Finances

Emotion is everything

We often take a cursory glance at people’s emotions when we design experiences and products, focusing instead on needs and goals. But if we consider that people are driven by their subconscious and do things because they feel good, rather than because they meet a need, our focus should really be on making people feel good: not only now, but in the future as well.

 

Cersei said it best in the season 6 finale of Game of Thrones:

I do things because they feel good.

Feeling is everything. People make decisions and do things because of how it makes them feel. (We also allow other people to make decisions for us because of how it feels.)

We’re very good at convincing ourselves that we make decisions based on logic, when really, the rational mind is to the emotional mind like a rider on an elephant. Without motivation, your rational mind will keep on trying to control your emotional mind, and you’ll get nowhere. Chip and Dan Heath write in Switch – How to change things when change is hard:

…the brain has two independent systems at work at all times. First, there’s what we called the emotional side [the Elephant]. It’s the part of you that is instinctive, that feels pain and pleasure. Second, there’s the rational side [the Rider], also known as the reflective or conscious system. It’s the part of you that deliberates and analyses and looks into the future.

If you want to change things, you’ve got to appeal to both.

The Rider can get his way temporarily – he can tug on the reins hard enough to get the Elephant to submit. (Anytime you use willpower you’re doing exactly that.) But the Rider can’t win a tug-of-war with a huge animal for long. He simply gets exhausted.

Stefan Sagmeister takes this one step further. He theorises that our emotional side drives our decisions without us realising it:

…the rider thinks that he can tell the elephant what to do, but the elephant really has his own ideas. If I look at my own life, I’m born in 1962 in Austria. If I would have been born a hundred years earlier, the big decisions in my life would have been made for me – meaning I would have stayed in the town that I was born in; I would have very much likely entered the same profession that my dad did; and I would have very much likely married a woman that my mom had selected. I, of course, and all of us, are very much in charge of these big decisions in our lives. We live where we want to be – at least in the West. We become what we really are interested in. We choose our own profession, and we choose our own partners. And so it’s quite surprising that many of us let our unconscious influence those decisions in ways that we are not quite aware of.

We think the Rider is in control, but really, the Elephant picked a direction and the Rider has convinced himself that he’s steering the Elephant, when really he’s just an observer.

People want to feel good. They mostly don’t know what exactly will make them feel good, so they make weird decisions and do strange things in an attempt to get there. Every now and then, they’ll achieve things that they believed would make them feel good & then be surprised when it turns out that things turn out to be just things, not feelings. Feeling good is a state of being where one lets go of things, starts being kind to people and focuses on personal growth.

None of the above is anything new. Religions, philosophies and self-help schools of thought have been saying it forever.

Why, then, do we keep on designing experiences around outcomes, rather than feelings? We pay lip-service to emotion by plotting it on customer journey maps, but we almost make it a bonus factor to consider, rather than the heart of the matter. We also tend to think of emotions as the result of external events, when the really interesting and powerful emotions are the ones triggered internally, subconsciously.

We design the perfect bank account application experience, but we should be considering how a bank account is going to bring anyone closer to a place of feeling good. Do people even need bank accounts? If so, is the bank account they are so easily applying for, the right one? And will it change and grow, as the person changes and grows? Will this bank account contribute to this person feeling good?

Mihaly Csikszentmihalyi talks about most people don’t realise what makes them happiest.

On the job people feel skillful and challenged, and therefore feel more happy, strong, creative, and satisfied. In their free time people feel that there is generally not much to do and their skills are not being used, and therefore they tend to feel more sad, weak, dull, and dissatisfied. Yet they would like to work less and spend more time in leisure.

(Mihaly Csikszentmihalyi, 1990, Flow – The Psychology of Happiness, p.159)

Even though it’s been shown that we are happiest when we are in a state of flow, we still believe that we’ll be happiest when we are in a state of boredom. Perhaps we make the same mistake when we design processes for people. We assume that people want to be bored, when they really want to feel challenged at just the right level.

Flow diagram.png

To keep people bored, we hide the complexities of products and processes from them. Unfortunately, when we hide the rules of the game from the players, and start to give them incremental, step-by-step instructions without any idea of the outcome of the game, we create a space where a lot of people are going to feel anxious (because they want to understand how a solution works before they put effort into it) and a lot of people will feel bored (because they know what the outcome of a process is, but the system makes it impossible for them to navigate it efficiently).

The challenge is to focus on the ultimate needs of people.

