Here's a survey to start mapping the pain points around engaging with financial contracts. Please feel free to submit a response or ask people in your community to. The more the merrier!
Finance contracts can be really difficult to understand. They don't need to be.
The Small Print app will help people translate the risks and obligations imposed by financial contracts into something that is clear, accessible and engaging. Financial education will be delivered at the key point in time that people really need it, when they are making a big financial decision; (see "Financial education is useless unless it's timely"). The app will specifically focus on unsecured loan agreements (like pay day loans, credit cards, car loans etc) which typically have high interest rates.
- App guides user to input key features contained in the contact. Empowers users to engage with the contract and gain some sense of mastery over it.
- App will ask questions that guide a user's interaction with the contract - these questions will help the user pull out all of the key information contained in the contract. This will also help steer the user away from clauses that won't necessarily impact the user's financial health (like mandated privacy statements).
- App contextualises the loan by asking what it's being used for and then explicitly stating how much money that item will actually cost once the loan has been paid off.
- App flags really important clauses that the user probably isn't aware of (eg: clauses that are really lender friendly / hidden fees)
- Where the contract allows for multiple financial outcomes, the app will clearly step through each option and help the user decide which option is best for them (eg: deciding between a shorter loan with higher interest, or a longer loan with lower interest).
- App breaks down financial obligations into something that is really meaningful to the user (eg: a weekly repayment is framed as a dollar amount as well as a % of rent or the grocery bill).
- App can tie into bank account / budgeting app to work out if the user is capable of repayments (tacking our optimistic bias that we will be able to meet high repayments in the future).
- The consequences of failing to meet those obligations are made really clear (eg: implications for credit score, ability to repossess possessions, emotional costs of being really stressed about money).
- App will provide key pointers about key financial concepts (eg: on the page that asks about interest rates, users will have the ability to dive into what interest rates are).
- App could point to other options (eg: asking if you could hold off purchasing the item / pointing to places with better terms).
How do we translate this information?
- The mechanics of most financial documents are pretty standard - use this to build up questions that you can guide users through.
- In Australia, banks are required to provided stock disclosure statements - these can largely be assumed in all contracts so can be accounted for easily.
- If documents are provided in digital format, then users could upload information and app could strip out the important parts
- Using volunteers to help translate more complex terms using camera or microphone function (kind of like a Be My Eyes). These 'translations' could then be saved against contracts from specific companies for future use. This function would also work well for people who don't speak the language that the contract is written in.