AI and the Future of Intentional Banking with Shane Walker

Hello and welcome to Financial Behavior Thought Leaders. I'm Mary, and this podcast takes you behind the scenes with top speakers in financial services. In season two, we're focusing on financial conversations, how trust, communication, and decision making are evolving, and what that means for the way we engage with money and work in our lives. So whether you're in financial services, you're planning events, or you're just simply navigating your own financial decisions, you're in the right place. Be sure and subscribe so you don't miss a conversation.

Today I'm really excited to talk about the future of banking. The banking industry was built around automations and swipes. But what if we redesigned it around how people actually think about their money? And to explore this, I'm joined by Shane Walker. He's the CEO and found co-founder and CEO of Qube Money. He spent 18 years coaching people about money and has identified something critical. The financial system we use every day is designed to work against our intentional behavior.

So instead of accepting that, he's asking, what if we rebuilt banking from the ground up using behavioral finance? We're excited to dive into some concepts here on how behavioral finance affects how we organize our money and really how the banking industry is going about it and how we can do something more intentional with our spending. Shane, thanks for joining me.

Mary, it's great to be here with you. Excited about this conversation, really. Yeah.

Well, me too. And I love, I want to start off with where you've been because you've spent almost two decades coaching people about money. And I want to hear what made you at some point in time step back and think, we've got a problem. The system is broken and it's working against us. Tell us about what that was like for you.

Yeah, so I built a a lead generation system that brought in thousands of people to my firm a year. And so we we had large volumes of people coming in. And over and over I saw that really the fundamental issue that was affecting them all was the way they spent. And

That was really interesting. So most of these people made between a hundred and two hundred thousand dollars a year, yet they completely felt broke. And you and I both know how that affects their self-esteem, how that affects their relationships. And so, anyways, you could just see this kind of dark cloud over them. And it all really was traced back to the way that they handled money.

And so, anyways, that that really got me thinking. I I'll also tell you that it was super interesting to help them engage with traditional budgeting apps. And over and over, it didn't work. In fact, oftentimes it made the situation worse. but then there was something that kind of like really like brought a lot of light and clarity, and that was.

Whenever they used cash envelope budgeting, it would change their behavior and change their confidence and feeling about money almost instantly. they wouldn't follow it long term because it was there was so much friction involved, but it would change them. So it really got me thinking about okay, what is going on with the way we bank, with the way we handle money in our modern society that's causing so much frustration?

Yeah.

And disconnect with money. So

Well, and I wanna jump in here. So anybody that doesn't know what cash envelope spending is, essentially you it's the old school way. You take money out of a bank account, you divide it up into many different envelopes, and then you spend whatever is labeled on the front of that envelope, you pay for it with cash. Great in theory.

horrible in practice, like so hard to keep up. And if anybody if anybody's listening to this and still doing it, my hat's off to you. You figured it out. But for the the 99 other percent of us who just cannot get our hands around that and keep that, especially as we move to a cashless society, right? Like there's so many places now that won't even accept it. That that again, it's great in a theory. And so what I want to dig in though is you've taken that

In today's world.

concept, that theoretical side, and you've really changed the game of seeing things. I always called it you're spending in the right that rear view mirror, right? And I think that's what you're saying. A lot of apps, even your credit cards or bank accounts or whatever, is always telling you what you did spend. So you're always looking behind you to see what you spent. Cube money is different and you've helped change that. So what did you build and how did it change the game?

That's correct. Yeah.

Yeah. Mary, let's really qu dive in first of all the problems that that causes. If you think about always looking back, it is reflectory, it's reflecting. And the most common emotion is guilt and regret. And that's why the budgeting apps oftentimes cause more issues than they solve. Now, if you're already good with money and you just want something to kind of keep you organized, to kind of

true.

Have a basic idea of where your money is going, it's great. And you know, people that are that way, they like budgeting apps. But for again, the 90% of people that aren't those people, they don't, they don't really change, right? And so actually, there's as I've delved into this, it's super interesting. I've realized that there's a massive gap. And I want to kind of share this right now. That is our monetary system is beautifully aligned.

