Marketing Seminar (2020-07)

Topic:Using FinTech to Budget: Consumer Spending in the Age of Information Access

Speaker:Liang Huang, The University of Arizona

Time: Friday, 28 August, 9:00-10:30

Microsoft Teams:

https://teams.microsoft.com/l/meetup-join/19%3aade8e46052fa419798afcaf6aad0ad20%40thread.tacv2/1598001778649?context=%7b%22Tid%22%3a%2280b7b804-c47e-4119-8274-0f6835b8e89f%22%2c%22Oid%22%3a%22dae73385-f69d-4688-a153-ff18e3659b00%22%7d

Abstract:

Financial technology (FinTech) is advertised as a solution for consumer financial struggles (e.g., budgeting, debt reduction, savings). Yet, no academic research has demonstrated the effectiveness of using FinTech to manage one’s finances. Using data from a budget tracking application, a field study, and several lab experiments, we demonstrate that using FinTech can increase rather than curb consumer spending. We argue this happens because FinTech enhances consumers’certainty in the available money in a budget. We further show that this effect is dynamic, with FinTech affecting certainty at the end (but not the beginning) of the budget period. We demonstrate two interventions (rolling over available money in the budget to the next period and providing less precise budget information) that attenuate the increase in spending due to FinTech access. Importantly, consumers do not predict the effect of FinTech on their spending. We conclude with suggestions for the FinTech industry for better ways to convey budgeting information to their users and for better use of FinTech devices for consumers.

Introduction:

Liang Huang is a Ph.D. candidate in Marketing at the University of Arizona. Her research focuses on consumer financial decision making, mental accounting, and psychology of resource management. Using a combination of lab experiments, field studies and analysis of secondary data, Liang examines how financial innovations influence consumer decision making, specifically how FinTech applications affects consumer spending decisions under budget constraint and how novel payment methods (such as the online person-to-person payment methods) affects consumer choices and pricing decisions. Liang has received the runner-up award for the Best Student Poster at Society for Judgment and Decision Making Conference (2018) and Thinking Forward Initiative Long-Term Research Grant for her work on consumer budget management. Prior to going University of Arizona, she received bachelor’s degree in Business Administration from Tsinghua University, China.

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