How might we increase millennials’ confidence when it comes to investing?
Concepting Project (8 weeks)
Market Research
Competitive Analysis
Interviews
Ideation
Prototyping
User Testing
The Challenge:
It’s no secret that the American millennial generation struggles with their finances. Like generations before them, they receive little to no formal financial education, a generational problem that has becoming increasingly prevalent with the rise of debt and spending. Millennials are defined as people born between 1981 and 1996.
Only 1 in 5 of millennials are very or extremely confident in their ability to make decisions regarding investing. Less than half of Millennials with taxable investment accounts are confident in their investing decisions. A majority of Millennials are only somewhat confident in their investing decisions.
55% of millennials stated education efforts focused on the most impactful areas, including money management, retirement and investments would be extremely or very valuable, which is higher than among other group.
American financial literacy is lacking and we’re overconfident.
1 in 3 young adults were found to be “financially precarious” due to their lack of financial literacy, money management skills, and income stability.
Between 2009 and 2015, Americans got 24% worse at answering 5 questions related to financial topics such as interest, inflation, and credit.
Less than 50% of Americans were able to pass a financial quiz, though 44% of participants claimed they were “extremely” or “very” financially literate. Only 6% scored a 90% or higher on the quiz.
Americans are in debt, but keep spending.
The U.S. household savings rate decreased in 2018, falling to 6%, while consumer spending continued to rise. Americans are spending more than ever on higher education and healthcare expenses. Millennials are the first generation that don’t expect to be as well of as their parents. 63% of millennials have at least $10,000 in student debt.
Project Goals
Improve millennials’ confidence when it comes to investing
Increase awareness of financial concepts
Make learning about financial concepts enjoyable
Millennials trust their friends, but feel like they don’t know much and are afraid of investing unless it’s for retirement.
Interviews
I interviewed six millennials to understand current investing habits and identify areas that cause stress, frustration, or uncertainty. The group was split 50/50 between male and female participants. The interviews were one-on-one and I asked a series of 12 standard questions related to confidence, investing behavior, and education.
Themes were identified by grouping participants responses using an affinity diagram.
Millennials learn about financial concepts and investing from different sources, but friends and family are considered trusted advisers
They generally don’t invest in the markets, unless it’s for retirement
The most prevalent barrier to entry was “not knowing enough”
Millennials look for low risk options and research before making a decision to invest
How do we help?
Ability: Mixed Bag for Millennials
Millennials won’t invest until they feel “financially stable”, meaning they have paid off their loans, have built a rainy day fund, and aren’t saving for something immediate. A successful solution should give users insight into the best financial decisions for their personal situation.
Confidence & Transparency are Key
Millennials build confidence and trust in relationships through transparency, which will be critical in a successful solution, especially if it relies on new relationships. Data should be used to communicate risk and transparency and a successful solution will rely on community to educate.
Motivation: Find an In
A third party must stimulate interest in investing, usually via discussion with peers or family, but also when starting their first job that offers a 401k. A successful solution will encourage or motivate investing behavior.
Low Maintenance & Flexible
Once a millennial begins investing, they are looking for options that are low maintenance, low cost, and liquid. A successful solution will allow flexible investment timelines and will likely need to find ways to monetize without transaction fees.
Education: Foundation to Understanding
Educational information must be available “just in time”. It must also be easy to consume and come from a trusted advisor. A successful solution will not require outside research to create understanding.
Competitive Analysis: Other Services Addressing this Issue
Robinhood for Investing
A mobile app that tries to make investing accessible to everyone. The main focus is buying and selling stock, but Robinhood as also recently introduced news shorts. The app does not offer much educational content and does not include social interaction.
Mint for Saving
A popular choice for people trying to manage a budget, Mint helps people manage their money and spending habits. The app contains a new-worth aggregator of the user’s cash, investments, and debt. It also reports on spending behavior and trends, but does not offer much education or social interaction.
Investopedia for Education
One of the original investment-centric websites, Investopedia wants to be the leading source on financial content on the web. The site contains loads of information (some of which is paid) including, Ask an Expert, Market News, and educational materials. The site does not actually allow users to invest and does not have a social component.
Revised Objective
How can we encourage millennials to discuss investing and other financial topics?
“We all know physical health numbers, like BMI, weight and clothing sizes, so we can assess where we fall on that spectrum. Because of a lack of agreed upon financial metrics, people feel fear or shame around what their finances look like.”
— Kristin Wong, writer for the New York Times
Relying on design principles, I brainstormed ideas ranging from regulation in education to digital solutions.
And I landed on an idea:
A social media and brokerage platform that links all financial accounts to provide insight into overall financial health.
The platform would contain KPIs for user peer groups (age, salary, industry) can be established from users’ data allowing people to benchmark themselves against peers.
A newsfeed could be added to to create transparency among friends by showing trades, similar to Venmo, to get conversations started.
Access to financial advisors allows users to interact with independent professionals on a as-need basis, rather than needing a “premium account”.
Gamified challenges encourage users to learn and stay actively engaged with the markets.
The Solution
Prototype
I determined key features based on competitive research and insights from interviews, which were then communicated via lo-fi screen mockups using sketching and Microsoft Powerpoint.
Feedback
I solicited feedback from 12 potential users, focusing on the design concept and features, with disregard to visual interface. The goal was to gauge user interest, as well as tested users’ comfort level sharing certain levels of personal financial information. Since there was no task-driven usability test, qualitative notes were taken and synthesized.
Iterate
A mid-fidelity prototype was created using Adobe XD, focusing on key features identified during user testing. Gamification or “challenges” feature was removed due to concerns related to gambling. While there was some positive feedback related to the on-demand advising services, users were more interested in the metrics and benchmarking. Additional educational laddering was also included, helping users learn “just in time”.
PS: This was the first prototype I ever built using real design software (Adobe XD) and it's hard to look at now.
Testing (Round 2):
Participants were asked to review the conceptual prototype and respond to a series of questions about the product:
Would having insight into your financial health compared to peers make you more confident? Do you find this helpful?
Would having a dedicated social network used for discussing financial concepts make you more confident in your investing behavior? Would it make you more aware or educated about financial concepts?
Would this app make learning about financial concepts more enjoyable?
Are there features or aspects of this app that make you uncomfortable? If so, why?
“I think it would be helpful to get a sense of what it is [my friends] are up to, because for me there’s mental safety in win-as-a-team and lose-as-a-team. I just don’t want to be the relatively dumb one.”
Next Steps
Test it.
Specifically, test exactly which metrics users would and would not be comfortable sharing. The key social interactions or behaviors available on the newsfeed should also be tested and refined; specifically narrowing in on “following” professionals. Due to privacy concerns, I should also explore additional methods of accumulating net-worth information that doesn’t require linking accounts.
Build it.
The app should include tips and recommendations for users that find themselves “behind” their peers. The app also lacks active seeking of information, such as the ability to search for topics and educational materials. A 1:1 on-demand advising feature should also be added once “verified” professionals is clearly defined.
Read about the entire design process and outcomes.
Click below to download the detailed project design document.