1. Deciphering New Customer Needs in
Financial Services 2027
Julian Fung
jzf1358@truman.edu, (872) 203-4854
Truman State University
Charles Boughton
boughton@truman.edu, (660) 785-4521

2. DST Robert L. Gould Scholastic Award 2016-2017
1
Executive Summary
The world around is rapidly changing. Self-driving cars and drone-delivered packages are no longer
a fiction of the future. Technology is driving costs lower, creating new markets, and bringing previously
untapped customers into existing markets. For example, the cost of various online services such as hosting
a website or accessing financial databases is steadily approaching zero. At the same time, Silicon Valley
startups like Uber and AirBnB are disrupting industries that were thought to have immense barriers to
entry that would secure the market for decades to come. This form of democratization has now reached
the financial services industry, as Wall Street and Silicon Valley steadily converge.
The financial services industry is already evolving faster than it ever has before, and this trend will
only accelerate over the next 10 years. Today’s disruptors such as TransferWise that cut out the
middleman when sending money abroad or mobile banks that solely interact with customers through their
smartphones hint at what major changes may happen in the years to come. Based on the trends extending
from my aggregate research, I see these changes to be driven by (1) needs for new services among key
demographics, (2) an increasing focus on healthcare planning, (3) increasing industry regulation, and (4)
disruptive technology.
Three demographics will play a particularly important role over the next decade: Millennials exhibit
a lifestyle that demands entirely new financial products, an increasing population of older people require
greater attention to their deteriorating thinking and processing capabilities, while the exponential growth
of full-time freelancers calls for new savings and retirement planning products. Moreover, as healthcare
costs continue to rise, healthcare planning will become a bigger priority and play a larger role in the
financial planning process. In particular, Health Savings Accounts (HSA) will become of major savings and
tax-beneficial instrument. Likewise, increasing costs of risk will result in heavier regulation.
On top of that, I foresee four major technological disruptions. First, by lifting barriers of entry,
fueling competition, and decreasing prices, technology will democratize the industry and bring in a large
new customer base. Second, behavioral science and big data will provide improved behavioral profiling
techniques to better reach customers. Third, on the B2B end, Blockchain is expected to disrupt the way
financial transactions are being processed. The prospect of “smart contracts” that are linked to all
stakeholders may possibly render financial intermediaries unnecessary. Finally, artificial intelligence (AI)
will start to play an important role in people’s financial lives and revolutionize financial decision making.
From budgeting our everyday spending to creating a financial plan for the next decades, AI will become our
trusted, unbiased advisor.
Although it is unclear whether all these developments will happen in the next 5, 10, or 15 years, it
is certain that the financial world as we know it will drastically differ in 10 years.

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Emergence of Key Demographics
Millennials and their Vastly Different Needs
At 75.4 million in numbers, Millennials have recently surpassed Baby Boomers as the nation’s
largest living generation.1
In 10 years, Millennials will be about 28 to 44 years of age and in their career
primetime, where they would require an array of sophisticated financial services. However, they have
completely different needs and preferences, and generally a different outlook on life.
Millennials no longer want to save solely for retirement, but also for many different goals
concurrently. Millennials are far more adventurous and prefer more freedom over being tied down to one
place. Consequently, Millennials are more inclined to defer buying big houses, getting married, and settling
down, which frees up finances for exploring and moving around.2
Furthermore, car ownership among
urban Millennials will continue to decrease, as ride-hailing services such as Uber and self-driving
technologies continue to develop and exacerbate current trends. In addition, Millennials need to pay off
their student loan debts, which are higher than any other generation.3
This in turn creates a desire to save
more for their kids’ college. Moreover, there is increasing longevity among Millennials, and they need new
products or services like longevity annuities as they live and work longer.
These changing needs of Millennials are likely to continue into the future, and firms must provide
unique, tailored goal-based services to them. Additionally, financial advisors must acquire necessary
skillsets to help Millennials not just plan for retirement, but also assess where they are at and help them
navigate the entire financial jungle - travel planning and budgeting, improving credit scores, paying debts
and saving for their kids’ college, contingency funds, and more.4
Considering the Needs of Older People
Another part of the population that will play an increasingly important and pivotal role are elderly
people. The proportion of aging population is predicted to increase dramatically, primarily because the
baby boomer generation is currently reaching retirement. Moreover, according to the St. Louis Fed, wealth
will be concentrated in this age bracket, and recent studies show that decision-making becomes
increasingly difficult with age.5
Thus, financial services firms need to design and communicate their
services with an awareness of how older people’s thinking and processing capabilities deteriorate.
Research has provided striking evidence that older people have decreased numeracy and financial
literacy skills. Studies found that financial capabilities peak at age 60.6
Another experiment brought to light
that older people struggle evaluating probabilities. For example, when asked whether a 1 in 10, 1 in 100 or
1
Fry, Richard. “Millennials Overtake Baby Boomers.” PewResearchCenter, 25 Apr 2016.
2
Jones, Charisse. “For Millennials goal is financial freedom.” USA Today, 11 Apr 2015.
3
Glum, Julia. “Student Debt Crisis 2016.” International Business Times, 6 May 2016.
4
Smith, Anne. “Financial Planners for Young Clients.” Kiplinger, 1 November 2014.
5
“Wealth Gap Widens between Young and Old Families.” St. Louis FED, Jul 2015.
6
Li, Ye, et al. “Sound credit scores and financial decisions despite cognitive aging.” PNAS, January 2015, Vol 112, No.1.

