think it's also important to remember the case may be a public policy case And the reasons are obvious small balance accounts into themselves forget just youth You know are costly and often not profitable on a product standalone product basis Although again from a client total client value perspective may be profitable And so they're real Challenges there at least again showed the info the data from at least the four pilots that we're not really so far It's early early early days, but so far mostly looking at in-school youth So if then if you're talking about getting to out-of-school youth, which I think we would want to low-income youth That's gonna drive the cost up most likely. So that's a real challenge. And unfortunately my second point The long-term profitability is unclear as well And so, you know, we know that most many many boards across all kinds of institutions are conservative And they want to know upfront, you know, when am I gonna break even on this and when am I gonna start making profits on this? However, we also know that boards with vision I think think about things somewhat differently and in a lot of the conversations that we've had with the 15 or so Financial service providers that are mentioned in a paper. That's outside when we get to your drinks You'll see that often they have a strategic vision To go out to go for the youth market and to go to this market with savings products They have a strategic long-term vision. They frankly don't necessarily do the math Right away. They eventually will always do the math So eventually we've got to crack this profitability nut Technology could be a real piece of it in terms of sort of reducing transaction costs and reducing the costs of acquiring clients And Kate and staying in touch with them, but I do think Some of the discussion needs to be reframed from the immediate business case to really understand strategically Why would a smart Commercial financial institution care about this this client segment Now the cocktail will be yours soon my friends, but I do want to leave you with a couple of areas I'm a bit like Alex. I like next steps that I think requires More thought more energy more study And I think this is really important because I am seeing in certain circles to be very frank with you this almost Advocacy fervor for youth savings and although I have an inner advocate for youth savings I also am careful because I know from the microfinance world what backlash can mean if you overstate things without the evidence base So food for thought in terms of areas that require more more investigation and reflection the first piece Is really better understanding and getting more data on the social impact of having youth Access saving services intuitively it makes so much sense to me I spent a lot of my time in Europe growing up and it just makes so much sense But we need the data and we need the data from developing countries not just developed countries I think we also need to better understand at the national level How different parts of government can work together to really try and create smart incentives to get youth to save So it's not just the ministry of finance. It could be the ministry of youth the ministry of sports There are really many different parts of government often at the national level interested in youth And so how do they come together to create the right set of incentives? I think is really important Thirdly, I think we need more innovation more experimentation on the provider side I think we need to understand what is different about serving youth. Is it the product design? Is it the marketing channel? Is it the marketing itself? Is it financial capability? Probably a little bit of all the above but we need to better understand these different pieces and what's important What needs to be different and how they interplay with each other We got if we do eventually have to get the numbers in terms of the profit and business case We have to be able to figure that figure this out down the line and my final final word will be To really again if we think about the world where we're trying to go Complex lives that these youth face Often intertwining as it's an IA said all three transitions at once And so I think we need to really think of the set of interventions that respond to their needs Holistically and I think holistically both in terms of the financial services We're talking about savings here, which is a critical saving a product but probably they need a range of different financial services and They also need non financial services So understanding that full set of interventions that youth will need while each of us in the different roles that we place Also, I think saying focus in terms of the areas of expertise that we bring to the table to then meet Client needs is what I think is ahead of ahead of us So with those few words I have the honor of on behalf of New America Foundation to invite you to drinks and continued conversation right outside Thank you very much for your attention