“If you start with human desirability, then you can fold in other elements, like technical feasibility and business viability, and you know you’re meeting the needs of the consumer.”

Episode 17: The Intersection of Health and Wealth

Russ Kliman, Global Leader of SEI Ventures, and Jacqueline Baker, VP of Startup Programming at AARP Innovation Labs, talk about the rapidly evolving connection between health and wealth—and how technology can support it.

Enjoy Episode 17.

Transcript

Announcer: Hi, everyone. Thanks for joining us back at The Intersection, a podcast that brings you candid conversations with members of our community and leaders in our industry. Enjoy today's episode.

Leslie Wojcik: Hello and welcome. I'm Leslie Wojcik, head of global communications at SEI. Today we're joined by Jacqueline Baker, VP of startup programming at AARP, and Russ Kliman, our global leader of SEI Ventures. They're here to discuss a fascinating topic, the intersection of health and wealth, both of which are shaped by individual behaviors as well as environmental factors. Welcome guys. Thanks for joining us.

Russ Kliman: Thank you.

Jacqueline Baker: Absolutely. Thank you for having us.

Leslie Wojcik: We're really excited to have you on today. So I'm just going to jump in and I'd like to start by asking how the two of you became connected.

Jacqueline Baker: Sure. I would love to share that we have a unique opportunity to work alongside each other or across the aisle from each other. However you want to define it with a program that we utilize to find some of the best and brightest startups, which I'll speak a little bit more to later on called MassChallenge. And so that's really where we became connected, right Russ?

Russ Kliman: Yeah, I mean, we got introduced at MassChallenge FinTech, which is a great accelerator based in the Boston community area. And it really is a great community of all different types of financial service intermediaries, and that actually straddle both health and fintech areas. And so we're always in these community events and MassChallenge and that team was great to introduce us. And as we got to start talking about things like human factors and human-centered design and things of that nature, we really kind of identified a lot of commonality and a lot of opportunities to kind of share and learn from each other.

Leslie Wojcik: Jacqueline, I know that we had a chance to speak before today. And you talked about this concept of reverse pitches, which is so incredibly intriguing. Can you explain a little bit about the benefits, what it is the approach for our listeners?

Jacqueline Baker: Sure. Over in the AARP Innovation Labs world, we are totally not new to pitches. It is what, what is this April by now in the normal world? I would have been at so many pitch events, either judging in-person or supporting in-person. And while we're not doing those things in the real world, that work still actually persists virtually. But this whole concept of reverse pitching is actually really exciting to be a part of because what it does is it allows the startups to have a bit more power. Instead of what we typically notice, which is startups pitching to large organizations, imagine a reverse of that where large organizations are pitching to startups? To say, "Hey, you should be interested in us. You should be interested in what we're looking to make progress on in the world and what our mission, vision and values are." And so it's really putting more power into the startups hands, and letting them know what we're about as an organization and seeing if they want to be involved. It's a little bit more of a reverse dating situation as well, but it's been highly beneficial to us over the years.

Leslie Wojcik: That's amazing. I love it. I just think that it's a perfect way to build a relationship without partnership with these small startups. How do the financial services and health services intersect?

Russ Kliman: Yeah, that's a great question. I mean, I think one of the things that we've continued to see within the market is that certainly with COVID-19, it has really brought to the forefront, I think, concerns over health and its impact to not only our health and how we're doing, but also our financial lives. And I think what we've seen in the marketplace is really an acceleration and a focus being placed on the impact of health and wellness as it relates to financial planning and planning for that future. And we've seen it impact everything from whether you're in that accumulation phase. And you have an unplanned event in terms of gaps in income, or whether you're in that de-accumulation phase in terms of lifestyle and living expenses and actually taking advantage of the income that you've saved.

 And so we've really seen kind of this explosion within the space where organizations traditionally and planning tools traditionally have looked at the knowns, retirement, buying a home, college education. And really what a lot of the new capabilities that we're seeing because of COVID and other types of elements is really this explosion of helping people predict and plan around the unknowns. And really things to help you better plan and help you have a better understanding of the total financial picture, in combination with health and wellness and longevity within the marketplace.

Jacqueline Baker: Although we, over on the AARP Innovation Lab side have known for quite some time that there's a direct correlation with healthtech and fintech, I am really excited that it's becoming a topic of conversation beyond the spaces that SEI and AARP sit and to Russ's point, it's been fascinating and also a bit disheartening if we're being honest, that specifically during the times of COVID, we can see the direct correlations between healthtech and fintech between health-related issues and financial related issues, especially in areas that experience a significant amount of disparities. And so we can directly see that, "Hey, when you have a health-related issue, and if you don't have the proper protocols or services in place, it's directly going to impact you financially and vice versa."

 We've also been able to see a significant number of startups that sit at the intersection of healthtech and fintech through the work that we've been doing with Mass Challenge i.e. where Russ and I became acquainted. And so we see clearly where those intersections happen, but more importantly, we can see an uptick in organizations that are taking notice of that and startups that are finding solutions to impact that as well.