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1 in 1000 chance of getting a disease was the greatest, 29% were unable to choose the correct answer.7
Although financial advisors may already experience these challenges, financial services companies as a
whole need to understand that older people have trouble processing financial information and need to
adapt their communications and product offerings.
Additionally, older people struggle when making decisions with too many options. Behavioral
economists call this phenomenon choice overload - people are overwhelmed by having too much choice
and tend to stick to the status quo, even if such a choice is suboptimal. In a 2008 study, younger and older
adults were asked to make healthcare decisions for hospitals or prescription drugs. Against the economic
paradigm that more choice is better, the results showed that older people preferred having a smaller
choice set. Other studies have found that having too many options increases the likelihood that older
people fail to choose the best product for themselves. Thus, financial services companies need to carefully
consider how they present and structure choice to elderly customers. By restricting the choice set, wealth
managers can actually help people make better decisions.
Moreover, financial advisors also need to understand how to better relate to and reach older
customers. Findings from psychology reveal that positive emotions play a major role in older people’s lives.
They are drawn towards experiences that create positive affect and remember them better, for example
spending time with grandchildren or traveling the world.8
This in turn helps us understand how to
communicate more effectively with elderly customers. For example, psychologists Laura Carstensen and
Helene Fung have found that older people prefer advertisements that generate positive emotions and tend
to better remember positive pictures, as further explained in Appendix A.9
Instead of trying to reach older
people with fear-based messages or economic appeals, firms and advisors need to introduce, explain and
advertise financial products with an emotional underpinning through positive imagery and language.
With current trends of closing branches and encouraging more online interactions, financial
services providers must carefully consider the impact on older customers. Given the needs of older
customers, it is clear that robo advising and online banking are not viable alternatives. Zero fee models and
fancy technology that appeal to younger customers may lose their appeal as people age. Instead, older
people prefer having a personal relationship with an advisor who can relate to them. Face-to-face
interactions will remain important as ever, and older people may be willing to pay a premium for it.
The Rise of Freelancers and New Services for Them
Freelancers are rapidly on the rise, and are disrupting the status quo of the regular workforce.
According to Forbes, there are currently 53 million freelancers in the U.S. and could increase to over 50%
7
Peters, E. The Aging Consumer: Perspectives from Psychology and Economics. New York: Routledge, 2009. 75-101. Print.
8
Turk, S., et al. “Aging and Emotional Memory: The Forgettable Nature of Negative Images for Older Adults.” Journal of
Experimental Psychology, Vol. 132, No. 2, 2003, pp. 310 – 324.
9
Fung H., Carstensen L. “Sending memorable messages to the old: age differences in preferences and memory for
advertisements.” Journal Pers Soc Psychol. Vol. 85, No. 1, 2003, pp. 163 -78.

