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1. Delivery Models for Financial Capability Interventions. A Case Study Approach - $52,800
2006-07 $23,200
2007-08 $29,600
Financial capability is critical for all consumers, but market structures may be creating groups of particularly vulnerable consumers. At a June 2005 national symposium, several policy-makers and stakeholders signaled the need for Canada to develop an inclusive a comprehensive response to the national challenge of financial capability. Several outstanding questions remain. While there are different programs and supports in Canada, they have not been catalogued, detailed, and analyzed as models for public program development and investment nor have any evaluation criteria been debated or agreed upon. This means that we have little understanding about the types of interventions that are occurring and whether those interventions are effective.
This project will have several research aims. First, it will collect information on financial capability program delivery models and evaluation techniques and results, using each literature review and case study methods. It will attempt to identify the best practices in the field and the best methods for determining program effectiveness. It will then generalize these results in terms of potential delivery options and mechanisms for evaluating broader financial capability programming in Canada. This will provide policy makers, community based organizations, and financial services organizations with better information on how organizations deliver financial capability programming and the efficacy of these approaches. This will provide a basis for improving future interventions in this area.
SEDI will begin by systematically cataloging published research on financial capability. This work will provide a base for the other deliverables outlines in the proposal. As part of this literature review, special emphasis will be placed on work that describes program delivery and those that have comprehensive evaluation strategies and evaluated results.
Building on work already underway to systematically catalogue the supply of financial information, education and advice in Canada, SEDI will identify promising approaches in Canada for the delivery of financial information, education and advice to Canadian consumers. At least one international program will also be included in the study. SEDI will establish criteria for selecting sample programs for the case study research and will select a diverse sample of programs. The final sample of programs will be profiled in a case study format.
The key questions that this paper will assess are:
- What are the best practices for financial capability interventions in Canada (and possibly internationally)? How do they assist vulnerable consumers and are the methods that they use effective? What do the outcomes and evaluation results suggest about the positive impacts of financial capability interventions on financial consumer behavior? Do these interventions support existing government programs and priorities such as increasing access to basic banking or effective uptake of public programs and services? Are these interventions replicable or scaleable? Are there fundamental principles shared by effective programs that should be integrated into future policy-making?
SEDI expects that the final judgment sample of programs for study will include a wide range of programs including those based in an educational setting, community-based programs, financial institutions' programs and workplace-based programs. The final sample of programs will also emphasize, but not be limited to, programs that serve vulnerable consumers. Regional and demographic considerations will also be factored into the judgment sample. Qualitative and quantitative information will be collected on the final sample of programs. Sufficient information will be collected for both descriptive and analytical purposes. This will include information about any evaluation conducted to date, program operations details, any relevant financial information about program costs, key informant interviews with project staff and, where possible, participants.
The proposed study will also review the current state of evaluation research on financial capability interventions in Canada and internationally. In Canada, as in other countries, there are already in place several interventions aimed at increasing consumer financial capability. A key challenge to selecting best practices and determining directions for policy, is to be able to demonstrate the impact of these interventions on consumers' knowledge, confidence and behaviour. If the benchmark for demonstrating impact is set too high, then policy-makers will incorrectly conclude that investments in public programs have no measurable impact. If the benchmark for demonstrating impact is set too low, then policy-makers may continue to invest in interventions that are not effective. Most importantly it will develop recommended guidelines for the evaluation of future financial capability programs aimed at Canadian consumers, including those that might be supported through public funds, such as the outreach strategy in support of the Canada Learning Bond. Key questions for this section include:
- Can evaluations of financial capability interventions show impact on financial behaviors such as use of mainstream banking, savings, uptake of public financial programs and benefits? Can evaluations of financial capability interventions show impact on financial confidence such as consumer confidence in the use of electronic banking services or participating in disclosure and know-your-client processes in the sale of financial products and services? Can evaluations of financial capability interventions show impact on vulnerable consumers? What can funders and policy-makers reasonably expect from impact evaluations of financial capability interventions in terms of size of the impact, scope of the impact and duration of the impact?
These results will be circulated to select key informants with follow up interviews and questions to determine whether the information provided satisfies the requirements of the project.
2. In what ways do vulnerable populations wish to obtain financial capability products and services? - $96,600
Federal departments and agencies have expressed an interest in developing programs to meet the financial capability needs of vulnerable groups of consumers and even implemented one such program in conjunction with the new Canada Learning Bond. For such programs to be relevant and accessible to vulnerable consumers, they must not only be designed according to perceived needs but also to suit the preferences of the target groups for the delivery format of any new financial capability product and/or service. The present research will be an important contribution to the literature in Canada and internationally on consumer financial capability.
For the purpose of this study, SEDI has selected three sub-groups of vulnerable consumers: low-income dual parent families, low-income single parent families and recent newcomers to Canada living in low-income (including immigrants and refugees). These three groups have been identified by the Statistics Canada's Survey of Financial Security (SFS) as at risk of long-term financial insecurity.
This study will be executed in two parts. First SEDI will conduct a literature review of previous consumer research on financial knowledge, confidence, behavior and preferences in accessing financial information, training and advice. Sources and information from both the U.S. (U.S. Federal Treasury) and the U.K. (Financial Service Authority) will be used. In both countries, surveys of populations have been undertaken and research completed in the areas of financial capability and financial service provision. This information will be used to develop a structured focus group interview template. The focus groups will aim to capture information pertaining to:
- i. Patterns in participants' understanding of the concept of financial capability;
- ii. How vulnerable consumers describe financial capability knowledge, skills and attitudes - the terms that they use;
- iii. How vulnerable consumers distinguish between financially capable and less financially capable persons;
- iv. The identification of specific skills, knowledge and attitudes that vulnerable consumers believe are key to being financially capable; and
- v. The identification of vulnerable consumers existing knowledge of financial information, education and advice products and services as well as patterns in consumer preferences in the formats, facilitation or presentation of financial capability products and services.
The focus group format is particularly useful for assessing consumer response to products and services and for obtaining generalized qualitative information on strategies that relate to marketing of modified or new products and services. These sessions will allow researchers to gain evidence on opinions that will assist in formulating patterns and themes in the responses. Unlike traditional quantitative research, focus groups are centrally concerned with understanding attitudes and reactions rather than measuring them. This research will represent a direct, sensitive, and interactive method of assessing public opinion, through approaches, attitudes and priorities tangentially by allowing respondents to talk freely.
The interview template and discussion format will be crafted in conjunction with professional advice from the external consultant and with information from the literature review. Semi-structured interviews, 9 in total, will then be conducted in person with approximately 8-10 participants per focus group.
The focus groups are proposed to be held in two urban locations namely, Montreal and Toronto and in one rural community - i.e. Grey-Bruce Region, On. It is expected that the focus groups will be structured in the following ways and at the following locations: 1. Dual parent families, Male (Montreal and rural site); 2. Dual parent families, female (Montreal and rural site); 3. Single parent families, male and female (Montreal and rural site); 4. Newcomers, dual parent families, male Research Project Contributions:
(Toronto); 5. Newcomers, dual parent families, female (Toronto); and, 6. Newcomers, single parent families, male and female (Toronto).
Participant screening criteria will be developed with the expertise of the external consultant and in-conjunction with the information obtained from the literature review.
Participants' responses will be analyzed using qualitative methods of content analysis. It is expected that the results will yield a list of factors considered key to the opinions given by the participants pertaining to overall financial capability, existing financial capability products and services and desires relating to realistic financial capability products and services. These factors will be ranked by order of importance according to the frequency with which they appear in the interview data. It may also reveal inter-group differences in the factors themselves or in their order of importance
