In developing economies, only one in five adults saves money in a formal account. A new study finds that mobile banking — and insights from behavioral economics — can facilitate default savings programs, effectively reaching the world’s rural poor through the devices they are already using.
The study, co-authored by Professor Blumenstock, found that nudging employees to save with default savings plans was strikingly effective in Afghanistan, one of the world’s least financially developed countries. “Data science can often be fairly ‘hands-off,’" Blumenstock said. “But here we spent a lot of time with the people in the study, and — not just in the data, but through personal stories — saw how helping people to save could improve other aspects of their lives.”