It almost sounds like I’m contradicting myself here: on the one hand, I’m saying that everything is about feeling good, rather than about achieving an outcome. On the other hand, I’m saying that we need to focus on the needs of people (which sounds a lot like achieving an outcome). What I’m rather getting at, is this: people want to feel good, first and foremost. They believe that they know what’s going to make them feel good, and we help them to achieve those things.

But what we should be doing, is helping people to become aware of their real needs, instead of happily, and expertly, designing experiences that fulfil needs that have been fabricated for them by marketing machines (or by our clients, or by ourselves!). We need to focus on the next level of the hierarchy of needs for the people we are designing things for, which means that we have to know where they find themselves in the hierarchy right now.

We should be helping people to make better decisions, knowing that they do things that make them feel good, and ensuring that those decisions will make them feel good in future, too.

If we take the bank account application as an example: it’s easy to see why people want bank accounts, right? You need a means of receiving a wage and of not carrying cash around with you. The challenge is: having a means of receiving a wage and not carrying cash around with you, is not going to make you feel good if it comes with fees and rules and incomprehensible jargon.

Getting better at managing your money, on the other hand, will make you feel good, as long as the skills you have match the challenges you face. Becoming more aware of how you work with your money and learning, over time, to handle it with greater skill, will make you feel good. And you can begin with tiny steps in the right direction, by people who know more about finances that you do.

Feeling is everything, which means that we have to design with both empathy and perspective. This goes beyond empathic design. As empathetic designers, we should think about what we can do to encourage the best decisions in people, whether those decisions match our goals or not. This means that we have to spend some time understanding what’s best for them, which is usually not simple. It means that we think about how people feel and how we can help them to feel good. We have to look beyond providing services and products, and think about why those services and products are needed and whether they are sustainably good for the people we are designing them for.

Getting a third home loan

For all of the hype, we are not yet living in the Age of the Customer. My husband and I recently applied for our third home loan. We expected that it would be easy this time around. After all, we’ve been through this process twice, we know how it works and we’re great home loan customers. But the experience has left us feeling like very tiny cogs in a very big machine. Here’s what happened and some things that would have made our experience a bit better.

A bit of background

My husband and I have settled two bonds: the one we took out to buy our own home and another for an investment property in the countryside. Both bonds are with FNB. In both cases, FNB gave us the lowest interest rate of the big four banks in South Africa.

This year, we had a baby girl (our first little one) and realised that we needed more space for our family. We live in sunny Cape Town, very close to our respective workplaces. For a year or more, I looked at properties in Cape Town, hoping to find a family home with a garden close to the City Bowl that we could afford. We finally gave up – property prices in Cape Town are insane at the moment – and started looking further afield.

We found our dream house in Melkbosstrand. It’s a beautiful place with a garden and loads of space, 50m from a good primary school. The real estate agent let us understand that we could put down a very competitive offer if we could buy the house without the condition of the sale of another property, as it was an urgent sale.

Now, we knew that we would have to sell one of our properties to afford the house. We also knew that we could sell both our properties and then buy the house without any loan. However, we assumed that FNB would make a plan to accommodate us in the meantime. After all, we had managed to settle two bonds with them in 9 years’ time.

Hah.

What happened

Since we’ve been through the home loan application process twice in the past, both times getting the best deal from FNB, we decided to approach them first. We made an appointment with a private banker, Clinton, and met up with him. His personal assistant asked us to complete a balance sheet and share it with them before the meeting. It’s not a quick form to complete: we had to gather up-to-date information about all of our assets and liabilities and provide details about our joint monthly income and expenses. We were also asked to send all the documents required for a home loan application (tax certificates, bank statements, pay slips, proof of residential address and copies of our ID documents) through before the meeting. We did all of this.

I expected that the banker who met us on the day, would have taken a look at our financials and the property we want to buy, and would provide us with a few high-level options. I expected a rough plan A, plan B and even, possibly, a plan C.

I was sorely disappointed: Clinton seemed to have printed out our forms and stuck them in a neat glossy folder without looking at any of our information. His first priority was to sell us expensive private banking membership. When we asked what the benefits are, his response was: access to him and a team of financial experts, airport lounge access and loyalty rewards. None of the above is at all interesting to us. What a strange conversation it was! There we were, sitting around a glass table in a fancy meeting room on the 22nd floor of the FNB building in Cape Town, obligatory oil paintings against the walls, listening to Clinton talking about transactional account features, when all we really wanted was a home loan.

