digital customer journey - Double exposure, business man and business time

Why digital finance needs a fitness band – Part 1

Author: Adrian Buxton

Fitness bands turn your health and fitness into a game you’re desperate to play. Could a financial fitness band form part of your multi-channel banking strategy?

Could a financial fitness band form part of your multi-channel banking strategy? Click To Tweet

Managing your money is one of those unfathomably complex, yet superficially simple problems. In theory it couldn’t be any simpler: your financial fitness is the sum of “money in vs. money out”. If “money in” is bigger than “money out” you’re winning. If it isn’t, you’re not. And that’s it.

But, of course, that’s not it at all.

It couldn’t be simpler, could it?

This kind of misleading simplicity also occurs in the health and fitness industry, where the reductive “calories in vs. calories out” captures almost everything you need to know and nothing at all, at the same time. These simple maxims for financial fitness and physical fitness are both provably accurate, but next to useless on their own.

Since both the digital finance and health and fitness industries have similar problems to deal with, it’s worth opening the gym door to see how the other team handle it.

Those of us in the Western world have every reason and every incentive to lose weight. Most of us understand that obesity is associated with serious health problems like diabetes and coronary heart disease.

For decades now, virtually every magazine cover, newspaper, TV ad, film, and computer game has shown us a vision of our more successful, more virile, slimmer selves. For the most part we think that we look better when we’re slimmer, that others think we look better when we’re slimmer, and that other people look better when they’re slimmer.

So why aren’t we slimmer? Why doesn’t everyone who’s heard of “calories in vs. calories out” have a BMI under 25?

I think the lesson that the multi-billion-dollar diet industry and all the fads, tips, trickery and technology needs to bring “calories in vs calories out” to life is that the calculation isn’t the important bit, the calculator is.

Information is not enough

For some lucky people, simply having access to the right information, whether it’s “calories in” or “money in”, is enough – but for most of us it isn’t. Most of us know very well what’s in our best interests, but we aren’t software and we don’t run on pure logic. We’re organic, social, and emotional beings, and how we feel matters a great deal.

We all know people who are (unfairly I think) labelled “bad with money”. People who just don’t seem able to control what they spend, or to see their individual purchases in the context of when they were paid or how long it is until the next pay day.

For many of us it’s a cycle. We get paid, our regular spending drips out through the month in a predictable way, and we’re surprised and thrown off balance by the regular occurrence of irregular spending on things like birthdays, broken boilers, and poorly pets.

Just as it’s hard to change our eating behaviour, it’s difficult to change our spending behaviour. They are grooved and habitual, comforting even.

There are solutions to help with both, but here I think finance lags far behind health and fitness.

Carrots not sticks

For a decade, from 2005 to 2015 (when the FCA stepped in), the payday loan industry boomed in the UK. It seemed like our most compelling answer to the problem of how to manage your money was the financial equivalent of a crash diet.

Payday loans and crash diets can get you where you need to be in a hurry, but they treat the symptoms and not the cause. Neither encourages you to modify your behaviour other than through aversion, and if they’re used too often they have a dangerous, compounding effect that can lead you into serious difficulty.

But while financial crash dieting escalated, its dietary equivalent did not. The health and fitness industry thinks about things a different way: just look down at your wrist. Now look at your colleagues’ wrists. I bet you’ll see fitness bands, and lots of them.

The health and fitness industry’s breakout product sells encouragement, optimism, and a different way to think about how we move and eat. They use sensors to measure what we do and innovative displays to tell us what it means, all with the aim of pulling us onto a new and better path.

A fitness band is no small commitment – it must be on your wrist most of the time and it regularly wants your attention. The miracle is that we’ve welcomed and integrated this intrusion of “calories in vs. calories out” into our lives with open arms. We do it because fitness bands have turned that dry calculation into a game where we’re the principal character and we’re almost always winning.

The challenge for multi-channel banking is to move away from simply giving people the right information and to start giving it to them in the right way. We need a digital finance platform that abstracts “money in vs. money out” with the same compelling finesse that a fitness band handles “calories in vs. calories out”.

