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Worth the Time: Designing Financial Services to Reduce Time Poverty

Thursday, July 12, 2018

By Karen Andres
Vice President, Financial Health Network

Anyone who has heard the words “terminal,” “no cure,” or “palliative care” in a doctor’s office will remember everything about that moment. When I heard those words a decade ago about my 57-year-old mother, I immediately felt like I had been hit over the head by a brick. Courtesy of a grade IV glioblastoma, I had sudden, blinding, and heartbreaking insight into something that I knew, but had never really known before: Time is all we have. It’s the most valuable commodity in the world.

In the years that followed, as I sought to act upon the lessons I had learned from my mother’s death, I began to observe how I spent my own time more closely. When did I feel I had invested it well? How was I wasting my time, and how were others wasting it, with or without my permission? Was I allocating my time between activities in a way that I liked? Thanks to these observations, I came to understand that two things mattered to me when it came to my time.

Time is all we have. It’s the most valuable commodity in the world.

First, I want to minimize the amount of time I spend on Life Business, and maximize the amount of time I spend on Real Life. I define Life Business as activities like dental appointments, getting my car’s oil changed, paying my credit card bill, filing my taxes, and getting those pants hemmed. Life Business is what you have to do to facilitate Real Life, which is everything that matters: family, friends, fun, exercise, and, yes, even work.

The second thing I care about is control. I want to control when I spend time on Life Business, and when I spend time on Real Life. As I paid closer attention, I observed more instances in which I was most certainly not in control of my own time and was spending time

I had earmarked for Real Life on Life Business. I found that my daily calendar was often shaped by forces that had nothing to do with me: my insurance company’s fiscal year, the state of Illinois’ formerly arcane license plate renewal system, or my bank’s fraud detector maybe detecting fraud on the credit card I have had for 16 years (and have therefore embedded with every single account I have, everywhere, and having to do it all over again with a new credit card number). Tick, tock, tick, tock. There goes my time for Real Life, and I can’t control it.

Given that I spend my days working to improve the financial health of the 57 percent of Americans who are financially unhealthy, I began to explore how all of this plays out for people with low or moderate incomes. Economists like Clair Vickery have been studying the links between income poverty and time poverty since the late 1960s, showing that people around the world who suffer from income poverty also suffer from higher rates of time poverty. It’s a vicious cycle: Not having enough money forces you to spend more hours working for more money, but then you have fewer hours available to make the critical time investments — like education, training, relationship-building, or simply reading a book to a child — that can get you and your family out of poverty.

It’s a vicious cycle: Not having enough money forces you to spend more hours working for more money.

This isn’t just academic, though. The issue of time poverty has recently sneaked to the forefront of our national dialogue. Across the country in recent months, teachers, many of whose incomes qualify as “low” or “moderate,” depending on the state, have been going on strike to protest their low pay. A recent Vox piece by Alexia Fernandez Campbell highlighted that, for years, this low pay has pushed many teachers to take on two, three, or even four jobs to make ends meet. In fact, according to data from the U.S. Bureau of Labor Statistics, teachers are now five times more likely to work a side gig than the average full-time worker. Teachers, of course, are not alone; during the past decade, there has been a significant and well-documented increase in the number of people adding a “side hustle” or “gig work” to help pay the bills. And while many of us get to spend more time on Real Life because of services like Instacart or Lyft, all of this gigging and side-hustling from teachers and others comes at a cost: increased time poverty for those least likely to be able to afford it.

Since 2011, Financial Health Network has been leading an exercise called FinX, a simulation in which we put financial services leaders in the shoes of low-income and otherwise financially struggling people for a day, asking them to manage daily financial tasks using a complex lineup of products and providers. After a day filled with sequencing physical travel between banks and billers, waiting in line at payday lenders, and waiting on hold on the phone to address glitches with prepaid card activation, participants invariably learn that managing one’s financial life in this way takes an awful lot of time. As illustrated by the plight of America’s teachers, low-income workers are already pressed for time — and their financial life is only making it worse.

But it’s not just the amount of time they spend on their financial Life Business — it’s that they don’t get to control when they spend that time. They usually don’t have access to their earned wages until up to two weeks after they have earned them, but their expenses haven’t been waiting. They have been racking up rent or mortgage payments, energy bills, and data charges. And just like everyone else, their families need to eat, their babies need diapers, and they just might want to order a pizza or go out to eat in the time between paychecks. Their lack of control over the schedule of their financial life forces them to urgently spend time on Life Business when that check finally arrives, on a Friday afternoon at 5 p.m. — right when so many of us are heading home for some Real Life. While we’re tuning out on our commute home, they are in traffic or on the bus or train, rushing to the bank branch or the check casher to access their money immediately and then to pay their bills, many in person, just in time to avoid eviction or having the lights shut off. Then it’s off to the grocery store, or the expensive-but-faster convenience store, to restock on the essentials right away — kids’ tummies and babies’ bottoms wait for no one, after all. Because they manage their lives just-in-time, and because they don’t have extra reserves of cash, they can’t afford to wait — or pay in advance — for the convenience of Amazon or Walmart shipping. So they shop bricks-and-mortar, which takes yet more time.

