Behavioral Economics in Software Design

We're redesigning LoanBoss this year and we're borrowing inspiration from an unexpected source: Daniel Kahneman's, Thinking, Fast and Slow.  It is my favorite book of all time.  If I had a higher IQ, behavioral economics is how I would spend my time.  

In his book, Kahneman describes two modes of thinking:

• System 1 (Fast): Quick, automatic, and intuitive. It's effortless, guiding us through everyday tasks like recognizing faces or reading short sentences.
• System 2 (Slow): Deliberate, analytical, and methodical. It kicks in when we're solving complex problems or making thoughtful decisions.

It hit us that our software users also fall naturally into these two distinct mindsets:

• Consume Mode: Users who jump into the software to quickly retrieve critical information. They're driven by System 1—quick, intuitive, get-in-and-get-out thinking.
• Manipulate Mode: Users who come to deeply explore data, build workflows, and analyze complex scenarios. These users engage their System 2—deliberate, thoughtful, analytical exploration.

This realization reshaped how we're designing our interface:

• For Consume Mode (System 1): We're emphasizing speed, clarity, and simplicity. Essential data appears upfront with minimal friction, and we hide deeper complexity until explicitly requested.
• For Manipulate Mode (System 2): We're providing more powerful tools, customizable analysis, and flexible interfaces. This mode embraces complexity, enabling thoughtful workflows and deeper data engagement.

Our goal? To seamlessly identify user intent right from the start and channel them down the optimal path—whether fast and intuitive or deliberate and analytical.

As you start building software, it’s natural to think about what it needs to do for different personas.  The C-Suite has a different use case than the Analyst.  Acquisitions is different than Accounting.  

But it turns out it’s even more complex than that…each persona then also has a specific purpose each time they log in.  Quick consumption (“What’s my prepay?”) vs complex manipulation (“we need to do next year’s budget”).  It’s hard to build workflows that account for both personas as well intent.

System 1 or System 2?  None of us think about which to use consciously, it just happens automatically.  Use technology that does that just as automatically. 

The book is a doozy, but it’s spectacular.  Perfect for summer vacation!