With the way we behave as humans. We're very emotional, we're very automatic. Most of our decisions are made instinctively. Okay. And when we like you think about the way we spend, the way money works, it's literally a swipe and go. And that package is on our doorstep same day, next day. And it's like, that felt so good. I got exactly what I want.

True.

and so the emotional framework really encourages us to buy more, buy more, because it reinforces the that emotional high that we all enjoy. On the flip side, if we look at the personal financial tools, they connect into our conscious part of our mind that's very logical.

It's analytical, which is an important part of our very being. But those that information is good for decision making making, but not behavior. And what I mean by that, if it, like for example, you and I are both business owners and data, we're always talking about making data-driven decisions. Super important. But those decisions made at the executive level.

don't change anything about our business until we create process processes and systemize them within our routines, within our employees' routines. And then it becomes automatic, emotional, and subconscious. And so then the decisions we make actually get applied. And so what we've got here is we've got a monetary system that is subconscious, automatic emotional, and we have the personal financial tools

That are conscious, analytical, and logical. And there's this gap that has not been crossed. And so consequently, we have just as many people, more people struggling paycheck to paycheck, like just burdened with debt, frustrated with their not achieving their dreams. And it's this gap. And the interesting thing about it is, it is the motivation of the big businesses.

and the big financial companies to keep it this way because more swipes means more profits. They want us spending money because actually they're greedy. They want our money. So it's kind of interesting how we absolutely that's correct.

They're making money on the transaction. They're making money on the split spread. Yep. Every time. Yep. So I want to dig in then. What have you created? How have you created a system that changes that?

Yeah. So that's that is so if you go back to what you shared about the Ken cash envelope method, you're labeling money and then you're engaging with that money at the point of sale, in the moment you're making the decision to purchase. And that creates an the emotional framework that guides healthy decisions. And let me explain. So when I label money.

I can say, this is for my rent, but this is for fun. This is for things that I want to do personally. And I've got designated, let's say, $150 for that. And so that creates permission for me to have fun, to do things that I want to do. And now when I go and I see that that $150 are available.

And I'm getting ready to buy an ice cream cone from McDonald's. And I see the money leave that that label, and I see what's left for opportunities in the future. And I enjoy that ice cream cone within that experience. It says I did exactly with my money what I wanted to do with it. And that creates this feeling of control and of confidence and well being.

That's actually beautiful that we've lost with the existing monetary system. And that experience is so simple yet so profound. And through thousands and thousands and thousands of customers and clients making this simple transition of labeling their money.

And then engaging with their money at the moment of sell of spend of the of transaction, they're like, I can't believe, Shane, how this has changed my feelings about money. And so that's the magic, Mary. It's nothing profound, but yet it is. It's so simple and so profound, and anybody can utilize this concept to change their experience with money.

So I want to maybe label this in two different realms. one is I think let's put on our behavioral finance hat and talk about what you've already said. You just described in some ways Daniel Kahneman's thinking fast and slow. The quick part of our brain, the slow part of our brain, the more logical side. And yet the other part of that it that we're really honing in on is something that we call in behavioral finance mental accounting. And in mental accounting, often we think, we know what's in that account, or I already know, and that trans.

transactional side when in reality when they've done studies on this, they find out those things do not match. Like the math does not work out here. The other part that you're seeing though is I think there's a a negative side on the middle accounting that says

We never have enough, right? Like there's always kind of that squirrel going, I've got to get more, I've got to get more. Why did you spend on that ice cream cone when we could have saved it for something else or we needed it for this? Then you have another partner who's looking at it frivolously and saying, we can spend everything. And those two things, when working within the same household, starts to cause friction, especially if you're using the same bucket or system.

And it's not being labeled for purpose. And so the other part of this that I'm seeing is so powerful is the fact that you're using mental accounting for good. And it simply is labeling your money. We go back to the cash envelopes that we said earlier. You simply put a name and then you spend freely within whatever that system has created. Is that how you would describe? Tell me some more thoughts around how does that work?

