Boosting Financial Resilience in Latin America: Behavioral Science & Fintech Innovation

Digital platforms are increasingly being used across Latin America, offering income opportunities for millions. Gig work is emerging as an alternative to low-productivity, low-quality informal jobs. Online marketplaces are enabling entrepreneurs to reach more customers and expand their offerings more efficiently. Additionally, fintech credit products are providing essential working capital, aiding small businesses in their growth and recovery from economic setbacks.
 
While there is growing evidence that digital platforms play a significant role in promoting inclusive growth and resilience, many independent workers and entrepreneurs in the region still lack access to social protections like paid time off, sick leave, health insurance, and savings that could enhance their financial security.
 
To address this issue, the Mastercard Center for Inclusive Growth has partnered with research and programmatic collaborators to develop and scale behavioral science-based approaches that help people increase their earnings, access credit, and save for unexpected events. Behavioral science focuses on understanding the factors that influence behavior, with various techniques proven effective in promoting positive financial habits. For example, "nudges" in the form of reminders, communications, or changes to the user experience can guide individuals towards desired actions, while gamification uses elements like point scoring and competition to encourage engagement with products and services.
 
Recently, Mastercard partnered with digital platforms and financial service providers, including Mercado Libre and Gliber, to test behaviorally informed interventions in Latin America. These findings, along with emerging insights from across the Mastercard partner network, suggest that digital platforms have the potential to not only succeed in business but also significantly contribute to advancing financial health.
 
Key statistics from 2020 to 2023 include:

 
Key lessons learned include:

 
For instance, research indicates that digital credit can help small businesses maintain liquidity, bridge account balance gaps, and manage financial shocks. In a recent collaboration with Common Cents Lab and Mercado Libre, a study was conducted to address barriers, such as lack of trust, that might prevent entrepreneurs from taking steps to expand their access to credit, such as linking accounts to share financial information. The study's communications efforts resulted in a 73% increase in account linking, leading to at least 137 businesses receiving credit approval.
 
Research indicates that techniques like default options, auto-enrollment, and predefined values effectively change behaviors with positive outcomes. Common Cents Lab used these strategies with Gliber to assist Chile’s gig workers in saving money. A six-week test with 755 users revealed that creating default savings pockets doubled the number of users with active savings pockets from 14% to 28%.
 
Through careful research and a deep understanding of user behavior, we discovered that digital platforms can tailor and refine their features to maximize user benefits while simultaneously driving their own growth. Integrating behavioral design is a mutually beneficial approach.
 
Collaboration with Common Cents Lab has enhanced product teams’ abilities to incorporate behavioral insights into digital products, making a strong case for businesses to adopt these strategies. For instance, reminding e-commerce sellers to restock during busy periods can boost sales. Other studies have shown that flexible credit payment dates offered by fintech lenders can improve repayment rates and help small businesses manage income volatility.
 
In Bolivia, our partnership with Accion and BancoSol demonstrated how gamification can promote positive financial behaviors and achieve real business outcomes. A Georgetown University study found that BancoSol's gamification tool, developed by fintech Flourish FI, led to a 21% increase in mobile banking app logins, a 48% rise in online bill payments, and a 36% improvement in timely loan repayments.
 
Nubank, a leading fintech serving over 44% of Brazil's adults, attributes part of its success to integrating financial education and behaviorally informed design into the user experience. A new study with Mastercard revealed that these approaches have helped Nubank customers advance from financial access to financial health. For example, 80% of customers used a prepaid card as their first financial product, 67% accessed loan products, and 36% made investments within an average of 1.5 years.
 
Companies possess extensive expertise and networks that can support financial security and health. Behavioral science isn't just for researchers; the private sector can also develop and scale behaviorally informed approaches. Companies use behavioral science daily to understand and influence consumer actions, personalize products and marketing, guide decisions with nudges, and create loyalty programs and incentives. These strategies can improve customer experiences and help people earn more, save, use credit responsibly, and make decisions that enhance their financial well-being.
 
At the Mastercard Center for Inclusive Growth, we combine philanthropic support for research with connections to Mastercard business partners to design and test sustainable, scalable, evidence-based interventions for financial security. By fostering diverse cross-sector partnerships, we inspire others to replicate and innovate these social impact models.
 
"It was an opportunity that was not being explored ... to help those users by making them conscious about their financial health and question ourselves: Is the way we are creating our products going to really help that person be able to create a savings pocket, prepare for a financial shock or a medical emergency?" said a product owner of a mobile banking app.
 
Looking ahead, partnerships that bring researchers and product designers together to test and iterate behavioral interventions can build an evidence base to inform investments that enhance financial well-being. Targeted interventions conducted with Common Cents Lab have reached 180,000 users and directly influenced 1,000 of them, improving their financial resilience. This is just the beginning.
 
Common Cents Lab is also developing an interactive tool to help digital platforms and fintechs diagnose their behavioral challenges and replicate successful interventions to strengthen their product offerings. With Flourish FI, we support the development of financial management tools that will guide small businesses in Brazil through a gamified journey to adopt healthier financial behaviors, unlocking rewards like access to responsible credit.
 
We will continue to share lessons from these approaches and bring together expertise and networks across the private and public sectors, NGOs, and research organizations to meet the evolving needs of workers and small businesses in an inclusive digital economy.