If you’ve been thinking more and more about saving money during the
past year, you're not alone. While the pandemic has upended our
personal finance habits, small changes in our routine can make a
big difference. A new initiative in Latin America supported by
Mastercard, Mercado Libre, the IDB’s Retirement Savings Laboratory,
and Common Cents Lab, a financial behavior research lab at Duke
University, seeks to use behavioral science to help entrepreneurs
and SMEs in the region make better financial decisions.
According to the IDB’s COVID-19 Labor Market Observatory, during
the COVID-19 pandemic, more than 31 million people lost their jobs
in Latin America, and the United Nations anticipates the worst
recession for the region in a century. Small- to medium-sized
enterprises (SMEs) and entrepreneurs who are actively working, or
those who are deciding to enter the digital economy at this stage,
must have sufficient financial resilience to overcome this period
and be even better prepared to weather financial shocks. The
partners collaborating in this program agree that financial
resilience is the ability to prepare for, deal with, and recover
later from economic shocks.
With support from the Mastercard Center for Inclusive Growth for
the next two years, Common Cents Lab team will work with digital
platforms including Mercado Libre, the largest e-commerce site in
Latin America, to design strategies based on behavioral science,
which can be validated and adopted by multiple players in the
region. Thus, these strategies will contribute to the growth of
digital platforms offering greater financial resilience for the
most vulnerable entrepreneurs and workers.
The program will launch first in Mexico and will then be
implemented in other countries where the e-commerce platform
operates. "This partnership strengthens our commitment to the SMEs
in Mexico because it will allow us to better understand them and be
a real driver for the country's economic reconstruction," added
Davido Geisen, Managing Director of Mercado Libre México. "It
represents great pride and responsibility for us to be the first
technology company in the region to implement a study of this
magnitude to improve the impact on thousands of entrepreneurs
through behavioral science."
Behavioral Economics is the study of how people behave and make
decisions. Integrating technology with learnings from Behavioral
Economics in the financial services space, may help people make
financial decisions that are more beneficial to their life in the
long run.
“Common Cents Lab has proven the power of applied behavioral
science in the United States and a number of other countries around
the globe,” said Luz Gomez, director for Latin America and the
Caribbean at the Mastercard Center for Inclusive Growth. “Their
expertise and insights will be a powerful counter to the urgent and
rapidly growing financial needs of people in this region.”
To improve the financial resilience of thousands of SMEs in
Mexico and the Latin America region, the program will use the
expertise of its partners, to develop changes and notifications
within the Mercado Libre platform and study its impact on profits,
short- and long-term savings, or the use of credit products among
its sellers. “The experience we have accumulated at the IDB shows
us that we can improve the lives of citizens and their financial
habits by using technology and facilitating decision-making,” said
Oliver Azuara, lead at the IDB’s Retirement Savings Laboratory.
“We are excited to launch this new initiative with the
Mastercard Center for Inclusive Growth and our partners in the
region as a way to measurably help those affected by the pandemic
recover and better prepare for future financial emergencies,” said
Common Cents Lab co-founder Mariel Beasley. “By designing
behavioral-informed interventions that exist within these digital
platforms, we can produce significant improvements in financial
decision-making and resiliency that will serve as a model for best
practices in other countries.”
This initiative builds on Mastercard’s ongoing efforts to
address the economic challenges facing individuals in the region.
Last year, the company united technology leaders in Latin America,
including Mercado Libre, to launch the Tech for Good Partnership, a
first-of-its-kind private sector agreement to accelerate digital
and financial inclusion in the region. Together, its partners
pledge to use their resources, assets, and expertise to prioritize
digital and financial inclusion efforts in the wake of
COVID-19.
To learn more about the Common Cents Lab, please visit
https://advanced-hindsight.com/commoncents-lab/.
To learn more about the IDB Retirement Savings Laboratory, go to
the following link:
https://www.iadb.org/en/labor-and-pensions/home-retirement-savings-laboratory.
About Mastercard (NYSE: MA)Mastercard is a
global technology company in the payments industry. Our mission is
to connect and power an inclusive, digital economy that benefits
everyone, everywhere by making transactions safe, simple, smart and
accessible. Using secure data and networks, partnerships and
passion, our innovations and solutions help individuals, financial
institutions, governments and businesses realize their greatest
potential. Our decency quotient, or DQ, drives our culture and
everything we do inside and outside of our company. With
connections across more than 210 countries and territories, we are
building a sustainable world that unlocks priceless possibilities
for all.
About Mastercard Center for Inclusive Growth
The Mastercard Center for Inclusive Growth advances equitable and
sustainable economic growth and financial inclusion around the
world. The Center leverages the company’s core assets and
competencies, including data insights, expertise and technology,
while administering the philanthropic Mastercard Impact Fund, to
produce independent research, scale global programs and empower a
community of thinkers, leaders and doers on the front lines of
inclusive growth. For more information and to receive its latest
insights, follow the Center on Twitter, @CNTR4growth, LinkedIn and
subscribe to its newsletter.
About Mercado LibreFounded in 1999,
MercadoLibre is the largest online commerce ecosystem in Latin
America, serving as an integrated regional platform and as a
provider of the necessary digital and technology-based tools that
allow businesses and individuals to trade products and services in
the region. The Company enables commerce through its marketplace
platform which allows users to buy and sell in most of Latin
America.
About Common Cents LabCommon Cents Lab,
supported by MetLife Foundation and the BlackRock Emergency Savings
Initiative, is a financial behavior research lab at the Center for
Advanced Hindsight at Duke University that creates and tests
interventions to help low-to-moderate income households increase
their financial wellbeing. Common Cents leverages research gleaned
from behavioral science to create interventions that lead to
positive financial behaviors. The lab is led by Behavioral
Economics Professor Dan Ariely and is comprised of researchers and
experts in product design, economics, psychology, public policy,
advertising, business administration, and more.
To fulfill its mission, Common Cents partners with
organizations, including fintech companies, credit unions, banks
and nonprofits that believe their work could be improved through
insights gained from behavioral economics. To learn more about
Common Cents Lab visit www.commoncentslab.org.
About the IDBThe Inter-American
Development Bank is a leading source of long-term financing for
economic, social and institutional projects in Latin America and
the Caribbean. Besides loans, grants and guarantees, the IDB
conducts cutting-edge research to offer innovative and sustainable
solutions to our region’s most pressing challenges. Founded in 1959
to help accelerate progress in its developing member countries, the
IDB continues to work every day to improve lives.
Press Contact: Michael AzzanoCosmo PR for Common Cents
Lab415/596-1978michael@cosmo-pr.com
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