To find out what I think that looks like you’ll have to read part two, coming soon.

digital customer journey - Double exposure, business man and business time
03 Aug 2017

Author: Adrian Buxton

Fitness bands turn your health and fitness into a game you’re desperate to play. Could a financial fitness band form part of your multi-channel banking strategy?

Could a financial fitness band form part of your multi-channel banking strategy? Click To Tweet

Managing your money is one of those unfathomably complex, yet superficially simple problems. In theory it couldn’t be any simpler: your financial fitness is the sum of “money in vs. money out”. If “money in” is bigger than “money out” you’re winning. If it isn’t, you’re not. And that’s it.

But, of course, that’s not it at all.

It couldn’t be simpler, could it?

This kind of misleading simplicity also occurs in the health and fitness industry, where the reductive “calories in vs. calories out” captures almost everything you need to know and nothing at all, at the same time. These simple maxims for financial fitness and physical fitness are both provably accurate, but next to useless on their own.

Since both the digital finance and health and fitness industries have similar problems to deal with, it’s worth opening the gym door to see how the other team handle it.

Those of us in the Western world have every reason and every incentive to lose weight. Most of us understand that obesity is associated with serious health problems like diabetes and coronary heart disease.

For decades now, virtually every magazine cover, newspaper, TV ad, film, and computer game has shown us a vision of our more successful, more virile, slimmer selves. For the most part we think that we look better when we’re slimmer, that others think we look better when we’re slimmer, and that other people look better when they’re slimmer.

So why aren’t we slimmer? Why doesn’t everyone who’s heard of “calories in vs. calories out” have a BMI under 25?

I think the lesson that the multi-billion-dollar diet industry and all the fads, tips, trickery and technology needs to bring “calories in vs calories out” to life is that the calculation isn’t the important bit, the calculator is.

Information is not enough

For some lucky people, simply having access to the right information, whether it’s “calories in” or “money in”, is enough – but for most of us it isn’t. Most of us know very well what’s in our best interests, but we aren’t software and we don’t run on pure logic. We’re organic, social, and emotional beings, and how we feel matters a great deal.

We all know people who are (unfairly I think) labelled “bad with money”. People who just don’t seem able to control what they spend, or to see their individual purchases in the context of when they were paid or how long it is until the next pay day.

For many of us it’s a cycle. We get paid, our regular spending drips out through the month in a predictable way, and we’re surprised and thrown off balance by the regular occurrence of irregular spending on things like birthdays, broken boilers, and poorly pets.

Just as it’s hard to change our eating behaviour, it’s difficult to change our spending behaviour. They are grooved and habitual, comforting even.

There are solutions to help with both, but here I think finance lags far behind health and fitness.

Carrots not sticks

For a decade, from 2005 to 2015 (when the FCA stepped in), the payday loan industry boomed in the UK. It seemed like our most compelling answer to the problem of how to manage your money was the financial equivalent of a crash diet.

Payday loans and crash diets can get you where you need to be in a hurry, but they treat the symptoms and not the cause. Neither encourages you to modify your behaviour other than through aversion, and if they’re used too often they have a dangerous, compounding effect that can lead you into serious difficulty.

But while financial crash dieting escalated, its dietary equivalent did not. The health and fitness industry thinks about things a different way: just look down at your wrist. Now look at your colleagues’ wrists. I bet you’ll see fitness bands, and lots of them.

The health and fitness industry’s breakout product sells encouragement, optimism, and a different way to think about how we move and eat. They use sensors to measure what we do and innovative displays to tell us what it means, all with the aim of pulling us onto a new and better path.

A fitness band is no small commitment – it must be on your wrist most of the time and it regularly wants your attention. The miracle is that we’ve welcomed and integrated this intrusion of “calories in vs. calories out” into our lives with open arms. We do it because fitness bands have turned that dry calculation into a game where we’re the principal character and we’re almost always winning.

The challenge for multi-channel banking is to move away from simply giving people the right information and to start giving it to them in the right way. We need a digital finance platform that abstracts “money in vs. money out” with the same compelling finesse that a fitness band handles “calories in vs. calories out”.

To find out what I think that looks like you’ll have to read part two, coming soon.