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of the U.S. workforce by 2020.10
Of these 53 million freelancers, 17.8 million are full-time. These
professionals are also proving to have real earnings power, as 2.9 million or 20% of full-time freelancers
currently earn over $100,000 annually. Freelance service provider, MBO Partners, further projects that
roughly 3.8 million freelancers will command above a six-figure annual salary by 2020.11
While freelancers
are quickly increasing, very few services cater toward their needs, as they earn variable salaries and have
vastly different needs from full-time employees. For example, a freelancer takes on a project and only gets
paid a lump sum of $20,000 at the end of three months of work. This prevents them from enjoying
corporate benefits such as matching contributions, tax deductions, and insurance. Hence, I firmly believe
that this changing need will create an opportunity for brand new markets to emerge and serve freelancers.
One of the most essential services that will surface is specialized retirement and tax services for
freelancers. It is difficult for freelancers who earn a variable income every month to effectively allocate
savings for retirement and taxes, as they can easily discard the idea and be shortsighted as they do not
have a full-time employer making automatic deductions. Moreover, freelancers have to save even more for
retirement as they do not have employer matching benefits. This menial but crucial task is easily forgotten,
and there is statistical research to show that people typically do not manage their finances well when left
to their own device; in turn failing to plan for retirement or have an emergency fund.12
In light of these
needs, firms will start to offer consulting services to help freelancers effectively manage their financial
planning and taxes and find the optimal allocation for all their financial accounts.
Another service that will surface is affordable healthcare for freelancers. Average health care
premiums cost around $521, and although roughly $432 of the total cost is paid for by employers, this is
not an option for freelancers.13
Thus, freelancers will need more feasible means to obtain health care
insurance. Health insurance firms will start offering new insurance policies and programs for freelancers as
they realize the potential profitability of the addressable market, and consulting firms and benefits brokers
will start increasing their expertise on freelancing insurance to approach freelancers to offer them health
insurance services. New health service models would also emerge. Given that many freelancers who earn
variable salaries may not be able to afford consistent monthly payments, new models could introduce
payments that would better suit freelancers, for example, making payments in installments at suitable
times or right after completing a project.
Future Healthcare Trends and its Implications
Among many uncertainties of the healthcare industry going into the future, there are two
important trends that are showing signs of continuing its trajectory. First, healthcare costs have been
10
Rashid, Brian. “The Rise Of The Freelancer Economy.” Forbes. 26 Jan. 2016.
11
Clifford, Catherine. “The Rise of the 6-Figure Freelancer.” Entrepreneur.com. 13 May 2016.
12
Gabler, Neal. “The Secret Shame of Middle-Class Americans.” The Atlantic. 1 May 2016.
13
Brandeisky, Kara. “7 Dos and Don’ts for Freelancers Buying Health Insurance.” Time. 14 June 2016.

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steadily rising and increased the most this year since 32 years, and it is projected that $1 in every $5 in the
U.S. will be spent on healthcare by 2024.14
Following this, healthcare planning will become a bigger priority
for many and play a larger role in the financial planning process.
Due to these trends, the financial services industry must account for this changing customer need
and increasing importance of healthcare. One of the biggest changes that I foresee through extensive
research is a complete shift towards Health Savings Accounts (HSA), which has already seen yearly growth
over 20% in accounts and assets since 2013.15
Regardless of healthcare reform outcomes, HSAs will likely
increase tremendously in the coming years as it is among the most superior health savings instrument
available. Essentially, HSAs are a triple-tax benefit health savings instrument for people with high
deductible health plans. Capped annual contributions are made pre-tax, and are allowed to grow tax-free
through investments of available asset classes. Savings can then be withdrawn tax-free for qualified
healthcare purchases. HSAs are a huge advantage for people as they effectively reduce the healthcare
spending amount by at least a person’s tax rate. Moreover, account balances are rolled-over to the
following year and are never lost, and people can save and grow that balance each year, tax-free, and build
up a more padded healthcare fund for the future to better prepare against rising healthcare costs.
In addition to healthcare benefits, HSAs could also aid in retirement. Although traditional 401Ks
and IRAs will remain as customers’ primary choice of retirement accounts and plans, the triple-tax benefits
and rollover feature HSAs provide make them ideal supplements, not replacements, to traditional 401Ks
and IRAs, given their much lower contribution limit. The basic strategy is simple. First, max out your annual
HSA contributions before age 65. Second, do not spend your contributions on eligible expenses, rather,
save it and let it grow tax-free while you pay for your expenses out-of-pocket. Finally, here is the catch; in
order to gain access to accumulated funds, receipts of previously eligible expenses should be saved and
used to reimburse yourself at a later date, allowing you to withdraw the total amount of your combined
receipts. All funds, eligible or not, can also be withdrawn after 65 at a taxable rate without a penalty, and
you could take advantage of a lower tax-bracket to liquidate your account. This way, potential gains of
your HSA contributions can be maximized. Although this reduces your disposable income in the short run
by paying out-of pocket, you will reap lucrative benefits in the long run. To demonstrate the effectiveness
of this strategy, using very conservative estimates, you start saving at 40 and contribute only $200 a month
until age 65. Assuming all contributions are reinvested and earn a 5% annual return, you would end up
with over $114,000 in your account. In a best case scenario, you could reap over $1 million.16
Detailed
calculations are shown in Appendix B.
14
Codemo, Robert. “Rising Costs Through 2024 Drives Projected Job Growth.” Future of Healthcare. 1 Jun. 2015.
15
Remjeske, E., Robb, J., Hansen, Lori., “2015 HSA Market Statistics and Trends.” Devenir Research. 17 Feb. 2016.
16
Fontinelle, Amy. “How to Use Your HSA for Retirement.” Investopedia. 16 September 2015.

