Login

NewTech Friday: Dreams – leveraging behavioral science to empower people 08 October 2021

Henrik Rosvall, CEO & co-founder of Dreams, discusses his company’s mission of changing how an entire generation approaches money and saving.
What led to the creation of Dreams?
 
Over the past couple of decades, many factors have come into play which have made it increasingly difficult for millennials to save and actually feel good about their money. This is the main reason why we created Dreams back in 2014, with the founding vision of improving the financial wellbeing of an entire generation.
 
On one hand, we have had a whole flurry of easily-accessible, one-click credit services that have emerged over the last few years, packaged to attract young consumers to consume with money they don’t have or to ‘buy now, pay later’. Needless to say, this has since bred a spending culture, leaving a whole generation living paycheck-to-paycheck. 
 
At the same time, having worked in the banking sector for several years, I have also witnessed first-hand how financial institutions have repeatedly struggled to effectively and understandably communicate with younger customers about asset management and personal finance products.
 
We are now faced with an entire generation of young consumers that are struggling to save money, and even worse, to get out of debt. In fact, according to a 2018 report by Office for National Statistics, over half (53%) of 22- to 29-year-olds in the UK had no money set aside in a savings account or an Individual Savings Account (ISA). 
 
Our mission with setting up Dreams was to not only empower people to feel better about their money but also to change how an entire generation of people interact with financial services, and it quickly became apparent that the best way of achieving this mission on a much greater scale was by partnering directly with large banks and offering our service to their customers.
 
We initially launched as a money-saving and investment app in Sweden in 2016, and then in Norway in 2018, where we achieved a 16% market share of all 20-39-year-olds in both countries, in just under four years. Over the past year, however, we announced two strategic partnerships with banking software provider Silverlake Symmetri, and Ukrainian commercial bank UKRSIBBANK, marking an expansion of our company’s business model into the B2B space, as we shift our focus to creating long-lasting engagement between banks and their customers.

Could you present Dreams' offer?
 
In short, Dreams offers engagement banking solutions that leverage insights from cognitive and behavioral science to enhance financial wellbeing. Our financial wellbeing platform helps end-users feel good about their money by enabling them to not only become better at saving and paying off debt, but also to allocate the money they have saved towards investments. A core part of our product offering and savings module is indeed around micro-investments and helping users move money away from deposits into investments. In fact, 20% of our customers have started investing money for the first time after using our platform and realizing that they can actually save for the long-term.
 
In turn, banks can leverage our proprietary financial wellbeing technology and behavioral science methodology to cater to the needs of new, underserved target audiences, and significantly increase engagement, retention, and customer lifetime value of their existing customers - something that is becoming an increasing priority for financial institutions ahead of the next big wealth transfer.
 
Over the next few decades an estimated £5.5 trillion of wealth is set to move hands in the UK, and much of this money will be flowing into the bank accounts of Generation Xers and Generation Yers. With this next great intergenerational wealth transfer on the horizon, the need for banks to create meaningful engagement with young consumers and equip them with the necessary tools to effectively manage and invest their money has become an absolute necessity if they want to stay relevant in this increasingly competitive landscape.
 
In order to deliver services that resonate with young consumers, Dreams works closely with research and academia to develop our innovations and methodology. We’ve even set up a separate research arm of our business, called Dreams Institute, which is headed up by its CEO and our Chief Scientific Officer, Elin Helander, a celebrated neuroscientist formerly working for the Karolinska Institute in Stockholm. Through Dreams Institute, we are able to initiate relevant studies with some of the world’s top universities on matters relating to money, behavioral science, and personal finance management. So in many ways, Dreams is as much a science company as it is a tech company. 
 
One of the ways that we incorporate behavioral science within our financial wellbeing platform is through the numerous saving hacks that we offer. The saving hacks are powered by different algorithms which leverage certain behavioral science principles and gamification to challenge users to improve their financial lives and change their spending habits for the better. Through these innovative hacks, users can benefit from automatic and seamless transfers of money from their current account to their ‘Dreams’ savings accounts. For instance, one of our most popular hacks, “The Thief”, ‘steals’ varying, small amounts each week from the user’s salary account and adds it to their ‘Dreams’ savings account. Some of our other saving hacks are rooted in behavioral change, inciting users to save money by changing their lifestyle and implementing more sustainable consumption and spending habits. These include “Quit Smoking”, “Skip Takeout Food'' and “Exercise Outside”, to name a few. 
 
What's coming next for Dreams?

As we continue to shift our business strategy into the B2B space, our main focus, for the foreseeable future at least, will be on expanding our footprint to various markets across Europe and beyond, and to continue to help banks provide value to their customers through our financial wellbeing platform.

This, of course, will require further investment in our methodology and behavioral science research in order to best serve our product innovation teams and ensure that our banks are equipped with an outstanding digital user experience.
 
Above anything else, we have a vast array of really exciting partnerships and new innovations in the pipeline, which we cannot wait to unveil in the next 12 months. Our mission is to help people around the world take back control of their financial lives and have a positive attitude towards money, and for us, these partnerships are crucial in order to bring this bold vision to light and achieve our mission on an even greater scale.

Related Content

BCG I love my bank
Presentation
BCG I love my bank 20 October 2021
Death by a thousand digital wallets
Article
imagin: Data driven customer journey
Presentation
Bank BRI: Ceria, seamless but secured
Presentation