Automation Beats Willpower Everytime. How AI is Changing Financial Behavior

Monisha Saldanha (00:00) Welcome to Colorado Tech People, where we talk with leaders using technology to solve real world problems. I am your host, Monisha Saldanha an executive with 15 years of product management experience. Today's episode explores how FinTech and digital coaching are helping employees build healthier financial lives. I'm joined by Colorado based Kevin Fator, Chief Product Officer at Financial Finesse. a company focused on delivering financial wellness tools and guidance to organizations and their employees. Millions of people are doing everything right, working hard, earning a steady income, yet they still feel like they're one unexpected expense away from financial chaos. Why is financial stability so hard to achieve, and what does it actually take to break that cycle? We'll discuss the product decisions behind financial wellness technology. the role of AI in scaling coaching, and the real impact these tools can have on people's lives. Welcome, Kevin. Thank you so much for joining us today. Kevin Fattor (01:02) Thank you for having me, Monisha. It's great to be here. Monisha Saldanha (01:04) So let's dive in. What was the problem financial finesse was built to solve and what is the solution? Kevin Fattor (01:10) Yeah, so our founder, Liz Davidson, is a remarkable entrepreneur and a remarkable human being. She had spun up a hedge fund in her 20s, so this is back in the 90s, and she was realizing that as she was raising money from this very wealthy 1 % that can contribute to such things, that even they did not have a solid grasp on personal finance and that they were making terrible mistakes and they were very vulnerable in many cases. And she took the next step to say, if these incredibly privileged people who have so much available to them, don't have good knowledge, don't make good decisions, then what hope is there for ordinary people who are really at risk? And so she shifted gears entirely and focused on how do we bring good, unbiased financial information and coaching to the masses? And the business model that worked was going through employers. So we provide unbiased, totally independent financial coaching at no cost to the end user and totally unlimited. We help out as much as they need. And all of this is paid for entirely by their employer or maybe their retirement plan. And through this model over the course of 26 years, we now have millions of eligible users and we've impacted countless lives. Liz created this industry and although there are many different companies that have entered the market since we remain the gold standard. Monisha Saldanha (02:50) And you mentioned that the model that works is the employer's pay for the service. Was there another model that Liz had tried first? Kevin Fattor (02:59) Oh, sure. She tried a number of things and this was well before my time. I've only been with Financial Finesse for a little over four years. But in the early days, I believe she did try more of a B2C model where she would put together events and try to sell directly to end users. And that wasn't the one that worked. She needed to do it at much bigger scale than that. Monisha Saldanha (03:23) Interesting. Yeah, so there was a pivot there from B to C to B to B to C. Yeah, cool. How do you define financial wellness? Kevin Fattor (03:29) Yeah. I need to be very clear upfront that I am not a CFP like many of my colleagues are and I need to give Liz full credit for creating this company and this incredible model. There's so much here that predates me. But as the tech and product guy, of course I have my point of view and I'm happy to share it with you. My passion for personal financial wellness goes well before I joined Financial Finesse which made it such a good fit for me. The way that I see it... is that financial wellness, key pieces of it, number one is financial security. Do you feel safe? And then secondly, financial freedom. Are you able to do what you really want to do both in the present and in the future? Monisha Saldanha (04:20) Okay, so safety and freedom are the primary tenets of financial wellness. And how do you measure whether someone is financially well? Kevin Fattor (04:31) There's any number of milestones along the journey that matter a lot. Resilience is a big one. So can somebody withstand a setback? If they were to lose their main source of income or they were to get a large unexpected expense or something like that, how well are they able to absorb that shock? And that can be accomplished by savings, through having your debt under control, by being properly insured. There's any number of things that lead into resilience. And then beyond that, how well they're prepared for the future. Are they on track for retirement? Are they on track for college savings if that's a goal for them or home ownership if that's a goal for them? So looking forward to have the plans in place to accomplish what they really want. Monisha Saldanha (05:18) You mentioned earlier that even people with very high incomes can be financially unwell. Why do so many people who have stable incomes still feel financially insecure? And what are the most common hidden traps they fall into? Kevin Fattor (05:30) Yeah If you're lucky enough to have an income that meets your needs and feel a sense of job security, then that's already an achievement to be celebrated. But it is not necessarily enough to free you of the stress of financial burdens. So there are some things that can factor into this. Overspending, depleted savings, high interest debt, they can eat right in. into your