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Due to the expected proliferation of HSAs, financial services firms must be adept in HSAs and
differentiate themselves by taking proactive measures to recommend HSAs to customers and providing
constructive advice to help customers maneuver the intricacies of HSAs and maximize their benefits.
In light of the recent presidential election, major healthcare reforms may happen in the coming years.
However, we must not be overly fixated on short-term implications and overlook the long-term trends that
are underway. Hence, I strongly believe that regardless of political climate, rising healthcare costs and a
shift towards HSAs are two long-term trends that will continue on its trajectory.
Direction of Regulation in Financial Services
In recent years, the financial services industry has attracted regulation of highest scrutiny across
industries. This highlights the sharply rising risks in the past few years due to disruptive changes in the
industry. Despite this, regulation has always been chasing after the industry at its tail end, and this trend is
likely to continue. Despite an expected decrease in corporate regulation based on recent political changes,
the long-term trajectory of regulation will most likely be upwards, as disruptive technology would outrun
the short-term implications, and regulation will still be playing catch-up.
One of the key areas that would experience increased regulation is customer protection.17
Fiduciary policies - acting in the customer’s best interest and putting them first will be increasingly
enforced to ensure that customers receive the best service and are not taken advantage of by firms.
Already, legislative rules are now being written in order to enforce fiduciary rules upon firms in the future.
Yet another key area rests upon cybersecurity, as it will be paramount in the next decade because there
are high stakes involved in managing customers’ private data. Ferocious cyberattacks of late both within
and outside of the industry have caught the attention of regulators, and regulators will be more stringent
in ensuring that firms have substantial controls and governance, while firms must go one step beyond
regulators by making wise investments in cybersecurity and other initiatives to ensure that they can
withstand cyberattacks from all directions.
As regulation increases, competition among firms will shift towards owning “better regulation
controls.” In 10 years, regulation will not be seen as a cost of business, but rather an investment towards
building a firm’s name a reputation, as the industry operates highly based on “trust,” where one major
cyberattack would cause a firm with a perfect track record to fall to its knees. Specifically for cybersecurity,
firms will differentiate themselves based on the level of cybersecurity they have, and this will be a major
determining factor in decision making for consumers in the future. Perhaps regulators may even assign
regulatory ratings, similar to credit ratings, to rate a firm’s regulatory-worthiness. Thus, regulation will play
a bigger role in a firm’s dealings, and firms must take proactive measures to always have internal controls
17
Gauthier, Vincent. “10 Disruptive trends in wealth management.” Deloitte. 2015

