(SEI) When we embark on a design-thinking journey, it’s common to start with an existing base of knowledge that predisposes our thinking before we even begin to consider new ideas. It’s an unavoidable “curse of knowledge” that commonly burdens industry insiders.
We actively subscribe to digital news sources, attend conferences, engage industry consultants and read research reports, all tailored to our respective industries. Our teams and peers share subject matter expertise aligned to our areas of interests. All of these sources inform our thinking. The result, however, is that gaining true empathy is often a challenge. You and your team have a curse of knowledge that can color how you observe behaviors, conduct interviews, synthesize data and brainstorm on potential solutions to the problem you are looking to solve.
Start from the beginning of your own knowledge journey
Every year at SEI, I coach a team of summer interns for an annual case study competition, and I sponsor six-month projects for recent college graduates. I love doing this because it forces me to view our industry through new eyes that are not burdened with the curse of knowledge.
Through the viewpoint of our interns and associates, I begin a brand new knowledge journey and view industry trends or challenges in an entirely different way. This fresh perspective helps me constantly challenge my own mental models of financial services, replacing them with what it means to each new generation, rather than the industry research reports written by experts that we obsessively read.
Challenging our mental models
Many of us have been in our respective industries for quite some time, both as business leaders and in many instances as consumers. Conversely, most rising seniors in college and recent graduates are just embarking on their business careers. As consumers, they are equally just beginning to accumulate earnings and spending power. They view the financial services industry and its opportunities with the unique and fresh perspective that comes with seeing and experiencing many things for the first time.
For example, how many 20-year-olds have been to a bank? When I recently asked this question, only a few raised their hands, and most noted that it was because they had to open an account or they received a check larger than the mobile deposit allowed. The majority used digital banks, neo-banks or challenger banks, and have never set foot into a bank branch. When I asked how they pay bills or give money to friends for drinks or food, they answered that everything is digital, from automatic payments, tap-to-pay and Venmo. The notion of being cashless was common.
Equally informative was this generation’s participation in and awareness of the “creator economy,” which is comprised of 46.7 million amateurs creating and monetizing content on YouTube, Instagram, Twitch and other platforms, who are generating material income while they are in college or even in their teens. This economy includes more than 50 million people globally with an expected total addressable market of $15 billion in 2022.1 The result is that many in this next generation already have earning and spending power.
Lastly, when I asked about investing, many are not active investors and for those that are, a common theme was because their parents helped get things started. In general, unless their major was in the financial space, their knowledge of investing was limited.
A new perspective can reveal new problems
What problems could financial services be facing in the coming years? When we look through the lens of our summer interns and recent college graduates, it becomes easier to see important and emerging trends. The next generation doesn’t go to banks. They don’t write checks. They don’t use cash. And they often have limited understanding of investing. At the same time, contrary to the industry experts and reports we read, the 2008 financial crisis has little influence on their financial decisions.
If you’re a traditional bank that still requires your customers to come into a branch and sign something to open an account, you’ve got a problem on your hands. In addition, if you are trying to catalyze this next generation into investing, you’d better begin with education. Lastly, if your client journeys — from opening an account to transacting — are not 100% completely mobile, you are behind the curve of meeting the expectations of this next generation. You’ve missed the value of seeing through your prospects’ eyes.
The benefits of gaining empathy
Understanding how people view, experience and feel about things is the essence of empathy. It forces us to step outside of our own knowledge and personal experiences in order to view things through the eye of our customer (or potential customer). We too often rely upon our own “expertise,” industry experts or expensive research reports to inform our perspectives and we don’t take the time or apply the right mindset to truly gain empathy.
In financial services, we are enamored with industry reports that speak about the characteristics of HENRYs (high earner, not rich yet), or we obsessively attend webinars and read multi-part articles that speak about the transfer of wealth to the next generation client and what they expect from their financial advisors. While informative, these sources do not provide empathy.
It’s critical to take the time to engage existing and prospective clients directly. Most important is the self-awareness of your curse of knowledge. This awareness enables you to approach the conversation with a fresh perspective and start from the beginning of your knowledge journey.
Getting started
Empathy begins when you’re willing to challenge your mental models of “what should be.” It’s forcing yourself to shed the curse of knowledge and ask questions that provide the insights you need to see through your clients eyes and address the problem you’re seeking to solve.
Challenge yourself to get fresh perspectives from those outside of your industry. Engage individuals who don’t have many experiences as business leaders or consumers. It’s from these conversations and observations that you will truly gain empathy.