confidence and they can make you feel terrible, even at high income levels. A common trap is lifestyle creep. So let's say that you're working hard and you're just barely making ends meet and you are able to secure a promotion, get a raise, bought yourself some room, and then you reward yourself with a new car and a vacation, which eats up your raise. Despite operating at a higher income level, you're still going to be back in the position of working really hard, just trying to keep up. So if you can keep your needs in check as you progress, that creates cushion that makes everything else possible. Monisha Saldanha (06:36) So basically spend less than you earn. Kevin Fattor (06:38) It's good advice if you can do it, yes. Monisha Saldanha (06:41) And how can someone move from short-term survival, like paycheck to paycheck living, to building long-term financial resilience? Kevin Fattor (06:49) This is a tough one because I feel like you have to start with a real acknowledgement that there are people out there who are really struggling and they may not have very many choices in a moment of crisis and just to honor the fact that any advice will sound simplistic and reductive to them. But to anyone who might be feeling that way, who's hearing this now, I do want to emphasize there is always hope. Every day at Financial Finesse, we see people come back from the brink. They can overcome even dire circumstances just by being committed and patient and resourceful. Keep putting one foot in front of the other. Do the best that you can with the options that you have and you will see your options increase and you can take more action. before you know it. So a couple of key lessons that we see here. One is that it is far easier to climb the mountain if you have somebody working with you. Our coaches are fantastic for that. I would encourage anybody to check with their HR, if they're feeling this way, see if you have access to financial finesse. We do find that a lot of people do and don't even know it. I would absolutely recommend connecting with one of our coaches if somebody's really struggling. Secondly, whether you do or don't have Financial Finesse I have been blown away by how much HR and benefits professionals are engaged, they really care, they have put forward a huge number of benefits that can help people who are in distress. Engage with them, find out what is available and take advantage of everything that could be of use to you. You will find that there are frequently things that you may not be aware of that are hugely helpful. Monisha Saldanha (08:40) And when you're building technology for financial coaching, how do you decide which features truly help users versus what might just add complexity? Kevin Fattor (08:49) Well, at the core of our offering is a personal financial wellness plan. So as a result of going through a short five minute assessment where they share their current situation, their goals, their challenges, we can... put together a plan for them, helping them to focus their energy on where it's going to matter the most in the short run. So we always build from the ground up. If you are paying your bills on time, great. The next step is to make sure that you're covered, that you have health insurance, that you have some amount of emergency savings, and so on. We just help to focus attention one thing at a time or a small number of things at a time in the order where they're going to have the biggest impact because we know that people are overwhelmed by the number of different actions that they could take on to try and improve their financial situation and that can lead to paralysis. So what is a good product enhancement for us is something that increases that personalization that helps them to focus their energy appropriately and that can generate deeper insights from messier inputs. Those three things are all great because it is frequently hard to really articulate all that is going on. So the more that we can meet people where they are and get it right, so that we're directing them where they need to go, the better. Monisha Saldanha (10:17) Can you give an example of a recent new product launch that went well or didn't go well and what you learned from it? Kevin Fattor (10:24) We are in the middle of a big transition right now. We had our platform, the center of it is referred to as the hub. And when I first joined four years ago, we were in the transition from the first iteration of the hub, the first version, which had a more basic financial wellness assessment, just a more scripted flow, ask a handful of questions, and then personalize from there to something way more complex that had, this was an algorithmic AI that could go down more than a trillion different paths. So every question fed into the next question while each person went through the same assessment, their experience of it could be very different. We are now in the process of launching Hub V3, which I'm happy to talk about. This is where we, among other things, we plugged in the LLM style chat. So this is trained on our proprietary material, as well as integrated with trusted sources like the IRS or Yahoo Finance to answer questions. And this has been transformative in creating another self-service option that will get people answers if that's what they're most comfortable with. So maybe they don't want to come through the library in order to, research something that is unclear to them. They have a place to start, maybe get their answer, get directed to resources if they want to dig deeper, and essentially they have another modality for how they can build up their own expertise. It's