Final Research & Synthesis Reflection – Payday Loans

 

As Quarter 1 wraps up we are taking this time to look back on how we can ultimately improve conducting our research and synthesis. These are some of the primary skills I was most excited to learn more about from the program. Before I go into that I want to give a brief overview of our research: what and why we were researching as well as methodology used during the process.

For the first quarter me and my team, Team Sprocket, explored the space of payday loans. These loans are intended to be short-term loans, roughly a period of 2-4 weeks. Because of the short time frame of these loans, the interest rate is astronomically high, around 500-700% APR. The reason for this is due to the fact that they are only collecting interest for a short time frame, in contrast to a more traditional personal loan that lasts 2-5 years.

This is where the controversy beings to come in the picture. We found our primary use case of taking out a payday loan were larger unexpected expenses occurring when no financial safety net was in place. Payday loan businesses only require a proof of income and an open checking account with no regard to credit history at all. Because of this, activist argue that payday loan services target the most vulnerable borrowers, especially since they’re already in a place of need. We have found borrowers can get stuck in a cycle which turn that intended short term loan into a longer period. Because of the extremely high interest rates, borrowers end up paying much more than the original price of the loans.

During our ethnographic research, which is the study of people in their own environment, we primarily interviewed borrowers (9) but also had the opportunity to interview a couple (2) of people with the perspective from the lending side. The primary method we used during our research was the use of contextual inquiry, which is the idea of observing and asking questions in the most direct environment where the primary point of action being studied takes place. We asked to conduct our interviews in the home. The idea is to get a better understanding of how people approach their finances, which primarily occurs in the home. Not only did we want to understand, we wanted to step in the shoes as much as possible into the people we interviewed. This is partly to attempt to remove the bias I mentioned earlier and approach the opportunity from a different frame of mind other than our own.

Knowing that more research is coming next semester, it’s a good time to step back and considering room for improvement. The first opportunity that comes to mind is definitely giving enough time for transcription. Our research had rough momentum in the beginning, but could still have transcribed while we were finding other people. This would have prevented us from playing “catch up” once the research was finished. It would have also provided the opportunity for us to sit in the data more and iterate on our research protocol refining our approach.

Which brings be to my next big opportunity: sitting in the data. Next quarter I will definitely be spending more time in the data, specifically alone. I feel this would have helped me get closer to the data. Not that I wasn’t close to the data, but I think there’s an intangible feeling during synthesis of an aha moment or epiphany that I felt like was missing for me personally. This is where the magic happens for insights after recognizing patterns, which make it more natural to reach interesting provocations and ultimately design principles of quality.

Going hand in hand with sitting in the data is the idea of externalizing more. I’ve leaned on organizing my thoughts via my computer or through conversation. The problem with this is that it limits lateral thinking and thoughts become based on previous experiences, rather than producing new opportunities or directions within the creative process. This is something I’ve personally struggled with in the past, which produced a clear limitation in retrospect. Next quarter I will illustrate ideas, write down my thoughts quicker (they will disappear into the ether), and create my own activities to produce original thinking.

Admittedly, we began our research with a bit of bias of them being “predatory”. This was difficult to separate, but important during this phase of research. One of the big opportunities moving forward would be to be more aware of that bias and separating it from generative research. During synthesis but bring that bias in during the synthesis stage. It’s important to remind yourself of that biased frame of reference.

Overall, establishing ways for gaining as much empathy as humanly possible while finding and creating outlets of original creativity from the data is what I am looking to work on improving in the future. I am looking forward to applying lessons learned from this quarter towards future research endeavors.

See our presentation here.