Case Study: Solving Millennial financial planning problems together with Rabobank.
oneUp teams up with the Dutch bank to improve financial prospects for whole generations to come. Written by Maria Khafizova and Maxim Troost.
Fretting the ‘f-word’
The ‘f-word’. Let’s face it, everybody knows it. It’s lurking in the back of our minds. We are all forced to blurt it out when we least expect it. But we try to ignore it for as long as possible, only to bring it up under pressure.
The ‘f-word’ we are referring to stands for ‘Financial’, followed by another equally disturbing noun — ‘Planning’. Financial Planning. The stuff Millennial nightmares are made of.
Awfully offline
Not only is the cultural notion of financial planning firmly linked in popular imagination with a range of other equally unsexy concepts: retirement, pension and the rainy days ahead, but the practical application of financial planning is typically time-consuming and costly to execute. Wealth management services tend to be delivered offline, involving sit-down meetings and reviews, and are affordable only to customers willing to pay over 1700 Euros a pop.
Generational challenges
Combine cost barriers of traditional financial services with the psychological aversion to long-term-planning that most people are guilty of, and you end up with financial uncertainty on a generational level.
Where there’s smoke… there are social media fires to go with it. This September hashtag #MillennialRetirementPlans was trending on Twitter, with responses ranging from hilarious to tragicomedic, underlining mounting financial anxieties in the air. Investopedia’s Affluent Millennial Investing Survey has revealed that nearly half of affluent millennials say they’ll be forced to work beyond retirement age. Financial planning done right could help avoid it.
The trend extends beyond Millennials. According to a 2017 paper from the Global Financial Literacy Excellence Center, 77% of the world’s adult population lack an understanding of basic financial concepts. Approximately half of American Baby Boomers, three-quarters of Gen Xers, and three in five Millennials say they’re behind on retirement planning. According to World Economic Forum (WEF), by 2050 the world will face a $400 trillion shortfall in retirement savings.
States stepping back
Regardless of your politics, it is fair to say that even in those European states where governments traditionally swayed in the ‘nanny-state’ direction, the current movement is away from the ‘cradle to grave’ welfare approach and towards letting individual financial choices reign (or roam?) free. Thankfully, the proliferation of digital solutions allows for more personal control and financial transparency at our fingertips.
From using automated savings accounts to paying for transport with your mobile phone, from instantly splitting bills to shopping online in your sleep, digital solutions already allow us greater control over our day-to-day spending than ever before. But what about financial transparency and flexibility that would support our future? Here is where our latest project in digital financial planning comes in.
Meet the client: Rabobank to the rescue
This year Rabobank, a Dutch multinational banking and financial services company teamed up with oneUp to tackle the issue of financial planning, and bring long-term benefits of mindful wealth management into people’s daily lives with one custom digital solution.
Meet team oneUp
oneUp is an innovation consultancy based in Amsterdam, Antwerp and Hamburg. We help big companies come up with new business models, design, validate, execute and scale new digital products and services. Our young and future-minded team was keen to help Rabobank solve the issue of financial planning not only for the current customers of the bank but for generations to come.
Maxim Troost, our team lead in charge of the project, has extensive experience in Validation, Design Thinking and Growth Architecture, bringing his knowledge of the full Innovation Life Cycle to the Rabobank team.
Banks with benefits
Why would a bank get into developing solutions for easily accessible wealth management? Surprised you even had to ask! Financial planning increases prosperity of clients, helping the bank in return. It is the endless cycle of financial literacy in action. Okay, maybe we just made this cycle up, but you get the gist: what is good for one person’s bank account is good for the bank too. Financial stability and a sense of psychological well being that come with it are just a cherry on top.
Both Rabobank and other financial institutions offer wealth planning services to their private banking clients. But traditional wealth planning is a popular service that comes at an unpopular price: the implementation is labor-intensive, has a high cost for the bank, and requires the client to be willing to book a meeting with someone called a ‘wealth advisor’. It is hard not to assume that one needs to have somehow accumulated the ‘wealth’ in the first place, to be even eligible for such a meeting.
