The Role of Psychology in Fintech Apps

Do We Care About Our Future Selves?

We often take actions today that negatively impact who we will be down the road. We care in the abstract, after all, why wouldn’t we? However, studies have shown that it’s difficult for us to connect the dots between our present behaviors and future outcomes.

When designing products in the health, finance, and education space, many of the actions we’re encouraging users to take today will impact their future selves such as eating healthier, exercising more, spending smarter, or learning a new skill. Unfortunately, we tend to overlook the fact that we aren’t wired to be concerned for our future self.

Imagining Our Future Selves in Third Person

In fact, neurological studies have found that when thinking about our future self, our brain activity appears as though we are thinking about another person entirely.

Additional research indicates that we imagine current situations in the first person, but we imagine our future selves in the third person. Sure, I’d love to have more money today, but whether or not my future self receives that money is nearly as inconsequential as the retirement savings of a random stranger.

In fact, neurological studies have found that when thinking about our future self, our brain activity appears as though we are thinking about another person entirely.

We make no attempt to bridge the psychological gap between our users’ current and future selves, yet we wonder why they fail to complete the actions we ask of them.

Professor Hal Hershfield partnered with Daniel Goldstein of Microsoft Research, Jeremy Bailenson from Stanford’s Virtual Human Interaction Lab, and several other Stanford researchers to conduct an experiment. They hypothesized that interacting a vivid visualization of an individual’s future self would cause them to increase their retirement savings.

Showing Participants Their Future Self

In an attempt to close the gap, the researchers took photos of each participants and altered them to approximate what they would look like at age sixty-five.

The final product was an avatar complete with wrinkles, receding hair lines, and grey hairs. Participants were allowed to interact with their “future self” in virtual reality, and then asked to allocate some portion of a hypothetical $1000 reward to their retirement savings.

On average, participants who experienced a virtual version of their future selves were willing to put away roughly double for retirement compared to those who did not see the photo.

…participants who experienced a virtual version of their future selves were willing to put away roughly double for retirement

AARP Using the Research to Bridge the Gap

This approach has just begun to gain traction outside of academia. AARP (American Association of Retired Persons) is the nation’s largest nonprofit, nonpartisan organization dedicated to empowering Americans fifty and older to choose how they live as they age. One of their initiatives involves helping people save for retirement.

AARP released an app in which pre-retirees could use augmented reality to see what they would look like in thirty years. By bringing their future selves psychologically closer to their current selves, AARP hoped to improve retirement savings behavior at a crucial point in their users’ lives.

Application in Product Design

This is an app UI I quickly modified adding a step where a user is shown an augmented version of their face... 30+ years in the future, pulling in the concept from the AARP study to show how this would be applied in a product experience.

When designing interfaces we often focus on how easy the product is to use. Learning about what drives behaviors helps us think about the solution in a whole new way.

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