Leslie Wojcik: Yeah, it definitely brings a lot of focus on a full life picture, not just the financial picture, or a health picture. Why is it so important to engage with these startups in this space?

Jacqueline Baker: Oh, I'll totally raise my hand first to talk about that. And one of the reasons why it excites me to talk about this is because I work with a lot of smart people, and I'm sure everyone who's listening in today can attest to working with a lot of smart people. Maybe not every one's smart, but you work with a lot of smart people, right? But the challenging part with working with a lot of smart people is, many of us are also marching towards a vision, or marching towards whatever our company's mission or roadmap is leading us towards. But they're big issues. We're looking to solve monumental issues around healthtech and fintech and self-fulfillment. And with these monumental issues that have existed for decades, sometimes hundreds of years, while I work with a lot of smart people, there are issues that are bigger than us.

 And so by securing and discovering some of the best and brightest startups in the fintech and healthtech space, what that allows us to do is really exponentialize our manpower. That allows us to move a lot faster, to really come to some solutions that perhaps we can come to as quickly as we would have liked to because of how we're organizationally set up. And so in short, we work with startups and we find some of the best and brightest startups to help to reach and march towards the mission that we're looking to impact, which of course on the AARP side is to empower people to choose to live how they want as they age. They help exponentialize our manpower.

Russ Kliman: Yeah, absolutely. And I would piggyback off of what Jacqueline said. I think one of the things that an SEI perspective is, we always recognize that innovation happens not just within your four walls, but outside of your four walls. And if you're constantly kind of looking inward, you're really not moving that needle of opportunity to really challenge how you look at the world. And that's where, as Jacqueline said, I mean, startups bring this unique lens to the table to really help challenge how you always look at solving problems. And they look at it in a very different way. And I think that, bringing that outside in is an amazing way to accelerate innovation within any enterprise. But as Jacqueline said, it's also to solve some pretty significant problems. It's to look at things in a very different way.

 And when you think about health and retirement and longevity, and having the finances to support your life in a wealth management perspective, you really need to kind of step back from kind of how you had always been looking at things, and really bring that outside perspective in. And that's really what these startups do to us and help drive that innovative look at the world.

Leslie Wojcik: You know, many people are becoming more aware of the longevity economy, and the emergence of Age-Tech. Can you guys discuss a little bit where the knowledge gap lies for the aging population?

Jacqueline Baker: The interesting thing about that question is if I specifically focus the aging population, because I think about that in two different ways. I not only think about people, of course, as they're aging, but I also think about the many service providers that are looking to serve the aging population. And as we have known through lots of the reports that we even produce over at AARP, they're available aarp.org. We know that the longevity economy is 7.6 plus trillion. Actually, I think it's up to 8.3 now, it's a $8.3 trillion economy. But a lot of times what's not taken into account is how do we properly service this segment of people, right? We know that there are lots of organizations across the world that create products and services specifically for people as they age. But if you're not really paying attention to what does the consumer want, how do we properly serve the consumer, then you're missing out on some opportunities.

 I think on the aging space, as it relates to people who are actually aging, what's really exciting is that even as me and my team and lots of people across the AARP enterprise stomp the yard if you wish, travel around the country, have conversations about our innovation work, we know that there's still lots of work to do. There are lots of people that are still like, "Wow, you have an innovation lab? You do innovation-related work? That's a thing?" And so for us, we recognize there are lots of people that don't even realize that a lot of the startup work that we're able to discover and exponentialize, they don't even know that it exists. I mean, imagine medication adherence robots that are able to serve people, but they don't even know that it exists. And so it's a matter of education.

We're really excited that several times of the year, particularly when it's not in COVID time, we get a chance to do things called innovation exposés. And that is where we actually go to our state offices and invite in our members who can experience the technology of our startups to make sure that they get access to it. And they understand that it exists. So in large part, and in short, and in summary there, it is hugely education. Education to a lot of organizations across the country who are serving the 50-plus market, but also the 50-plus market itself so that they know that these products and services and innovations exist.

Russ Kliman: And I would add to that. I think one of the things that we think about it from an SEI perspective, and just from a venture capital perspective as we're looking at companies is, people are active and they're aging much longer, and they're utilizing those funds much longer than in years past. And so, as you think about things like financial planning and wealth management and how that money is going to be used during that de-accumulation phase, how can you make sure you can maximize the opportunities within that and leverage the capabilities of AI and machine learning and advanced technologies to help people better utilize that wealth that they've accumulated as they're more active and longer. And as we talked about earlier, when you start to think about health events and life events, how you can plan them and predict more consistently with them.

Leslie Wojcik: Jacqueline, you touched a little bit upon the opportunity to experience the technology. And when you use the word human-centric, or human-centered design, what does that mean? What do you mean by that?

