Visualizing future financial literacy
The future of financial literacy needs a visual upgrade. And it can take a page out of the urban history book.
Achieving financial literacy is hard. Beyond the basics, there are complicated and complex considerations one must assimilate before one can be savvy. Moreover, all of us are literate and illiterate to different degrees, for different financial products, and at different stages of our lives. For example, those who have been savvy for decades might struggle with the ins and outs of crypto exchanges and non-fungible tokens. Conversely, many whose first financial forays were into meme stocks have yet to experience, much less understand, what high inflation and interest rates mean.
It could get harder. Even as our general level of financial literacy has increased, our financial illiteracy for specific products risks falling behind as their numbers grow rapidly in diversity and complexity.
Our growing illiteracy for the specifics could outstrip our growing general literacy.
We have to make it easier. This is where a page from the past on a different type of urban illiteracy can help.
In the first half of last century, the majority of those who lived in cities or chose to move there were illiterate. This posed a problem for the cities – how can cities bridge the literate and illiterate when complex issues need to be explained to both?
Three people came together to tackle this problem. They were Otto Neurath, a sociologist, science philosopher, political economist, and founding director of Vienna’s Gesellschafts- und Wirtschaftsmuseum (Social and Economic Museum); Gerd Arntz, a Modernist artist known for his wood cuts; and Marie Reidemeister, a writer,
social scientist, and designer who was first trained in physics and mathematics.
Together, they created ISOTYPE (International System Of TYpographic Picture Education). These were a series of standardized pictograms representing complex “social-scientific data”, that could be “easily interpreted by all across society”. The pictograms made it possible for anyone and everyone to “participate in a common culture”, so that when “the canyon between the educated and the uneducated is bridged, life will be more fully understood and lived.”
Fast forward to today, and we see ISOTYPE’s influence and impact everywhere. On the roads, we see as many pictograms (such as traffic signs) as written signs. Visuals are core to wayfinding design in many cities, helping residents and tourists alike navigate neighborhoods, precincts, and attractions. In public and private sector communications, info-graphics are now de rigueur.
No wonder then that the Victoria & Albert Museum’s 2010 exhibition “Isotype: international picture language” was curated to illustrate “how pictures can be used to explain complex issues to ordinary people”.
Almost a century after the idea for ISOTYPE was first seeded, we need its financial literacy equivalent.
Imagine calling it FINOTYPE (Financial International Network Of TYpographic Picture Education). We need FINOTYPE to explain complex financial issues to both the financially literate and illiterate. That way, we can bridge the gap between them, and their financial future can be more fully understood, lived, and secured.
FINOTYPE can build on the prevailing momentum towards visuals. Financial products now come with better and more charts to illustrate, for example, portfolio holdings and returns. Bank apps include visualizations of spending patterns and investment needs. And newer financial and trading websites targeting millennials and Gen-Zs emphasise memes, info-graphics, and even comics.
Building on this momentum, the proposed FINOTYPE could borrow three lessons from ISOTYPE’s history.
The first is to commit to a visual language. This commitment – whether at the organization, industry, or city-/country-levels
— is grounded in the conviction that “[t]o remember simplified pictures is better than to forget accurate figures” (which was the Gesellschafts- und Wirtschaftsmuseum’s catchphrase). Like ISOTYPE, the visuals can become a crucial “helping language” that complements the text-heavy modus operandi found in financial planning.
The second lesson is FINOTYPE must be designed by multiand inter-disciplinary teams. These teams must span finance, technology, design, law, and social sciences, just to name a few. They must take inspiration from the three ISOTYPE pioneers, who came from diverse disciplines and backgrounds. Their individual and collective span strengthened their sensibilities and abilities to design easily interpreted standardized pictograms.
Inclusive – even universal design — is the third lesson. Like ISOTYPE, FINOTYPE must be “effective across a wide range of ages and abilities and... speak as clearly (though probably at different levels) to a young child as to an intelligent adult.” This is especially important for FINOTYPE, as financial literacy can start at any age, is relevant for anyone, and must be practiced by everyone.
But ISOTYPE is a pre-digital era innovation. Can FINOTPYE take advantage of the digital age and do better?
Yes it can.
In an experiment conducted by researchers from Harvard University, Microsoft Research, and Stanford University, research participants were divided into two groups. Using virtual technology, the first group was shown digitally aged avatars of themselves. The second group was shown a digital “current-self”. When they were subsequently given a thousand dollars to choose among four choices – “buying something nice for someone special, investing in a retirement fund, planning a fun event, or putting money into a checking account” — the aged-avatars group put almost double the monies into the retirement fund compared to the current-self group.
In other words, by getting people to visualize their future, their digitally-aged picture was no longer just worth a thousand words.
It was also worth closer to a thousand dollars in financial literacy.
Now visualize what that could mean for all our future finances.