This is part of a series of posts about behavioral science and COVID-19. Click here to read about some of the most important behaviors during this pandemic—like seeking medical help, responding to humanitarian crises, and adapting to remote work in a global outbreak.

You’d be forgiven if you overlooked that April is Financial Literacy Month, or that April 7 was #FinHealthMattersDay. Financial health may feel quite different right now than it did a few weeks ago. Restrictions on movement due to COVID-19 that are important for public health have caused millions of workers to lose their jobs and the income needed to cover their basic needs. Numerous others, who must continue working in essential roles to keep communities running, face greater risks of contracting the virus which can cause financial challenges as well.  

Unfortunately, the people facing the steepest impacts from economic ramifications of the pandemic are those who are already vulnerable: Those with low to moderate incomes who are unable to simply work from home and are less likely to have savings or other assets to cover expenses while unemployed. They are also less likely to have health insurance, which can affect when and whether individuals seek medical care. Furthermore, emerging data suggests that African Americans may be  disproportionately vulnerable to COVID-19 infections and complications, likely worsening the already increasing racial wealth gap in the United States.  

Supporting financial health is a challenge that problem-solvers around the world have been facing for years. It’s an area where we’ve been applying behavioral science for over a decade. While behavioral science alone won’t solve the economic challenges so many people face in this current moment, it can and should be incorporated into widespread solutions to maximize impact. Ensuring that financial supports are behaviorally informed is more important now than ever. 

That’s why this Financial Literacy Month (which we prefer to reframe with a behavioral twist) we’ve compiled some behaviorally informed financial tools, resources, and designs we think will be most useful as people around the world weather these changes. Below you’ll find resources for supporting effective cash transfers, the adoption of useful digital financial tools, and strategies for (re)building resiliency.  

Send people cash with as few barriers as possible

At least 84 countries are now implementing income-boosting measures to assist those whose livelihoods have been hit by the coronavirus pandemic. In addition to being widely used to cushion the economic damage from sudden shocks like this pandemic, cash transfers have long been an effective tool for poverty reduction. 

Behavioral design can make cash transfers even more effective. Importantly, cash assistance should be as easy to access as possible to ensure that people can use it. While giving people cash feels like a simple concept, we’ve seen, in our work to maximize the impact of cash transfers in three countries, that small design tweaks can help people use their money in ways that are better aligned with their own objectives. In this op-ed in World Politics Review, our team highlights lessons from this work governments can use to help their citizens make the most of their cash.

Support the transition to digital finance

The combination of convenience, affordability, and functionality that digital financial services offer can support greater financial health. And during a time when people are encouraged to physically distance as much as possible, digital services can help people maintain easy, safe access to their money. 

However, many people around the world don’t use digital financial tools or features, and often it is for good reason: those tools are not appropriately designed for their needs or context. This means that financial providers will need to support customers who make the transition to unfamiliar online tools and tailor their products to their customer–and behavioral science can help them do that.

Helping people transition to digital banking

Behavioral Design for Digital Financial Services is a guide for providers to use behavioral science to increase engagement with digital tools. The playbook outlines design principles for common barriers to adoption that take into account how people process information, make decisions, and take action. Also see a handy interactive digital adoption checklist on The B-Hub along with proven examples of using behavioral science to improve financial health in the real world. 

Helping people open and use digital financial accounts for the first time 

People who are unbanked or underbanked have two hurdles to clear to use digital finance–first opening an account, and then using digital features. Recent advances in the innovative design and delivery of financial products, especially those aimed at the underbanked in the developing and emerging world, have made it possible for millions more people to have access to products and services that support financial health. While this appears to increase financial inclusion, we know that access alone doesn’t necessarily result in increased use of products that help people build savings.  In our global report on digital financial services,  we examined barriers to the uptake and use of these services across several developing countries, and then designed and tested strategies to help more people use them. 

Foster resilience

Saving money is hard, especially when so many families have historically faced volatility in their cash flows. In the U.S., around 40% of people would struggle to cover an unexpected $400 expense. Being unable to weather financial emergencies is a common story around the globe. For many households, deeper supports like unemployment insurance and cash assistance are required at this moment to help them make ends meet. But under different economic conditions, having even a small amount of liquid savings can help families avoid economic hardship to some extent and foster resilience against future interruptions in work or income. For employers and financial institutions looking to support their employees’ financial health and resilience now and in the future, creating savings tools is just one way of doing so, accompanied by essential structural changes that would support employees like higher wages and paid sick days. 

Strengthening employee financial health

Lack of a savings cushion and limited access to affordable credit pose formidable barriers to achieving financial stability. Employers can support employee financial health in higher touch ways (such as offering financial coaching as a benefit), but also in lighter touch ways (like promoting automated saving from a paycheck). We piloted these approaches with two employers and shared three lessons for better serving employees’ financial needs in our Money, Stress, and Work report. 

Strengthening bank customers’ financial health

Credit unions and other financial providers could offer similar savings tools for their members and customers. While traditional financial literacy programs often overload people with information that doesn’t spark action, a behaviorally informed program like the Financial Health Check connects with members over the phone to help them take action and automate steps around savings and debt reduction that build their financial resilience. Financial providers can also offer savings nudges–encouraging customers to set goals, make a concrete plan, and follow through with action–to help people build a savings cushion. 

Strengthening small business owners’ financial health

With approximately 400 million micro, small, and medium enterprises around the developing world, successful small businesses have the potential to improve the livelihoods of millions of families. We developed a scalable mobile-based training program that simplifies financial management lessons into easy-to-adopt rules of thumb and delivers them to small business owners.  The Financial Heuristics Training has been tested and proven effective at improving financial management practices in three regions across the developing world.  Many businesses are struggling right now, which makes strong financial management and long-term planning practices crucial once recovery efforts are underway. 

We’re developing new behavioral science solutions to support people most economically impacted by COVID-19. In the meantime, we hope these resources and tools help financial providers, employers, governments, and non-profit organizations offer additional support to their customers, employees, and residents. 

Read more about the behavioral side of COVID-19.