At Financial Health Network, we have been advising financial services providers for 14 years on how to design their products and customer experiences for optimal financial outcomes for these struggling customers. And while we often think in generic terms about the value of “speed” or “convenience,” we haven’t used the frame of time poverty alleviation. If we did, I suspect that we would find ample opportunity to help reduce, rather than exacerbate, time poverty.

If we can help people save just 20 minutes a week, what might they do with it?

We might think first about how to simply reduce the amount of time low-income customers spend on managing their financial lives. Clearly, the digital revolution of financial services has been, and will continue to be, the driving factor in reducing the time people spend acquiring and using their financial products, in multiple ways. Reading the financial services trade press, it seems that we are so close to a streamlined, distributed financial services world, in which the combined horsepower of universal identification, artificial intelligence, a real-time payments system, and the distributed ledger collaborate to maximize our financial health. In this world, we could move nearly instantaneously from merely thinking about paying a bill, to receiving an alert that the bill has automatically been paid, from the most advantageous account, and not only on the best day, but at the optimal minute. (Better yet, we wouldn’t have to think about bills at all, as both our income and expenses would both accumulate and reconcile second-by-second, in real time, as we simultaneously earn and spend. But let’s not get ahead of ourselves.)

In the meantime, before we reach that glorious future, there are significant time savings to be had. Even in instances when a mobile, digital solution exists, there are still financial services providers who experience times of heavy live traffic — like some bank branches or bricks-and-mortar check cashers. Whether borrowing from popular restaurants’ practice of offering a call-ahead wait list, or designating a grocery-style “quick check-out” lane for high-volume, low-complexity tasks, there are gains to be made. Similarly, providers whose live touchpoint with customers is primarily over the phone can respect their customers’ time with airline-style call-back systems. Even saving customers a few minutes — especially if they have driven many miles to get there, as rural and ex-urban customers do, or if they have been on public transit for twenty minutes, and are facing the same on the return trip — can go a long way for a harried customer. If we can help people save just 20 minutes a week, what might they do with it? Read their child a book? Take a walk? Work an extra half hour to earn more income? Or just tune out for a bit, take a mental break, and be human?

Perhaps counterintuitively, digitally delivered financial services products also have room to speed things up. Sure, it may only take one push of a button, incredibly, to get a mortgage, or just three clicks to open up a next-generation bank account, but what about the entire customer experience? A financial product is not just the total sum of its digital features; it is also the end-to-end experience required to support it. If customers can acquire the product quickly, but have to wait on hold at the same central, understaffed call center whenever they need advice and support, then those upfront time gains get erased.

If we can mold financial services to match the up-and-down rhythm of a real person’s financial life, technology can save people real time.

There is also still much to be done, especially for lower-income customers, in the realm of automating financial Life Business. Here’s one idea: While automatic bill payment and automatic savings plans may seem like old news, many customers can’t take advantage of these time savings because they struggle with both income and expense volatility. They can’t pick one recurring day of the month to auto-pay a bill, or schedule an auto-save, as they might have a sufficient balance on February 15, but not March 15.

So on payday, whenever that comes, they manually pay those high-priority bills, in person or digitally. One time-saving solution would be to leverage predictive analytics, and maybe artificial intelligence, to sense when there has been a significant jump in the account balance, and to pay the highest-priority bills as designated by the customer automatically on that day, even if that day is different each month. In other words, if we can mold financial services to match the up-and-down rhythm of a real person’s financial life, technology can save people real time.

Our time is valuable because we are, regardless of how much money is in our paycheck.

Let’s not forget the importance of control. As we edge ever closer to a frictionless payments system, and as employers and innovators work on providing workers with nearly real-time access to their earned wages, we begin to see how giving workers faster access to their own money gives them control. Under this model, workers have greater ability to make payments and purchases when they want and need to, and not when dictated by the outdated parameters of the financial tools they use. But there’s more we can do. Many banks and credit unions we have consulted with over the past few years recognize that traditional “banker’s hours” are an obstacle for people who are managing multiple jobs, working second (or third) shifts and weekend hours. Strategically and selectively extending branch and call center hours can help people do business on their own terms, and on their own time. Employers and the government can also help here, perhaps by providing a “personal financial health day” off of work as an employment benefit, or even by making financial health a national priority by creating a National Financial Health Day holiday, giving Americans a day — and an important, symbolic signal — to manage important financial business. On one hand, there is meaningful cost associated with these ideas. But on the other hand, given how much financial risk both employers and the government have shifted to American workers in recent decades, providing workers with extra time to manage that increased risk seems like a reasonable proposal.

As I watch my own young children grow, seemingly at the speed of light, I am hit over the head daily by that same proverbial brick that first struck me 10 years ago, as I held Mom’s hand in a neuro-oncologist’s office. These experiences that tell us so much about the value of our own time — raising children, or navigating through unexpected losses — are universal experiences. They are human experiences. And because we are human, we have inherent dignity. Our time is valuable because we are, regardless of how much money is in our paycheck.

Originally published in Financial Health Network’s 2018 EMERGE magazine.

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