been great so far. It's been well received by everybody who's seen it and we think it's going to be transformative. Monisha Saldanha (12:07) What is the breakdown of people who want to use an AI tool versus want to call? What are you seeing as being more popular? Kevin Fattor (12:14) Yeah, so it's not even just AI tools. There is a strong preference for self-service from a large portion of the market. There are many reasons for this. There are certainly feelings of shame for what they don't know or feeling out of their depth Some people are very hesitant to expose that to another human, even though our coaches are the most approachable of all people. I've referred friends to this and I've specifically heard, yeah, I was gonna call, but then I spent a bunch of money on video games and I probably shouldn't have, so I didn't wanna call then. So anyway, so there is a strong desire for self-service for a lot of people, and self-service is sufficient for a lot of people. Using our platform, roughly, we service roughly 10 times as many people from the digital platform only. as those who go directly to a coach. And what we do find is from people who engage heavily, that they progress, progress, progress, and they may get to a position where they are stuck on the digital platform, and that's when they reach out. And they could say, I've done all of these things, but this is a sticking point for me, and I need somebody to help me plan. And the coaches are great for that. Monisha Saldanha (13:34) It's such a sensitive area. How do you manage building that trust for the people using the platform to share their financial information, which is so sensitive. Kevin Fattor (13:48) Yeah, well, first off, we operate within legal guardrails. We never veer into financial advice. We give guidance, coaching. We never recommend specific products. We have no way to profit from any decision that a user may make. We are very clear that what they share with us is kept confidential, we do not share it with their employer. It never becomes marketing input for anybody. We keep their data theirs. We try to earn trust a lot in other ways as well by acting with extremely high ethical standards. We always have humans in the loop. This means obviously their coaching is always available to them whenever they decide they need it. But beyond that, we have webinars where they can see a human face and they can get direct interaction with an expert, 10 plus years of experience and a CFP certification, all of whom are our employees, non-contracted. So we just do everything that we can to make it very clear that we are on their side and nobody else's. Our content is written internally by our experts. Our AIs are trained internally by our experts. At the end of the day, we are just so focused on quality and trustworthiness that we really do see a high degree of trust with our users. Monisha Saldanha (15:08) And does a certain amount of trust come from the fact that their company is recommending your service? Kevin Fattor (15:13) We'd certainly benefit from the fact that we've got amazing blue chip clients and somebody at a very high end firm, when they see that our service has been vetted and purchased by their employer is going to know that a certain amount of due diligence has been done and that we meet. standards of credibility and quality that were acceptable to them. We benefit from their due diligence and we get that reputational halo there. But then we do need to emphasize our independence from the employer and the fact that we are always on their side first and foremost as the individual. Monisha Saldanha (15:52) Was there a turning point where a product decision significantly changed how financial finance approached financial wellness? Kevin Fattor (16:00) Yeah, it's right now. It really is. So the introduction of AI at a different level is absolutely, you know, it's a turning point for the entire world. We've always had a high tech, high touch model and that's not going to change, but this gives us another flavor at it because Monisha Saldanha (16:03) you Kevin Fattor (16:18) the high touch doesn't necessarily have to be a handoff to a human for those who don't want that. We can express empathy. We can drive motivation. We can have open ended conversations and extreme personalization using these fantastic new tools that are at our disposal. This has been amazing so far and I think it's just going to keep getting more so. Monisha Saldanha (16:42) Can you talk a bit more about the AI tools that you're using? You mentioned that you have trained a model. What model have you trained? What are you building your AI tools on? Kevin Fattor (16:52) Yeah, behind the scenes we have Google Gemini but as I said, it's completely trained on our internal content and it is tested rigorously and refined with the help of our experts. I think it's been fascinating to add the chat experience, but there is more to AI than just chat. One thing that I really get excited about is plugging AI into workflows that users are already in that have a different modality. So say using our calculators. Those are already built for good UI and UX. It's way more appropriate to the task than an open chat experience. The idea of filling out as many fields as you would have to in chat to get a retirement projection, it sounds awful. So instead, what I like is being able to have a flow that is tried and true and tested that can then expand to encompass more edge cases, that can allow for more personalization without introducing complexity to everybody that they may not need. So being able to accomplish more without more work for the