Changing money mindsets: Applying behavioral science to Fintech with Kristen Berman

The Jump Off Point

Rarely, if ever, are we rational when it comes to money. Too often, financial solutions rely on users doing the right, rational thing versus optimizing for human behavior. Enter Kristen Berman, a Behavioral Scientist so well-versed in the irrational aspects that drive human behavior that she named her consultancy Irrational Labs. In this episode, we discuss how behavioral finance can be applied to personal finance, collaboration/family finance, and general financial philosophy to create more effective financial solutions that align with human behavior and decision-making - to make us do what we want to do but might not do so willingly.

Key Takeaways:

• [00:03 - 00:54] Introduction, meet Kristen Berman
• [00:54 - 03:08] The intersection of behavioral science and FinTech consumer engagement
• [03:08 - 05:05] The user experience, incentives, and how behavioral science can enable financial health and wellbeing
• [05:05 - 07:13] The spectrum of incentivizing behavior, helping people for the right reason vs the wrong reason(s)
• [07:13 - 10:24] The role of consumer inputs in determining incentives for their goals
• [10:26 - 12:17] A north star as your financial moral compass, orienting toward responsibility and the right reasons
• [12:17 - 16:02] A Noom-type approach to empower a financial user experience, the power of habits
• [16:04 - 18:15] A goal gradient, making goals achievable and encouraging success
• [18:14 - 20:27] How social networks and reinforcement impact people's financial habits
• [20:27 - 21:57] An increasing openness to financial transparency and building community
• [21:57 - 25:28] 50% of millennial couples don't share bank accounts, rethinking that context
• [22:42 - 23:49] Joint accounts and relationship quality, discussing values
• [25:28 - 28:17] The opportunity for a family financial account and app, the idea of millennials as the "sandwich" generation"
• [28:17 - 32:02] Timing and a first line of defense
• [32:02 - 34:18] How to change mindsets and habits, becoming financially aware
• [34:18 - 36:15] ESG and behavioral contagion, climate-friendly investment
• [36:15 - 38:32] Kristen's career and path to FinTech