International remittances are an important element in the Dominican economy. In 2015, more than 4.9 billion dollars were sent to the Dominican Republic, representing 7% of GDP, and an 8.5% increase compared to the total of the previous year (2014). Giving the country the highest growth rate in terms of remittances received in all the region.
In addition, remittances represent, on average, 14% of the income of the households that receive them. However, only half the people who receive remittances have a bank account in a formal financial institution to deposit the money received and save.
Banco Unión is a savings and credit institution formed in 2008 which aims to improve the quality of life of Dominicans who emigrate and their families. Through Banco Unión, 200,000 monthly remittances are received in the Dominican Republic, 80% of which are sent to the homes of the recipients, and 20% are collected in the offices of Banco Unión. However, it is not necessary to have an account open with this institution to receive remittances.
Two services of Banco Unión were used:
- Cuenta con Ella: current account used to receive remittance deposits with low monthly interest, and no monthly fees or minimum balance.
- Cuenta Clavo: account designed to save low amounts in the short, medium and long term, with moderate interest, with no monthly fees or minimum balance. Allows connection with an account in Cuenta con Ella to make regular transfers.
Randomized control tests were conducted using text message (SMS) campaigns to promote the use of Cuenta con Ella and Cuenta Clavo.
Study # 1:
In the first study, adoption of Cuenta con Ella was promoted targeting the 80% of customers who receive remittances at home, but do not have a bank account in a formal financial institution.
Of the 73,209 customers chosen for this study, 6,062 were assigned to the control group; the remaining 66,747 customers received, once a month from July to November 2015, one of the 11 messages that were part of the campaign. The framing of the messages varied between 1) promoting reflection and interaction; and 2) presenting the same information directly.
In addition, the duration of the study varied for each customer, receiving messages for 4, 5, or 6 months to measure whether receiving reminders for a longer time changed the effectiveness.
Study # 2:
By July 2015, Banco Unión had recruited 2,000 new customers for Cuenta con Ella and Cuenta Clavo. Thus, a single message was created which was sent to half this group to encourage them to create a savings balance with a specific goal. To determine how they should target the message, Banco Unión conducted a survey to find out its customers’ savings needs. The result was that most of them wanted to save to buy a house or have money available in case of an emergency, among other things.
Finally, the message was sent to 1,040 people (1,027 were assigned to the control group and received no message). During July 2015 and February 2016, customers in the treatment group received a monthly message. Those who had answered the survey received a personalized message with the specific amount they should set as goal; while those who had not answered the survey were sent a first message inviting them to think about how much they would like to save to get something they wanted, and later the generic message was sent encouraging them to reach their savings goal (with no specific amount).
Dominican receivers of remittances through Banco Unión
Increase adoption of bank accounts and savings in the Dominican population receivers of remittances through Banco Unión
Results
Study #1: For the Cuenta con Ella study, 197 new accounts opened were detected (0.27% of acceptance of the campaign) which means that the SMS had no impact on the opening of accounts.
These results may be due to the fact that just before the start of this campaign, Banco Unión customers had already received a marketing campaign, so it may be that customers who did not open accounts did not want to, or because the messages were not capable of convincing customers of the value of the account in a sufficiently attractive way.
Study #2: Activity in the accounts was relatively low with 21% of customers making transactions after the SMS campaign; and over time, the activity decreased. According to the analysis, it seems that the SMS led customers to make fewer transactions over a 4-week period compared to the control group, a 33% fall. However, an analysis of the results during the entire period of the campaign shows that the customers who received the SMS were not less likely to make transactions.
Also, having taken the survey and then received the message adapted to the customer's specific savings goal, made them make more withdrawals from the account. After 8 months, customers who had taken the survey and received the SMS had $1.75 less in their account than the control group. "
Also, customers who took the survey and then received the message adapted to their specific savings goal, made them make more withdrawals from the account. After 8 months, customers who had taken the survey and received the SMS had $1.75 less in their account than the control group."