The Behavioural Insights Team (‘BIT’), often referred to as the ‘Nudge Unit,’ is a pioneering institution that operates at the crossroads of behavioural science, public policy and social impact. Established in 2010, BIT is a UK-based organisation renowned for its innovative approach to addressing complex societal challenges through the application of behavioural insights.
What is BIT?
BIT is composed of a multidisciplinary team of experts, including behavioural scientists, economists, data analysts and policy professionals. This diverse blend of talent empowers the team to tackle a wide array of complex issues with a unique perspective, harnessing the power of behavioural science to inform decision-making.
What does BIT do?
At the heart of BIT's mission is the concept of "nudging" – the idea that subtle changes in the way choices are presented can significantly influence human behaviour. BIT conducts research and develops interventions based on behavioural insights to encourage positive changes in individual and collective decision-making. They work collaboratively with governments, organisations and businesses to drive meaningful change in areas such as health, education, and the financial sector.
Projects in the financial sector
Within the financial sector, BIT undertakes projects aimed at addressing critical issues related to consumer behaviour, financial literacy and decision-making. Their projects often revolve around:
Savings and investment: BIT collaborates with financial institutions to design strategies that encourage saving and responsible investment. By understanding the psychological factors at play, they develop interventions to promote sound financial decisions.
Debt management: BIT's research in this sector helps individuals better manage their debt, offering insights into effective communication strategies that prevent financial distress.
Retirement planning: In partnership with pension providers and regulatory bodies, BIT devises interventions to boost retirement savings and promote informed decision-making regarding pension contributions.
While BIT is renowned for its work in the financial sector, they don’t work in this domain alone. Their reach extends across a number sectors, including healthcare, education, energy and public policy. They collaborate with a diverse range of stakeholders, from government agencies to private businesses to tackle a wide variety of challenges.
Using research for business benefits
BIT's research has a tangible impact on businesses. Their insights help organisations and businesses optimise their strategies and develop their decision-making processes. By leveraging behavioural science, businesses can:
Enhance customer engagement: BIT's research informs the design of customer experiences that resonate with human behaviour, increasing engagement and satisfaction.
Improve product design: Insights from BIT enable businesses to craft products and services that align with consumers' preferences and decision-making patterns.
Boost employee wellbeing: Businesses can use behavioural insights to design workplace interventions that improve employee productivity and wellbeing.
Mitigate risk: In the financial sector, BIT research aids in developing risk mitigation strategies by understanding consumer behaviour and financial choices.
BIT's work transcends the boundaries of traditional research, offering a unique blend of science and practical application that lets organisations make positive changes in their operations and interactions with customers and their employees.
PayCaptain and BIT working together to break down barriers for better saving outcomes
In September 2022, PayCaptain engaged with BIT to understand the sentiments of existing and potential users of the PayCaptain app towards the app helping them achieve greater financial resilience.
The goal of the project was to develop an evidence-based platform to support employees in building greater financial resilience, making it as easy as possible for them to build savings and contribute meaningfully to their workplace pension.
Through this evidence-based research, BIT assisted PayCaptain with the design and testing of SmartPay, PayCaptain’s new functionality developed specifically to help employees build greater financial resilience.
BIT made recommendations during the project, based on research, testing and their knowledge of behavioural biases that impact people’s ability to save. Their recommendations had the goal of making good financial decision-making easy, prompting it at personally relevant, timely moments. These prompts are communicated without irritating users or taking away their freedom to choose a different course of action if they decide that it’s not right for them.
Key recommendations from BIT for PayCaptain’s SmartPay functionality were:
1. Break down savings goals – presenting savings goals in daily amounts makes saving seem more manageable
2. Allow users to start saving at a later time – individuals are more inclined to commit to starting to save or savings increases in advance
3. Reassure users that the information they provide is confidential, and that their savings are secure and accessible whenever they need them
4. Make the app more suitable for those earning a variable income by allowing users to save a percentage of their income (as opposed to lump sum) and reminding users that they can change their saving amount whenever they need to
How does SmartPay help?
SmartPay from PayCaptain is groundbreaking in that it focuses on deep personalisation for the user. This personalisation enables SmartPay to prompt users into healthy and sustainable financial behaviour, such as saving a manageable amount each month.
The integration to payroll information means that SmartPay can provide suggestions at highly meaningful points - increasing the likelihood that the suggestions will be turned into savings actions to help build financial resilience for the user.
Activation of SmartPay is dependent on whether the employer provides access, then this valuable benefit is optional for the employee. Once the employee has activated SmartPay, they will be asked a set of personalisation questions regarding their savings objectives and financial wellbeing, allowing SmartPay to make more personalised recommendations.
Next, the user will see the SmartPay rewards tracker – a set of five goals which will help users build resilience.
By using payroll data and the personalisation questions, SmartPay’s recommendations are adapted to the user’s circumstances, reducing the risk that users will be prompted into an unsustainable behaviour, like saving more than they can afford.
Evidence from BIT suggests that personalisation directly influences behaviour across the consumer lifecycle, indicating that suggestions that are more relevant to the employee are more likely to be accepted.
Prior to the research and testing carried out by BIT and PayCaptain for the SmartPay project, PayCaptain had already leveraged many evidence-based principles in the app for supporting employees to save, using learnings from other BIT financial resilience projects.
In summary, BIT has conducted research and recommended interventions based on behavioural insights to encourage positive changes in individual and collective decision-making. Throughout this important research project, carried out over a period of 12 months, BIT assisted PayCaptain in creating functionality to break down behavioural barriers to saving. In doing so, PayCaptain has developed and perfected SmartPay - functionality that will have a significantly positive impact on employees’ attitudes to saving.
Findings and lessons learned during the project will benefit both the wider payroll industry and employers in supporting the financial resilience of employees through the payroll process, something critically important at a time when one million households are expected to run out of savings by the end of 2023.
PayCaptain Payroll Solutions Limited, www.paycaptain.com is a multi-award-winning Payroll/FinTech company that delivers a fully automated cloud outsourced payroll service. The solution contains many unique and innovative features for employees, helping them to take control of their pay and increase their financial wellbeing.
PayCaptain is a payroll solution that helps employers pay their workforce, regardless of income and personal circumstances. The solution incorporates functionality, however, that's specifically designed to positively impact financial resilience for people struggling with money, or vulnerable and low-income employees.
PayCaptain is the world’s first payroll company to be B-Corporation certified. To read more about B-Corporations, visit www.bcorporation.net
PayCaptain has been recognised and rewarded with two B Corp ‘Best for the World’ awards for being within the top 5% of highest scorers within both the Workers and Governance impact areas in the B Corporation B Impact Assessment. The company has also been included in ‘The Escape 100’ in both 2022 and 2023. The Escape 100 is the list of the top 100 organisations to escape to, as awarded by EscapetheCity.Org. PayCaptain was awarded 7th place in 2023 from over 13,500 nominated businesses.
PayCaptain was awarded the Chartered Institute of Payroll Professionals’ Software Product of the Year Award in 2022.