What I’ve learned working in a financial company as a UX Designer in Chile
Have you ever heard about “AFPs” in Chile?
Just so you know, AFP is the way that every Chilean citizen use to save monthly money when you are an employee. It is mandatory and it is equal to the 10% of your “before taxes” salary.
The problem? (yes, it has tons of internals and externals problems).
Nobody feels they belong to this private but government regulated program because is not easy to learn about how it works. You don’t even know you are actually saving money every month if you don’t ask. However, 10% is not enough to have a cool retirement.
Even harder to be solved, people believe these companies are stealing money from them to use them and they refuse to understand how the system actually works.
The truth is variable, depending on the point of view.
“I cannot use my own money until retirement, they are using it while then to invest and earn money for them”
“They are stealing from me and losing my money”
“They are helping me to earn money for my future”
“They are administrating my wealth, then I don’t spend it”
The real truth is: the system actually works, but it needs to be improved. Everything, tech and lifestyle change
The solution that purposed the government:
The Government of Chile purposed that every Chilean must save 5%. The good news is that this money will come from employers and it’s not going to be reduced from our salaries.
The bad news is always there too. Deciding the best way of administering this 5% (ugh), they came up with different ideas like dividing it in 3% and 2%, and the last would be a common fund for everyone. It looks like a nice and utopic ideal when everything works well in a country. Chile works pretty well in some cases, but let’s face it, no all of us are paying fair taxes and no all of us are working hard to get a good life. Probably there are more people upon to get retired and fewer people working. 90% of salaries are not even good enough for living.
However, it’s mostly a good thing that we are going to increase our retirement savings but it’s still not enough to get a good pension. We need to save even more money to get a decent salary after 65 years old.
There are other problems like the retirement age is usually 65 years old, and estimated time for pensions are around 20 and 25 years long. It means the government is giving up for dead citizens at the age of 85–90 years old. The problem is people are living longer now and running out of money when they probably need it the most. Public health is not the best and there are a lot of gaps in our system to safeguard our pensioned people.
Another big enough problem is education. People are not well educated in financials and if you don’t work in financials or if you don’t have any body close to you who can teach you, the topic is way too far from everyday life.
There are tons of APPs for personal financial management, investing, banking, but in Chile, there is no open banking. It means, you can only use PFM apps that scrap the system to get your date, but you can’t actually connect your account with “account aggregation” to manage it better.
Some banks are getting out of the traditional way of banking lately, but we are still far away from this complete transparent and managed accounts.
That could also help on managing savings. Users need to visualize their wealth to feel they need to improve it. As a mandatory thing, Chileans are not well informed on managing from the first time they get into an AFP. It happens automatically when you start working with an employer. There are not good systems for monitoring the growth of your money and not well advisory to manage it.
There are a lot of gaps in the system and they cause distrust in the community.
All those problems are good opportunities that at Principal we are trying to solve. As a UX Designer, it is very challenging. It’s about people’s culture, company’s culture, changing systems and methods of doing things that have been always there. It means creating trust again when there is a “NO MORE AFPs” movement in the country.
I strongly believe we can change it. Fix the gaps and teach how important is to save for the future. Future is tomorrow, a year later or 40 years later.
Saving for your short terms goals and for the retirement is equally important today to get your things done, get your dreams accomplished.
Saving is definitely better than drawn in the see of loans and debt.
I’d love to read your comments and opinions about your country, culture, and community.
Sorry for my English in advantage. Spanish speaker here.