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and security beyond what regulators require in order to differentiate themselves from competitors and
provide a safe and trustworthy customer experience.
Technological Landscape and Environment of Financial Services in 2027
Democratization of Financial Services
We have seen across industries that technology lifts barriers of entry, fuels competition, drives
down prices and overall democratizes the market. Everyone with a computer now has access to the
financial markets. But not only that, everyone with a smartphone can now trade stocks for free using apps
such as RobinHood. Given this exponential growth and innovation, I believe that other financial markets
will soon be widely accessible and also see decreasing transaction costs that will quickly approach zero,
including the bond market, foreign exchange trading, and index funds. With new and easy methods to
invest through robo advisors or cheap managed funds built on index funds, such as British wealth manager
Nutmeg, everyone with a smartphone will be able to participate in the financial markets.
In addition, with new peer-to-peer lending markets developing, online providers are cutting out
traditional banks and credit unions as middlemen, resulting in lower rates for borrowers and higher yields
for lenders. From making personal investments such as purchasing cars, peer-to-peer markets are now
expanding into the property market, risk-capital, and business financing.
Lastly, I also foresee the emergence of new forms of distributions. Over the past few years, many
social media and non-finance tech companies have made first advances into the consumer finance market
by offering money management and payment tools, such as using Facebook and Snapchat to send money
and paying with Google Wallet and Apple Pay. These tech behemoths who already possess a wealth of
information about people’s online and offline lives now also have access to their financial lives. This
provides them with opportunities to further develop money management tools that leverage these
existing data resources. In the coming years, these tech companies may even offer financial services
themselves or partner with well-established players in banking and wealth management.
Regardless of how tech companies will increase their involvement in the financial services industry,
it is clear that technology will democratize the financial services industry by bringing new players into the
market and lowering costs for consumers.
Using Behavioral Profiling to Reach Customers at the Right Time
Insights from consumer psychology and behavioral science can also help financial services firms
understand when people are most likely to get their finances in order and make a financial plan for the
future. Research on habit formation has shown that a major life change, a transition between life stages, or

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a teachable moment provides one of the best opportunities to create new habits.18
In these periods of
change such as leaving college, getting engaged or married, having a kid, death of a parent, college
graduation of children, and so on, our existing behaviors and habits are disrupted. The context of people’s
behavior changes, so old routines are replaced with new habits. This insight allows financial services
companies to increase the effectiveness of marketing campaigns by reaching out to existing and potential
customers at times when they are more likely to get their finances in order by taking up new savings
habits, making investments for the future, and start contributing to a retirement plan. Behavioral profiling
goes hand in hand with big data analytics to reveal further behavioral trends. Together, they allow
companies to boost their marketing efforts and increase their customer base.
Blockchain’s Role in Financial Services
The limitless capabilities of blockchain has captivated Wall Street’s largest institutions. While
enthusiasts often talk about how blockchain could change the world, I believe that blockchain will not
evolve into the backbone of a decentralized platform, where every firm uses the same technology to
communicate. Rather, blockchain usage will proliferate and become a powerful addition to legacy systems
and procedural operations to lower transaction costs, increase efficiency, and greatly disrupt the financial
services industry. In 2027, firms will be well underway in executing partial or full swing changes to their
legacy systems to incorporate blockchain technology to some extent in their operations.
Out of this will come valuable use cases that would disrupt the financial services industry, one of
which are smart contracts. With blockchain, firms can create “programmable contracts that automatically
execute when predefined conditions are met.”19
Traditional financial contracts are simply falling behind
the digital age, as reliance on physical documents result in greater delays, inefficiencies, and risk, while
financial intermediaries lead to increased overhead costs and regulation. Studies confirm that smart
contracts can solve or heavily mitigate these problems by reducing overall risk, administrative and service
costs, and increasing process efficiencies. Customers will benefit from more competitive products and
simpler processes that are hassle-free, contrary to today’s customer experience.
Specifically, smart contracts provide inherent benefits to these three areas - investment banking,
retail banking, and insurance.20
First, smart contracts could reduce lengthy settlement cycles in investment
banking from 20 days to under 10 days. This leads to lower operational costs and additional demand
growth of 5%, resulting in additional income of $2 billion to $7 billion annually. Second, smart contracts
could benefit retail banking through customer savings of $480 to $960 per loan, while banks could save
anywhere from $3 billion to $11 billion annually due to lower processing costs. Finally, smart contracts
could be used to automate claims handling in the insurance market. This reduces processing overhead and
18
Dughigg, C. “The Power of Habit.” Random House. 2012
19
“Smart Contracts in Financial Services.” Capgemini Consulting. 2016.
20
Ibid

