In a recent post, I explored the hierarchy of the Jobs To Be Done framework (building on a post from Jim Kalbach) and how understanding the real 'jobs' customers are hiring products and services to do can unlock better solutions. But I was musing about the utility of going too far up the hierarchy for financial products and services that tend more towards the transactional, eg Chequing Accounts.
But I'm thinking that maybe there are some interesting insights that the Financial Wellness Lab at Western University (financialwellnesslab.ca) have published that are making me think that some bigger macro-trends that are happening in Canada now could actually directly inform the product and service design of financial products that are more transactional.
The goal of the Lab is to develop quantitative finance and data analytics solutions that will enable Canadian households to enhance their financial resilience. Combining state-of-the-art actuarial and financial models and comprehensive proprietary datasets provided by our corporate partners, the partnership will provide insights and solutions for Canadians to help facilitate data-driven financial decision-making. Our industrial partners are committed to making these insights and solutions broadly available at the workplace or in the home.
Their research has identified six interrelated themes critical to understanding and improving financial wellness:
- The Three Neighbours: Households are categorized into three groups—financially "comfortable," "coping," and "stressed." Notably, the financially comfortable constitute only about one-quarter to one-third of households, highlighting widespread financial fragility. (financialwellnesslab.ca)
- The Three Sisters: Savings, Spending, and Debt: These interconnected factors are pivotal in determining financial resilience. Effective management of spending and debt is essential to maintain positive savings and overall financial health.
- Income—The Elephant in the Room: While income influences financial wellness, it doesn't solely determine one's financial well-being. High- and low-income households can both experience financial stress, indicating that factors beyond income are at play.
- Literacy or Behaviour?: Financial behaviours have a more substantial impact on financial well-being than financial literacy alone. Some individuals with high confidence in their financial status may lack corresponding financial knowledge, underscoring the importance of promoting sound financial behaviours.
- The Role of Advice: Financial advisors play a crucial role in managing portfolios aligned with clients' needs and risk profiles. Their conservative and personalized advice helps mitigate undue risk and supports clients' financial goals.
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Personalization: Demographic and socio-economic factors influence financial wellness, but their impact is secondary to behaviours related to debt and spending. Tailored solutions that consider individual circumstances are essential for effectively addressing financial challenges.
At The Moment, we believe that creating meaningful change in financial wellness requires more than just research—it requires action. By applying human-centered design, systems thinking, and collaborative problem-solving, we help financial institutions and organizations translate insights into real-world impact. Whether it’s redesigning financial products, improving client-advisor experiences, or fostering financial confidence through innovative solutions, we partner with organizations to turn knowledge into meaningful change. Let’s build a future where financial well-being is accessible to all.
Daniel Rose
As a Partner at The Moment, Dan (he/him) sees the potential to do great work all around us through groups of people coming together to tackle tough challenges. He excels at guiding groups to achieve collective outcomes that surpass individual efforts.