HSBC’s “nudge” app uses behavioural science to help you spend less
HSBC is taking a leaf out of a behavioural science textbook, in order to help its customers make better financial decisions.
The bank has begun trialling what it describes as the world's first banking app combining customer data and nudge theory. The latter is a behavioural science concept that uses positive and indirect suggestions to encourage people to make better decisions.
HSBC's "nudge app" crunches individual's current account data, and then sends regular, targeted "nudges" to make people more aware of what they're spending. It hopes that these small, regular financial decisions will lead to a change in long term spending habits.
A recent study by the London School of Economics and Politics, commissioned by HSBC, identified that leveraging technology, such as automatic messages, was key in encouraging people to meet their financial ambitions.
"Just as personal trainers can be effective in helping individuals stick to their exercise goals, financial institutions can play an important role in helping their customers follow through with their good financial intentions," Paul Dolan, professional of behavioural science at LSE, said.
Raman Bhatia, HSBC UK's head of digital, said: "We know that many of our customers have good intentions for their financial futures, but that willpower alone is not always enough to drive a long-term change in behaviour."
"By incorporating nudge theory into our digital customer communications, we can encourage customers to adjust their behaviour to achieve their financial goals."