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could result in $21 billion of annual savings while lowering insurance premiums as insurers pass fractions
of savings to customers.
Introducing Artificial Intelligence into Financial Decision-Making
In the next few years artificial intelligence (AI) will play a much greater role in people’s financial
lives. AI describes computer systems that are able to perform tasks that require human intelligence - to do
this, the computer is able to learn by itself to make intelligence decisions. This goes several steps further
than predictive analytics, which sifts through data looking for trends and correlations. AI is able to analyze
data in the context of existing knowledge, learn from human feedback, draw its own conclusions, and most
importantly make these insights accessible in simple but meaningful formats.
Apple’s Siri, which is pre-programmed to answer specific questions and queries will no longer be
able to keep up with true AI that actually learns and processes data from the entire web. In less than 10
years, each smartphone will be equipped with an AI that becomes our personal assistant, serving as our
independent advisor and expert.21
It has our best interests at heart and will help us live a better life. The
foundation for these developments is already set given the commercialization of IBM’s Watson, Google’s
Pixel phone, and Amazon’s innovative Alexa voice recognition that truly learns to adapts to people’s voice.
Based on extensive research, I predict that the AI will have access to our bank accounts,
smartphone usage, online interactions, travel planning, and much more. It will not be able to interfere in
any of our decisions, but it will be a silent observer that gets to know our preferences and behavior. This
allows the AI to become our trusted and unbiased advisors, particularly when it comes to financial
decisions. This vision is built on the premise that many people are willing to let an intelligent machine
access their accounts to help them better manage their finances.22
Given the dramatic extent of financial
illiteracy, ever-increasing complexity of financial products and irresistible temptations like credit cards,
many will realize they have more to gain than lose by having a benevolent advisor at their side. Although
there may be privacy concerns, they will probably not deter people from using the AI. Specifically, younger
generations have gotten used to giving up their personal data in exchange for enjoying the benefits of
valuable online services such as social media platforms.
In its primary capacity, the AI will help us make better financial decisions in our daily lives and plan
our financial future. It will analyze how we spend money; it will know we spend too much on expensive
coffee on the way to work and will understand our financial ambitions such as our next travel plan to
Egypt. Additionally, the AI will unlock true behavioral insights by recognizing financial pitfalls. It might
remind us that we will not be able to pay our rent or utility bills later in the month, if we continue our
current spending patterns. It could also warn us in real time that we are going to exceed our overdraft. It
21
Tan, C. “Huawei's Ken Hu says 5G, AI will drive smartphone development.” CNBC News. 27 Oct. 2016.
22
DeMers, Jayson. “Consumers Willing to Trade Privacy for a Price?” Huffington Post. 7 Feb. 2014.

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takes into account installment payments that we have forgotten and makes sure we will not go into debt.
Essential, the AI would compensate for our human flaws including our forgetfulness, short-sightedness,
and impulsiveness.23
Moreover, the AI will get to know us better than most financial advisors ever would, because it
follows our every move. It would also aggregate data on societal trends and spending patterns, and match
these to our behavior to predict what really matters to us. It would provide superior services compared to
financial advisors, who merely guess our ambitions or are too busy to take the time to truly get to know us.
The AI will understand our lifestyle and can help make difficult decisions about our risk profile, investment
goals, and retirement plans. On top of that, it can factor in how likely we are to stick to these plans and
plan for contingencies. For example, the AI may be aware that our current job is in an industry that is
undergoing dramatic changes, and the chance of a layoff is higher. In addition, the AI may recognize that
we are leading an unhealthy lifestyle and need to set money aside for unexpected health care costs.
Conversely, a human advisor may easily overlook such details. Lastly, people may also ask the AI to review
and analyze different financial products to make a pre-selection. A hypothetical question could be “pick
out the top three bank accounts or wealth managers based on reputation, performance, and reviews.” In
sum, AI will revolutionize financial decision making. From budgeting our everyday spending to creating a
financial plan for the future, AI will become our trusted and unbiased advisor.
Conclusion
Over the next 10 years, I firmly believe that the competitive landscape of the financial services
industry will change significantly. Companies that will emerge as industry leaders are those that are
adaptable, invest into research and development, and quick to respond to the evolving needs of key
demographics and opportunities provided by innovative technology. This will be especially true for
companies that have a technology-driven mindset and invest in in-house incubators or venture capital
arms, as these companies will most likely successfully capitalize on latest disruptions. For example, the
retail and online bank Capital One considers itself more of a technology than a banking company, and
recently opened an innovation hub in San Francisco which resembles a tech startup office. Similarly, other
companies that acquire and integrate existing startups will most likely be able to keep up with latest
innovations and perform decently in the next decade. In contrast, companies that are too slow to innovate
and held back by a conservative culture that values the status quo are most likely to be left behind. Change
is imminent, and while some companies will emerge as winners, others will emerge as losers.
23
Koch, Christopher. How to Make Better, Bias-Free Decisions with Artificial Intelligence. Forbes. 24 Aug 2016