We walked away with a promise that he would get back to us with options within a few days.

Three days later, having heard nothing, we gave Clinton a call. He vaguely mentioned that FNB would probably be able to give us a loan, but that we would have to sell one of our properties. No other options were put on the table. We felt like we had been dismissed.

We were also worried. We needed a hefty deposit to afford the new house, but we didn’t have the luxury of time on our side: time to sell one of our properties. We approached a friend to loan us a deposit amount, which we would repay as soon as we sold one of our properties, and put in an offer to purchase. We let Clinton know, a little grumpily. He asked for a couple of days to reconsider our application and finally came back to us. FNB would give us a home loan, if: we became private banking clients, closed our other FNB bonds and submitted another few months’ worth of bank statements and payslips. We refused to become private banking clients, agreed that we would close our other bonds, and provided all the additional documentation. Two days later, Clinton emailed us, asking for written details regarding the loan our friend was willing to give us and how we planned to repay it.

Exasperated with Clinton’s delays and demands, we decided to give up on FNB and to go the bond originator route.

The real estate agent was only too happy to put us in touch with Joanita, a mortgage originator at BetterLife. Joanita sent us a form to complete, basically asking for the exact information we entered into FNB’s balance sheet, and also requested all the standard FICA* documentation, plus forms granting BetterLife consent to gather our data in order to apply on our behalf at the four big banks.

Nedbank got back to us quickly, offering the full amount needed, at a good interest rate. ABSA came back to us next, also offering the full amount, but at a slightly higher interest rate. Standard Bank took the longest to assess our application, but came back with the best offer of the three. We asked Joanita to apply at FNB on our behalf, believing that she would have more success than we had had via Clinton.

We expect a response from FNB, via Joanita, by tomorrow.

What should have happened

As the bank that granted us our first two bonds, FNB should have been the first to offer us a bond, for the full amount that we requested, at the best interest rate.

As the bank that granted us our first two bonds, FNB should not have asked us for all of our information and documentation again. They have most of it on record.

In a better world, we should be able to skip the bond originators. We would gather all the required documentation, perhaps fill out a single application form, and that information could then be shared with all the banks, as is, by ourselves, from the comfort of our home.

Each home loan offer should have been accompanied by some form of explanation as to how the bank arrived at the interest rate, term and amount. I understand that every bank has its own assessment criteria and risk appetite and that these determine what they offer to people. I understand that the outcome of our application is the answer at the end of some equation. But to us, those numbers seem intentional and judgemental. Tell us where the numbers come from and what we can do to improve them.

The banks should have treated us like people on the verge of making a very big decision. They should have empathised and made us feel that they are on our side.

Clinton, the private banker who met us in person, should have offered to work out different options for us, talking us through the advantages and disadvantages of each, and made a recommendation.

When Clinton recommended that we become private banking clients, he should have told us that we would get solid investment advice, and demonstrated how the expensive membership fees are worth our while in the long run. We would love to simplify our financial management and switch our accounts to the same bank that provides our home loan. But telling us about airport slow lounge access, eBucks and access to people in expensive suits in shiny glass-walled offices, is guaranteed to lose us.

To conclude

Our home loan application experience has left me feeling utterly disappointed in the big four South African banks.

We are supposedly living in the Age of the Customer, where social media allows us to express ourselves on public platforms and transparency is demandable. We are meant to be less beholden to big, cold corporate giants with their bureaucratic bullshit and incomprehensible processes and jargon. Customer Experience is supposed to be king. And yet, I found myself having to re-enter and re-submit the same information in numerous different formats, mostly in pen on paper (!) to lots of different people, and then having to wait for nerve-wracking days to receive responses in bits and pieces, written in uninviting legalese.

So yes: for all of the hype, we are not yet living in the Age of the Customer, where customers control the experience, the buying decision and the information. The silo walls are still high and intact. I’m hoping this is a case of the future not being evenly distributed, otherwise, the world seems to be seriously deceiving itself.

I believe that the first bank that treats people like human beings, that empathises with them, that helps them, that guides them, that supports them when things go wrong on their side, that helps them to plan for financial success, and that apologises when things go wrong on the bank’s side, will eat the big four banks for breakfast.

 

*FICA: Financial Intelligence Centre Act. In South Africa, whenever an individual applies for credit, one is required to provide a set of documents confirming one’s identity, residential address and income & expenses. These are colloquially known as one’s “FICA documents”.