Digital incentive for generation Z towards a better financial far future

Abstract

Many people have certain dreams for their far future besides living a comfortable life, such as owning a vacation house or taking a long trip. However, most people do not have financial plans. The lack of having such plans decreases the chance of these wishes and goals to be realised.Although the majority starts saving for their retirement above the age of 40, studies show that it is more beneficial to invest earlier in life. According to an analysis by the World Economic Forum (2018), delaying retirement savings by just five years, at age 27 instead of 22, results in a retirement account 18% smaller. Starting with savings later, even in higher amounts, rarely outperforms earlier savings with compounding interest. Encouraging young generations to long-term saving, even if for small amounts, provides opportunities to significantly improve retirement outcomes and anticipate the future of investment behaviour (World Economic Forum, 2017, 2018). The challenge, however, is to effectively engage young people, age 22 or younger, to participate in the first place. The selected target group are late adolescents between the ages of 16 to 18 with a Money Mindset of Controller or Future Planner based on their Financial Behaviour. This target group seems the best likely to adopt saving behaviour that enables young people to be better equipped for the far future before other pressing expenses hijack their willingness to retirement investment. There are currently 624.459 young people of age 16,17 and 18 in the Netherlands (CBS, 2018). According to the percentages above, 156.114 people should have the mindset of a Controller, and 103.035 of Future Planner. Together there will be 259.149 young people to motivate and engage with retirement investing. Based on the findings in this research, young people desire to either retire early at age 55, or fulfil their need for self-actualisation: living to one's full potential. What they need is having support in setting a realistic retirement age and income goals as well as professional, genuine advice from personal experiences. INFINITY is a far future exploration tool with the focus on increasing young people's awareness for the far future through motivation, engagement, reflection and perspective-taking. This is done with retirement experts, whose role are to support users in their needs. INFINITY is deliberately designed as light and playful tool; with a low threshold and game-like elements to trigger young people and make it easy for them to start exploring their far future (Eyal and Hoover, 2014; Fogg, 2009). The tool will gently guide users through several steps, called 'The Journey', based on The Path of Expression (Sanders & Stappers, 2012). The Path of Expression is a method that explains how the present (now) connects to the past and the future through memories and dreams. It describes the path as guiding awareness in "steps of thinking of the present first, then the past, then looking for underlying layers, in order to move towards the future" (Sanders & Stappers, 2012, pp. 55). The Journey triggers users throughout the product flow to perform small tasks and engage in conversation with their retirement expert. The design intends to have users reflect and explore other perspectives regarding retirement, instead of postponing it. The benefits of this showcase is its direct link to users. It includes the advantage for the company of shortcutting the current route, which is for clients to identify opportunities first and then pass it on to Yellowtail. Having a direct link enables the company to respond to user demand and present clients with innovative, user-oriented propositions quickly. This showcase also increase in the company’s knowledge about target groups with a thorough understanding of a new and young target group under the age of 25. The showcase includes users’ values, needs and wishes concerning the far future. It supports the company with developing differentiated, user-oriented value propositions. As for the clients, with this proposal they are able to increase the quality of the financial life of their consumers significantly and to be distinct and ahead of the competition. This user-driven showcase for a generation of savers represents an opportunity for any financial services company to renew and revitalise its brand. INFINITY is designed to motivate and engage young people for far future exploration and investment. It provides clients with the opportunity to connect with users and provide them with additional services and tools that further support their needs and wishes.