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Attachments
Appendix A: Tapping into positive emotions with older people
Psychologists Laura Carstensen and Helene Fung found that in comparison to a younger audience,
older people showed a clear preference for emotional advertisements that rely on positive affect. Their
research revealed that older people preferred emotional airline slogans such as “Take flight…your loved
ones await” as compared to a more knowledge-based appeal “Take flight…expand your horizons”. The
majority of older participants (59%) preferred the emotional message while only 10% preferred the
knowledge-based message - the other 31% were ambivalent. In comparison, only 24% of the younger
audience preferred the emotional message. In the first condition, older people also demonstrated a better
memory for both the slogan and airline brand.24
Appendix B: Using your HSA to supplement retirement savings
To use your Health Savings Account (HSA) effectively for retirement, the basic strategy is simple.
First, max out your annual HSA contributions before age 65. Second, do not spend your contributions on
eligible expenses, rather, save it and let it grow tax-free while you pay for your expenses out-of-pocket.
Finally, here is the catch; in order to gain access to accumulated funds, receipts of previously eligible
expenses should be saved and used to reimburse yourself at a later date, allowing you to withdraw the
total amount of your combined receipts. All funds, eligible or not, can also be withdrawn after 65 at a
taxable rate without a penalty, and you could take advantage of a lower tax-bracket to liquidate your
account. This way, potential gains of your HSA contributions can be maximized. Although this reduces your
disposable income in the short run by paying out-of pocket, you will reap lucrative benefits in the long run.
To demonstrate in more detail the effectiveness of this strategy, consider a best-case scenario
where you start saving at 21 and make maximum contributions until age 65. Assuming you reinvest all your
contributions into the stock market, earning an average annual return of 8%, you would end up with
almost $1.3 million in your account. Using more conservative estimates, you start saving at 40 and
contribute only $200 a month until age 65. Assuming you reinvest all your contributions into the stock
market, earning an average annual return of 5%, you would still end up with $114,000 in your account.25
Detailed calculations can be seen below.
24
Fung H., Carstensen L. “Sending memorable messages to the old: age differences in preferences and memory for
advertisements.” Journal Pers Soc Psychol. Vol. 85, No. 1, 2003, pp. 163 -78.
25
Fontinelle, Amy. “How to Use Your HSA for Retirement.” Investopedia. 16 September 2015.

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Detailed calculations are tabulated below:
(Exhibit 1: Best Case)
(Exhibit 2: Conservative Case)
Assumptions (Best case)
Years Annual Return Annual contribution
45 8% 3350
Year 1 2 3 4 5 6 7 8 9 10
HSA Bal. 3,350.00 6,968.00 10,875.44 15,095.48 19,653.11 24,575.36 29,891.39 35,632.70 41,833.32 48,529.98
Year 11 12 13 14 15 16 17 18 19 20
HSA Bal. 55,762.38 63,573.37 72,009.24 81,119.98 90,959.58 101,586.35 113,063.26 125,458.32 138,844.98 153,302.58
Year 21 22 23 24 25 26 27 28 29 30
HSA Bal. 168,916.79 185,780.13 203,992.54 223,661.94 244,904.90 267,847.29 292,625.07 319,385.08 348,285.89 379,498.76
Year 31 32 33 34 35 36 37 38 39 40
HSA Bal. 413,208.66 449,615.35 488,934.58 531,399.34 577,261.29 626,792.20 680,285.57 738,058.42 800,453.09 867,839.34
Year 41 42 43 44 45
HSA Bal. 940,616.48 1,019,215.80 1,104,103.07 1,195,781.31 1,294,793.82
Assumptions (Conservative)
Years Annual Return Annual contribution
25 5% 2400
Year 1 2 3 4 5 6 7 8 9 10
HSA Bal. 2,400.00 4,920.00 7,566.00 10,344.30 13,261.52 16,324.59 19,540.82 22,917.86 26,463.75 30,186.94
Year 11 12 13 14 15 16 17 18 19 20
HSA Bal. 34,096.29 38,201.10 42,511.16 47,036.72 51,788.55 56,777.98 62,016.88 67,517.72 73,293.61 79,358.29
Year 21 22 23 24 25
HSA Bal. 85,726.20 92,412.51 99,433.14 106,804.80 114,545.04

14. DST Robert L. Gould Scholastic Award 2016-2017
13
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