With freezing temperatures, little sunlight and the arrival of December's credit cards bills, January can be a difficult - and depressing - month. But research findings show financial stress for many Canadians is a year-round problem.
Fuelled by nearly $4 million in grants, researchers at Canada's Financial Wellness Lab, based in Western's Faculty of Science, are exploring financial wellness using expertise in financial modelling, machine learning, data science, actuarial science, behavioural finance and systems thinking.
Matt Davison
"Financial wellness is a complex topic that has not been thoroughly studied through a data-driven, financial modelling lens," said Matt Davison, dean of the Faculty of Science and principal investigator at Canada's Financial Wellness Lab. "Our corporate partners are committed to making these insights and solutions broadly available for the benefit of all Canadians and the country as a whole."
Western personal finance experts Davison and Chuck Grace and their collaborators - including Western statistical and actuarial science professors Kristina Sendova, Shu Li and Cristián Bravo-Roman and Ivey Business School professor Tima Bansal - are tackling a nation-wide financial crisis by combining state-of-the-art actuarial and financial models and deep-reaching, secure datasets provided by corporate partners, including Environics Analytics, Coast Capital, National Payroll Institute and CI Financial.
Western researchers are also partnering with colleagues from Wilfrid Laurier, York, UBC, University of Winnipeg and the Indian School of Business.
The Ontario Research Fund (ORF) Research Excellence program awarded Canada's Financial Wellness Lab just shy of $2 million and a further $2 million will be donated by corporate partners. Sendova and Wilfrid Laurier mathematics professor Adam Metzler are co-principal investigators on the Davison-led grant, titled "Fintech Solutions for Financial Resilience in Ontario Homes, Workplaces and Schools."
'Change the trajectory of financial stress'
Findings from Canada's Financial Wellness Lab research suggest approximately 41 per cent of working Canadians are financially stressed. That number is simply too high for a healthy society, its experts say.
Chuck Grace
"Our goal is to change the trajectory of financial stress in Canada, permanently, and to do that we need thought leadership from across many disciplines," said Grace, Ivey Business School lecturer and program director at Canada's Financial Wellness Lab. "We're excited about the team we've assembled, our unprecedented data sources and the potential to have a significant impact on this issue."
As part of the four-year ORF-funded project, Canada's Financial Wellness Lab will investigate the financial decisions Canadians need to make while planning for a financially healthy retirement.
"It's a surprisingly complex puzzle that typically involves multiple income streams, escalating health-care costs, unpredictable longevity, questions of legacy and, sometimes, cognitive issues - to name just a few of the puzzle pieces," said Davison.
The researchers will also explore the financial decisions Canadian households make every day as they wrestle with rising costs, growing families, expensive housing, escalating debts and unforeseen emergencies.
"We will be working to identify effective strategies for financial literacy and how we can deliver the right information, to the right people, at the right time," said Grace.
Other targeted projects will examine student debt and the link between financial stress and workplace satisfaction.
Enhance financial resilience
The goal of Canada's Financial Wellness Lab is to develop quantitative finance and data analytics solutions that will enable Canadian households to enhance their financial resilience.
Financial wellness and resiliency are complex topics that have been studied across a number of disciplines.
Researchers at Canada's Financial Wellness Lab navigate these issues as they study data at the most granular level, sourced historically and, moving forward, in real time with support from their corporate partners.
With the assistance of machine learning, Canada's Financial Wellness Lab will examine these data sources and look for subtle relationships and trends that have not been previously studied.
