Increasing Teen Financial literacy about credit cards with PNC bank
Why is lack of financial literacy a problem?
Credit card debt is a serious social problem in the United states that snowballs into life crippling situations. This is especially true amongst teenagers and the statistic above proves it.
Most Teenagers are financially illiterate because of improper or no guidance from their caregivers/parents. On the other hand, parents don't know how to teach their kids this complex subject too.
How can we fix this?
Parents already have a trust relationship with their children and most parents practice financial literacy in their daily lives.
Leverage these points to create a guided tool for parents to help their kids practice financial literacy and let teenagers get hands-on-practice early on practice to understand complex terms.
Our Solution
A service that uses a mobile application to simulate the real credit card system by letting teenagers borrow money from parents and by paying them back by doing chores.
How it works
1. Request money- Teenager requests money on the app for something they want to buy.
2. Set task- They sit with their parents to discuss how they can pay back the money and set it as task on the app.
3. Complete task- When they complete the task, their parents approve it and they get virtual currency in the app.
4. Request credit- They do this over the month repeatedly and then receive a credit score with which they can unlock deals.
And this is how the screens align with the task flow
Project Details
The Client- PNC BANK
PNC Bank identified teenagers as a remunerative population. They approached CMU to help create a financial literacy service to tap them as the future potential customers.
Investigation
We started exploring the entire space of teenagers and financial literacy by
Conducting interviews with parents and teenagers,
Reading literature and papers about the subject of financial literacy amongst various age groups,
Analyzing games, mobile apps, videos that have solutions in the space of financial literacy for young adults
and understanding the various stakeholders and their value exchange through a stakeholder map
The Challenge
During the investigation, we across a paper by John Zimmerman's paper titled "Teens, Parents and Financial literacy". Shown below is one of the most startling finds that came from it. It was this fact that set the foundation for Wilbur.
Snowball effect of Credit Card debt
The problem at starts with "what is credit?"
i.e teenagers not understanding how the entire credit card system works.
They go to college and get offers from banks to sign up for a credit card
They spend without understanding which causes low credit score therefore resulting in high interest rate
The cycle goes on and on and causes a rapidly increasing credit card debt.
Mission statement
Teach about the credit card system to teenagers by using parents as means of communication.
Why parents as means of knowledge?
Through our interviews we started seeing patterns in the parent and their children's relations.
Parents practice financial transactions everyday and have basic literacy to teach their children and also relevant to their social economic background.
Parents already have a trust system built with their children
These 2 factors make them the perfect candidate for helping transfer relevant knowledge to their children. All the parents also really wants to spend quality time with their children.
Using the interviews and the research insights we built personas to keep us focused on the needs of our users while designing the service
More Research Insights
Sketching the screen flows
Screen intent informed by research
1. Parents don’t know how/ WHAT to teach teenagers about finances.
Wilbur uses a structured learn-by-doing model so that the teenager can buy and pay back while becoming more responsible with the spending with each cycle because of the use of credit score and using simple metaphors to teach the concepts.
2. Parents want to find quality reasons to talk to their teenagers.
Parents and teens are required to collaborate and come together to decide on things like how much amount can be borrowed and what tasks need to be done.
3. Parents don’t know how exactly to talk to their teenagers
Teenagers have rebellious tendencies and hence when the app detects that they are overspending, it send their parents tips on how to talk to their teenagers about this.
Teenagers don’t have constant income.
The app uses virtual currency and paying back in chores because teenagers don't have a constant flow of income to use this application with real money.
Teenagers want to constantly buy things.
Using this natural tendency to leverage healthy behavior. If teenagers want to unlock deals with their favorite products, they will have to spend wisely and increase their credit scores in order to reach them.
Understanding the entire app in detail
Service Strategy
The Wilbur Service Blueprint marks the steps that will be carried out by the parents and Teenagers as well as how the third party services integrate into the design and what are the backend and frontend services offered from PNC through Wilbur
How will we retain our stakeholders?
Teens
Buy more things
Teens are always interested in buying things and the application helps them buy them, only in a more educated manner.
Discounts on popular brands/services
Discounts from third party services based on performance credit score.
Owning a credit card
Almost all the teenagers we interviewed we super excited about owning their own credit card. Wilbur rewards students who sign up for the app and pass a certain credit score with their own credit card.
Better future credit score
Starting early means better credit history leading to better credit score and thus lower interest rates in the future.Gaining financial independence from an early age.
Better banking services
Better service from banks because of constant use and good history.
Parents
Quality conversations
Being able to spend time with their teens and having quality conversations is one of the biggest gains for parents who often mention how hard it is to spend time with their children.
Sense of Relief
A sense of relief that their children will be financially responsible and independent at an early age.
Better banking services
Better service from banks because of constant use and good history.
PNC Bank
Loyal customers
Base of loyal and financially educated customers, thus fewer outstanding debts.
Better business
Increase in credit card sales because a huge long term profit for banks. These will also be sales to educated customers who WILL pay their debts. Guaranteeing profit.
More loans
More educated loans and mortgages from teens in their future for buying houses, cars, businesses etc.
Conclusion
Learnings
A good service always creates value for all the stakeholders in the service.
Service design means being able to thing of not just the product but the on boarding and more importantly a successful transition at the end of the service.
Since this was a fast faced project, PNC wanted us to think of the entire service and not focus too much the details like UI design. If there was more time, we would have liked to,
Created a more refined version of the product ( with proper navigation and details in UI)
Tested the final prototype
Created more iterations
Conducted a diary study with parents and teenagers to see the effectiveness of the service in a small sample