With these constraints in mind, traditional wealth management as a service was not scalable, and therefore inaccessible for the majority of the common folk, and especially the people that may benefit from it the most in the long run.
The process
To create a proposition that is applicable at scale and accessible to all, Rabobank’s Wealth Management department turned to oneUp. With the goal of offering financial planning to a larger group of people, the Rabobank team joined oneUp for a Design Sprint, developing the first version of the concept. Basing their assumptions on trend research, the team was able to move forward onto specifying the area of focus and interviewing potential customers to validate the solution.
Why oneUp?
With all the financial expertise in-house at their disposal, Rabobank was looking for extra skills to help validate which specific part of financial planning to focus on first. As the corporate trope goes, big companies frequently start off by building something with multiple functionalities but without a clear use case or a target audience. Rabobank knew that if they were to take this traditional approach, they would not succeed. This is where oneUp comes in.
Validation station
Customer validation refers to the process of finding out whether your assumptions regarding customers are true or false, making sure your research is correct and that your newest business model is reflecting the customers needs. In short, validation helps you avoid building products that no one wants, saving you the money and allowing you to pivot by editing your business model early on.
The people have spoken: Customer Discovery
oneUp was tasked with a goal of assessing the financial system, looking for a specific customer-centric question, so we had to conduct target audience interviews first.
Our interviews were focused on different aspects of financial planning. The first common problem that came up was people’s inability to focus on long-term consequences of financial planning, let alone correlate it with their own actions in the present.
Secondly, early adopters of digital financial planning tend to use Excel to round up their financial strategy. They do, however, have multiple goals for their financial future (don’t we all!), but if they have only one savings account, Excel is of no use. For example, one of the interviewees would like to plan for retirement at 55, but also to help the kids through university, and on top of that, would like to pay out his mortgage in due time. That is a lot to handle already! In fact, plotting multiple goals on top of each other in the future, created more financial anxiety, instead of alleviating it through the Excel attempts.
Got 99 problems and most of them financial
With customer issues in mind, we adopted a ‘Super Calculator’ solution, focusing specifically on the application’s front end. In this case the financial planning tool’s User Experience — making it simple to use and easy to understand — was key to winning people’s hearts and providing a truly worthwhile experience.
In order to further validate the functionalities of our financial calculator, we found early adopters, creating financial archetypes — Structured Steven and Digital Debby. Yes, yes, we know but alliteration is essential when creating memorable Buyer Personas…
Where Steven is aware of financial planning and able to get started with it on his own, Debby knows about the issues at hand but isn’t able to solve them herself. During this validation stage, we used a prototype of the front-end of the calculator, and dove into more customer feedback and data.
Better financial decisions at scale
In order to help Stevens and Debbies out there, Rabobank decided to build the front-end of the prototype that oneUp came up with. The product is currently at the Minimal Viable Product (MVP) stage, and Rabobank is ready to roll-up their sleeves and make strategic choices in order to come up with a go-to-market strategy. The MVP option allows the bank to get a version of the calculator to market before investing in the full-scale roll-out, testing their business concept with real users. During their collaboration with oneUp, the Financial Planning team in charge of the tool achieved a full buy-in, with the majority of internal stakeholders watching the innovation process closely.
Future plans
The application of the solution goes far and beyond Rabobank’s clients. Using the calculator, there is a possibility to shift the generational tide of financial instability and help older Millennials and Baby Boomers alike achieve their financial goals in a timely and organised manner. Inspiring better financial decisions today is the key to prosperity on a state level at the very least. The tool will first be rolled out in the Netherlands around February 2020, with the possibility of transcending market borders in the future. And what can make a bank happier than prosperous clients on all fronts? This is a rhetorical question that we will leave up to you to answer.
