Understanding the Human Factor in Finance

Process Overview

Our research began with a literature review of 24 academic articles and white papers, a competitive analysis of products aimed at helping people manage their finances, and exploration of intervention techniques in four analogous domains. Following our secondary research, we recruited 17 participants and conducted hour long interviews with each. Interviews included open-ended questions, directed storytelling, a card sorting activity, and a radar diagram activity followed by a short survey.

Secondary Research

Our team conducted a literature review and exploratory research of both direct competitors as well as
analogous domains in order to better understand the space of unhealthy decision making.

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Our secondary research was driven by three guiding questions:

  1. What influences decision making?
  2. How and why do people make poor decisions, and what kinds of poor decisions do they make?
  3. What motivates people to make better decisions?

Literature Review

Studying various domains through an extensive literature review helped us to gain an understanding of the human nature of the decision making process, and where it can go awry. From our research we aggregated 12 heuristics that play a role in influencing the errors people are prone to while making decisions:

Competitive Analysis

We studied the competition through the lens of managing both income and spending habits, and evaluated tools across domains of savings, investment, debt management, bill payment, and financial education. We found that small companies are taking the biggest risks with innovative financial technology and tools, and it is paying off. While the threat to large banks is small, they are driving higher expectations in the retail banking sector.

Key Takeaways:

  1. Existing tools do not treat finance as part of a holistic individual, but rather as a discrete fragment.
  2. A lot of information can be hard to process, so people often try to oversimplify their decisions.
  3. It is difficult to fully understand how actions in the present will affect the future.
  4. Existing tools often do not provide directly actionable information, or only provide a limited set of options.

Primary Research

Our team conducted interviews interspersed with structured activities to better understand where
people obtain financial information and how trust influences decision making.

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We used a flexible structure of both questions and activities, to help build rapport and keep participants engaged. This also allowed us to improvise and cater to the communication style of each participant. Participants were recruited from a range of locations, ages, and income brackets.

Card Sort

We also conducted an open card sort, where participants arranged a set of pre-made cards into groups of their choosing and labeled them. As they explained why they chose to group different items together, we found insight into the ways finance fit with other components of their lives.

Radar Activity

As a portion of our full-length interview, we asked participants to engage in our What’s On Your Radar? activity. As we sat with our participants, they filled out sticky notes indicating people or tools they turned to for either learning or help and placed them within the diagram, where a sticky note close to the center of the circle indicated a crucial resource, and a sticky note on the periphery indicated a less valuable source.

Guerilla Research

We set up a large poster with our radar diagram drawn on it on a busy shopping street in Pittsburgh, and asked passerby to fill out sticky notes indicating their sources of financial literacy and assistance. Many people filled out the diagram with another individual, often a shopping companion with whom they were already walking, which sparked additional conversation.

Affinity Diagram Analysis

We sorted and grouped over six hundred notes in an affinity diagram to find patterns throughout the interviews we conducted. Grouping these patterns led to over eighty separate insights into the financial mindsets and situations of our target population. Further abstracting these insights and focusing on the most powerful and impactful items led us to derive a series of key themes as one method of organizing our findings.

Key Synthesis Findings: Tensions

As themes emerged from our affinity diagram analysis, our team noticed that many insights within these themes were in direct conflict with one another. These conflicts led us to additionally organize our findings by way of a series of powerful tensions, both internally to a single individual, and externally among different groups within our target demographic population.

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External Tensions

External tensions result from opposing knowledge, values, and behaviors between separate subgroups within our participant pool.

Internal Tensions

Internal tensions describe conflict resulting from incongruent knowledge, values, and behaviors within a single individual. These tensions were observed across genders, geographic locations, generations, and income levels. Many of these tensions were not directly acknowledged by participants but came about through our team’s affinity diagram analysis of the data.

See our design

Based on these insights, we designed a solution to ease these tensions. Click to find out more.