greatest variety of people is fantastic. As an example of this, AI for a retirement calculator, you can upload a folder full of messy files and we could pluck from that the values that are necessary to drive your projections. This is very much preferable to those who are up for it compared to having statements and re-keying all of the key figures. So taking messy inputs and turning them into profound insights is something that just wasn't possible not long ago. And building those kinds of tools is some of my favorite AI because it meets people where they are already. It doesn't necessarily confine them to a chat window. Monisha Saldanha (18:53) We've been talking about how you're using AI in the customer-facing tools. How are you using AI in your product and engineering teams Kevin Fattor (19:02) Every member of our engineering team is getting more and more comfortable with the various. agentic engineering techniques and tools that are out there. So Pace has picked up tremendously. I will say on the product side, it's been amazing to be able to deliver working prototypes rather than documents. There is nothing like it for conveying this is how I want it to work and allowing people to experience the benefits of it. And then they can take it and put it on our platform, our architecture, and make sure that it adheres in every way to our standards. It's just been fantastic in that way. Monisha Saldanha (19:45) What tools is the product team using to create working prototypes? Kevin Fattor (19:49) Most of us are using Claude Code. I believe that there are people using Cursor, there are people using Google. There is a certain amount of flexibility in what each person prefers and as new models come out and they leapfrog one another, we'll just keep chasing whichever is strongest. Monisha Saldanha (20:06) You mentioned that the pace has been picking up because of the use of these AI tools. How are you measuring the pace? Are you looking at tickets completed or how do you know that the pace is faster? Kevin Fattor (20:18) We operate on a quarterly basis and we set ambitious goals at the beginning of each quarter and at the end of the quarter they're done or not. What I can clearly see is that we've taken on bigger and bigger goals and we continue to hit them. As a matter of fact, we hit them more often than we did when the goals were more modest. Monisha Saldanha (20:41) Colorado is now a major tech hub. How do you personally benefit from the Colorado ecosystem and how does Financial Finesse benefit from having you as part of that community? Kevin Fattor (20:52) Financial Finesse is running a remote workforce. Everybody is fully distributed. We have headquarters in LA, but it's not that often that people are actually working directly in the office. So. I'm interested in living in Colorado, really only here. This is home for me. And so when that wasn't a problem for Financial Finesse, that was great news for me. But I think that having people like me distributed around the country has been hugely impactful for the product and tech team too, because we are plugged into major tech hubs like Denver, but also Silicon Valley and also New York and also Florida and also everywhere. And we have this foothold. So when we need to find additional talent, we've got more ways to reach in to different geographies and draw from the attributes of each one. So for more than 20 years, before coming to Financial Finesse I was a management and tech consultant. And of those, significant amount of my time was in Colorado, think about 11 years. And I had 15 or so Colorado-based clients. So having such a pool of people that I've worked side by side with, or that I've delighted as a customer, and they are within range to meet up for a cup of coffee, if something comes up where their level of genius, their level of global expertise meets up with one of my challenges or one of my goals, it's immensely powerful. And so I love having this network here. I love having such a vibrant community. Monisha Saldanha (22:34) We love the Colorado community for sure. Can you share an example of how Financial Finesse's technology has tangibly improved someone's financial situation or reduced financial stress? Kevin Fattor (22:36) Yeah. Absolutely. I'm on the product and tech side. Our most powerful stories are definitely those cases where we connect somebody with a coach and a coach can walk somebody who is really in crisis, who is teetering, who is very stressed and very, you know, it's affecting their wellness dramatically and to walk them back into a place of, hope and possibility and accomplishment. The stories are absolutely heartbreaking sometimes. and I love being a part of it. But within the technical platform, it's a little bit of a different story, but we see massive improvement on aggregate. So of those people who've come into our platform and initially report that they are experiencing high or overwhelming stress, more than 40 % of people all time who have stuck with the program have improved to some or none. That's a big number. That's a very big deal when you consider we have no ability to forgive their debts. We have no ability to impact their income or to decrease their expenses. What we can help with is setting a plan and helping them examine the resources that they have and helping them take the steps that are going to make a difference in their lives and reduce their stress over time. So I love that. Another thing is people come in at every level of financial wellness. We certainly have people who are planning and optimizing already by the time that they come to the platform and their needs are