As New York City’s government seeks to understand the needs of underserved residents, its Office of Financial Empowerment (OFE) engaged RTI to deliver the first study to examine the needs, barriers, and opportunities for mobile financial services. We helped create an interactive data visualization and a toolkit for other cities to use as a model to explore mobile financial services on a local level.
Understanding Whether Mobile Technology Helps Low-Income New Yorkers Use Safe, Affordable Financial Services and Products
According to a recent OFE survey, one in three New York City residents is dissatisfied with his or her personal finances, while one in four households in the city were underbanked—meaning they had a bank account but also used alternative financial services that can be costly and predatory, such as a check cashing service, money order, payday loan, pawnshop loan, or payroll card from an employer.
With mobile financial services and technology investments reaching $12 billion last year, there is significant momentum for the creation of inclusive, consumer-friendly products and services. As a result, government, financial institutions, and the technology sector are searching for ways to collaborate and connect New York City residents with safe financial products that meet their needs.
Partnering with the Cities for Financial Empowerment Fund and with the support of Capital One and MetLife Foundation, the OFE commissioned a study of the needs, barriers, and opportunities to increase financial inclusion through the use of mobile financial services.
Survey Data Collection and Qualitative Interviews Deliver Actionable Data
Drawing on our background in financial security for low-income families, the RTI team designed and implemented a survey of 905 New Yorkers to learn more about their access to smartphones and the ways in which phones are used to manage money. Our team also conducted 30 robust, qualitative interviews to provide additional insights.
Our team worked closely with the city government team, contributing ideas and guidance about app design, survey data collection, reporting, and dashboards in support of our comprehensive study.
Empowering Consumers to Manage Their Financial Lives through Mobile Banking
The study found that 96 percent of New York City residents own cell phones and 80 percent own smartphones, which is higher than national rates. More than half of the respondents reported using mobile banking in the last 12 months, and underbanked respondents (72 percent), immigrants (77 percent), and individuals aged 18–29 years old (81 percent) were particularly active users of mobile banking services.
When it comes to privacy and security concerns, users are more comfortable receiving text or email alerts, rather than connecting to sensitive financial information via smartphone. In light of this finding, financial product development could explore expanded use of coaching apps, perhaps in conjunction with financial empowerment counselors, to increase comfort with mobile financial management tools.
To more widely share these findings, OFE developed an infographic that condensed the survey results held a launch event at Capital One Labs, and shared study results with the Cities for Financial Empowerment Fund Coalition.
Our team also helped create an interactive, visual data tool for the heavily trafficked New York City web site, as well as a mobile services study toolkit that OFE made available to other cities to use as a model to explore mobile financial services on a local level.
By using cutting-edge research methods on a small scale to support the most vulnerable, we are beginning to understand how people could interface with mobile technology and use it to improve their financial security. In the future, RTI will look for opportunities to build on this study and further support financial security for low-income populations in cities, states, and nationwide.