Jacqueline Baker: At the root of it all, it really means keeping the human at the center of the things that you're building. And I have to go back to once again, us all working with smart people. What happens when we work with smart people? Smart people think that they know the answer. Sometimes they know the answer, but sometimes they don't. Sometimes we have to realize that we have to pump our brakes and ask the people that are actually going to be the end users of the products or services or innovations that you're creating. And that essentially is a huge part of human-centered design. Did we ask the consumer? Did we test it? How are these buttons? How was the experience? It's really just really checking the box on does this make sense for the end user? I'm very grateful that actually our design thinking team, which focuses on human-centered design actually sits within the startup programming group.

 So I get a chance to work with those folks every single day, which is fantastic, but just like I'd make jokes about not being too smart for your own good. They push back on me. They may ask questions like, "Hey, did we really ask the consumer? Does that really make sense?" It feels like a good idea, but is it really a good idea? And so every day that I get a chance to work with them, I'm humble. And I'm called to the carpet as well to make sure that we are truly practicing what we preach as it relates to human-centered design.

Russ Kliman: Yeah. I mean, that's spot on. I mean, I think one of the things that organizationally from an SEI perspective is I think when we started to roll out design thinking as an enterprise, one of the main things to Jacqueline's point is we really focused on that human desirability element first. Who are the personas who are using our products and services, what do they value? What goals are they trying to achieve? What obstacles are in their way, and how do they look at the world? And if you start with that kind of human desirability, everything else falls into place. And I think traditionally in industries, all different types of industries, they may look at the technical feasibility, or they may look at the business viability first. But if you start with that human desirability, then you can fold in those other elements. And you know you're going to be meeting the needs of that consumer, that financial intermediary, that advisor, that wealth manager. And that's really the essence of it really being kind of that human-centered design approach.

Leslie Wojcik: That's terrific and so important. It's critical, really. Where do you see the greatest opportunities for financial and health services to partner today even, but also then the next five to 10 years?

Russ Kliman: I think I would start off with there's such an opportunity, especially from that consumer standpoint, that human-centered design standpoint kind of playing off that language is the consumer is not seeing things in silos any longer. And a consumer really wants that holistic integrated experience where it's no longer my banking relationships, my financial relationships, my health, my wellness, and other elements in particular silos, it's really that convergence. And so when you start to think about insurance and credit and lending, wealth management, health, all of those elements are combined together. And so I think really the greatest opportunity is how can we reduce the friction within that experience? How can we create greater transparency and more integrated capabilities? And then based off of that, now you have data that you can leverage to create greater value. Greater insights, and greater capabilities to deliver to that end customer and to those that are servicing them. And I think that for me is that opportunity of that convergence, that blending, and then leveraging the data and the knowledge to deliver greater value, or hyper personalization value, greater predictive analytics, and creating those greater insights.

Jacqueline Baker: I think I see two areas. One is just the realization and middle that they have the opportunity to benefit from each other. To not just operate in a, I am a financial services organization and the health services industry doesn't matter to me. Because if you're trying to truly serve your customer at the end of the day, you should really care a bit about holistically, where are they at? Not just finance and not just health, but what does it look like for your consumers to win on both sides? So I think number one, just admitting that you can benefit, and you can benefit not only your organization, but also create great value for your end consumer as well. The second is really eliminating the statement the reason that we do this thing this way is because historically it has worked for us. And I think so many organizations, especially organizations that are more in the fintech and healthtech realm that have been around for many years that may define themselves as legacy organizations have had a level of success decade over decade.

And we're quickly realizing, I mean, we honestly should have realized it many years ago with that of blockbuster, et cetera, that the way we always did things is just not going to work for us long-term. I think that a very basic way of thinking about that is something that happened to me the other day. I bank with Chase. I'm originally from Detroit, and Chase is one of the banks that happens to be in Michigan. And I remember a day when you had to go into the branch to actually open up a savings account. And now there's an option, you can literally open your app and open up a savings account, which was unheard of back in the day. And although it's a super minor thing, it's the ability to be flexible to say, "Hey, people aren't really coming into banks anymore. So can we rethink our strategy altogether?" Just basic things like that. And so I really think that it is a matter of truly embracing the idea of innovation and meeting the consumer where they're at.

Russ Kliman: Absolutely. I think at SEI, we call it kind of challenging our mental models of how things have always been done. And if you don't challenge your mental models, you're going to die standing there watching others do it for you.

Jacqueline Baker: Absolutely.

Leslie Wojcik: Well, this has been absolutely insightful in covering the convergence of every aspect of our lives, but also just the rapid evolution of technology and how critical it is in shaping how we interact with our full lives going forward. And hopefully for our listeners you help close the knowledge gap a little today as well and raise awareness for it. But thank you so much for joining us today, both of you.

Jacqueline Baker: Absolutely.

Russ Kliman: Thanks for having us.

Announcer: Thanks so much for joining us today. Stay tuned for more conversations with members of our community. Until next time, stay well. And of course we hope you'll meet us back at The Intersection too.