different than somebody who's in crisis or struggling. But what we find is that the number of people in our platform who are planning or optimizing as of their most recent visit is on the order of 70 % higher than that number when they come in on their first visit. So, so many people are able to graduate from crisis or struggling conditions, NC planning and optimizing where they can really set themselves up for the future they want. Monisha Saldanha (24:52) That's really great feedback. That's really great to see that shift. Is there any other feedback from users that has surprised you? Kevin Fattor (25:01) The one that most surprised me is not from our users, it's from our clients. So this would be their employers. The ROI. for employers rolling out financial wellness is absolutely off the charts. There are so many ways that financial stress costs employers. They lose productivity. They frequently end up with more absenteeism or presenteeism, which is a term I hadn't heard before coming here, where you show up, but you're not getting anything done. You're so distracted by stress that you'd probably be better off staying home. We see huge increases in loyalty and retention to employers, decreased health costs. When we can reduce stress for employees, it benefits the employers dramatically. And I think that's part of the reason we almost never lose clients once they are onboarded and once they've experienced the upside of financial wellness, they renew and expand rather than step back. Monisha Saldanha (26:10) Yeah, it's amazing to know that there is such a high ROI from implementing financial wellness. Looking ahead, how do you see financial wellness technology evolving in ways that could have meaningful improvements on people's lives over the next decade or so? Kevin Fattor (26:25) One of the things that I am most focused on is how AI in particular can be used to help establish or break habits. This is something that there is some research, but not enough. But AI has tremendous ability to generate novelty and there are all sorts of dopamine rushes. I think we've all seen examples where gamification has been done in a clumsy way, where there is this intent to lead you along a beneficial path, you know, with just dopamine hits. More often than not, it doesn't work and it can frequently be pretty cringy. But there is the possibility that AI can change the equation on that. And that by having more personalization and more extensibility, that we may be able to hold interest longer and go down that path. I think that's promising and I look forward to seeing what happens there. But there is another approach that I think is far more promising in the short run and that is automation beats willpower every time. A user can let us know that a priority for them is to buy life insurance. It is one thing for us to put that on their action plan and to trust their habits of recall and task management that they will take action on this. It is another thing entirely if AI can inform them, these are the benefits that you are entitled to with your employer and here's how you apply for them and to complete the forms with them, have access to a financial advisor through their retirement plan or their employer to say, you have access to this person, here's what you would want to tell them, I can draft an email for you, you can edit it and share it or not if you want. By removing those barriers, increasing automation, we can just get out of the world of willpower. Monisha Saldanha (28:27) That's an exciting future. What's one book that every builder should read and why? Kevin Fattor (28:32) I'm gonna go with two. One is an absolute classic. The design of everyday things is just one of my favorites. And I feel like this was something that powered the design revolution that we've all experienced over the last 20 plus years, where immense complexity is made simple to us so that each one of us can accomplish so much more within our limited attention span and our ability to retain information. I like books that are classic and stand the test of time. That one is absolutely on my list. I recommend it to people all the time. There's another one I don't think is all that well known. It's called On Intelligence. And this is interesting to me because it was well before the AI boom as we know it and as a model for intelligence, what intelligence is, a series of making predictions and testing them and feedback loops and things like that. I think it's actually really useful to have this as a vantage point when assessing all that we're learning about intelligence now. It is useful to have something that lives outside the current hype cycle as a way to think critically about how we're being taught about intelligence now. I think it's really great for that and it's a good read. It's really fun. Monisha Saldanha (29:53) That's a new one for me is I have to put it on my list. Thank you very much. Thank you, Kevin. This has been a great conversation. I really enjoyed it. I really appreciate the time that you spent with us today. Kevin Fattor (29:56) Good, yeah, check it out. Let me know. Thank you, Manisha, great to talk to you. Monisha Saldanha (30:06) And I'd like to thank our listeners for listening to this episode of Colorado Tech People. If you found our conversation on financial wellness and technology helpful, consider sharing this episode with a colleague or a leader in your network. Don't forget to subscribe so you can hear more conversations with the innovators shaping Colorado's tech ecosystem. Until next time, keep learning, keep building, and keep creating technology that makes a difference.