I recently served on a panel with USAA’s Vikram Parekh at the Visa Financial Literacy Summit in Chicago. In my research for the panel, I discovered that Vikram has a really cool job at USAA, which is not your typical financial institution. Their customer base is drawn from military and their families and to say they are hyperfocused on their customers’ financial wellbeing is probably an understatement. You will hear how Vikram uses principles of behavioral finance to get USAA’s customers to save and invest more. You will enjoy hearing what he has learned from his “experiments,” some of which you can apply to your own financial life too!

Details:

• 0:00~1:31 – Introduction
• 1:31~5:06 – Vikram’s job and what USAA does
• 5:06~6:07 – The three ‘buckets”
• 6:07~7:06 – USAA’s customer acquisition strategy
• 7:06~8:37 – USAA’s ownership structure
• 8:37~10:05 – Customer loyalty
• 10:05~11:11 – Preventing customers from overdrawing their account
• 11:11~12:39 – Limited membership eligibility
• 12:39~15:15 – His early money lessons
• 15:15~18:45 – Vikram’s life before USAA
• 18:45~20:56 – Experiments to help customers save more
• 20:56~23:02 – ‘Emotionally-consuming’ problems
• 23:02~25:09 – Motivating people to save
• 25:09~25:28 – A word from our sponsor, Next Gen Personal Finance
• 25:28~31:08 – The three savings myths and the saving button
• 31:08~33:26 – How you can create savings habits
• 33:26~38:03 – Automating your savings plan
• 38:03~44:36 – Best time to motivate people to save
• 44:36~46:14 – Motivating customers to invest
• 46:14~49:07 – Application process
• 49:07~50:39 – Teaching compound interest
• 5o:39~52:19 – Favorite resources and books
• 52:19~53:36 – Conclusion

Resources:

• Article on USAA’s Saving Button
• Professor of Behavioral Decision Making (UCLA) – Shlomo Benartzi
• Richard Thaler – Nudge

Notable Quote:

• “When you ask people why they should save, most of them give you back negative answers. If something were to happen to you then you can tap into that [savings] fund. There is fear-based motivation for people to save and people do not want to think about fear at all.”

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.