BlueSky Thinking Summary

One of the most important issues, at least numerically, is that 1.4 billion adults globally are estimated to not have bank accounts.

Sean Higgins of Kellogg discusses the implications for individuals and banks alike: on the latter's part, it is particularly relevant, since savings deposits are needed to fund the very lending activity in which these banks are involved.

In order to remedy this situation, Higgins and fellow researchers conducted an experiment in Mexico, introducing prize-linked savings accounts encourage saving through—.

This research covered 110 bank branches and proved that PLS accounts considerably increase new account openings and deposits, with special focus on previously unbanked people.

While traditional incentives for opening savings accounts work, under PLS accounts, it developed long-term habits in saving and increased the stock of savings within the branches.

On the other hand, there were regulatory challenges to scaling up PLS accounts, particularly in the U.S.

Even so, PLS accounts are beginning to show their muscle in boosting financial inclusion.

Think of a savings plan like playing the lottery —

ready to start winning?