Yeah, that's exactly right. I I I want to delve into what you just said about couples that's really interesting, Mary. And that is we have all of us have different belief systems and yeah, really belief systems around money and value systems. And some of us are like, I want to save everything so that I have security for the future. Where in actuality, money is designed to

Build a lifestyle not just for tomorrow, but for today. And so what's better? Save everything for security tomorrow and really sacrifice today or enjoy today and worry about tomorrow. We have both.

Okay, great. That that's great. So, anyways, and so the neither is right or wrong. And what it when you label your money, it gives the person who is the sacrifice today, security tomorrow, permission to spend money because in actuality it feels good to have enjoyment today, right? And then for the person that is more frivolous and like, let's love life now.

And worry about tomorrow later, it creates this. I can have a framework that I can enjoy today and still ensure my security for tomorrow, which creates greater peace and well-being because they know that tomorrow is taken care of. And in a couple situations, when you have those dynamics, it blends them together and creates harmony. the other thing that I think is super interesting.

When we talk about mental accounting, is in most scenarios when we talk about couples, one member of that couple is the money person, and the other is generally pretty oblivious to money. And in that dynamic, the one that is in charge of the money is either telling the other person no, like they shouldn't be spending, or

The person that is oblivious is always asking for permission. And in that scenario, it creates resentment. And that cycle of resentment just plays itself over and over and over, creating a lot of friction and unhappiness, really. And so having this again, mentally counting, this labeling where both partners can see the plan, both partners are empowered to spend from the plan.

It creates a cohesiveness and also a working together towards creating the lifestyle that that collectively they they want together that's so, so powerful. And when you look at our existing monetary system, for most people, the majority of their money is lumped into one account. And it's coming in that account and out of that account automatically.

That that person is trying to mentally account for what they need their money to accomplish. And they generally are using a credit card or several credit cards. So it's almost impossible to do. So they're continually struggling, stressing about do I have money for this or that? And also asking the question, where's all my money going? This idea like you just spoke about that.

There's never enough. And that's not a fun place to be in. So that's what we're dealing with. And when you start to compartmentalize or label your money, it then creates, actually, there is enough. We're saving this for the future. We've got this tagged for our our bills, rent, utilities, all so forth. And we still have money left over to have fun and to.

Do the things that we want to do. And that creates this like clear awareness that I'm okay. And I'm going to create the best case scenario with the situation that I am. And I can I can enjoy that. So

Absolutely. Well, and I think here too. So you're you're looking at this from a couple's perspective. And so often in the world of financial planning, it's we should people. We tell them what they should be doing or how to change. And what I love that you're talking about is you're saying, Hey, no, no, no, no. This isn't about changing you. This is about like redesigning.

How you think about it and really make the system work for you instead of that constant push against the system to work more innately, of looking in front of you, not always reacting to whatever's happened in the past, which that's where the blame, the shame, the guilt, all of those negative feelings come from is money's been spent. And you're just saying, flip the coin on that.

Yes.

And start to see it in a new light, in a new vision, in a new way.

That's right. Mary, that's exactly right. And it comes down to being able to compartmentalize the money and then look at that that look at the the label as you spend and it changes everything.

Yeah. I think you're known for this, right? [...], money on purpose, intentional spending. That whole focus is money is there to spend. That is the purpose of it. It's just making sure that it's being spent according to your value system and how you want that to be seen, not it driving you or being reactive. It's the putting you in the front of the driver's seat really and being more proactive with it.

That's right. That's right.

Man, that stirs my soul. That's exactly right, Mary. That's exactly right. And when we align our money with our values and goals, it's amazing what happens to our lives. Because money is oftentimes the driving force between what we do day day. So

Yeah. Yeah. So Shane, you've one thing I want to hit on here is the industry itself. And let's go into the banking industry specifically. Okay. We're seeing a rapid change with AI and so many features on the financial planning side. Tell us what's happening in banking and how that is changing for better and worse of what's happening within that industry.

Yeah. man, I the the worst side, I I actually like I'm not gonna really go into that because it's more fraud stuff, right? People are able to really tap into our identities and so forth. And that's that's a really big struggle. But we have just as much AI on the other side protecting people and protecting our identity, which is which is really good. But what what I love about things that AI are AI is

enabling us to do is there's several friction points in this this concept of giving your money purpose. And the first is defining like what you want your money, how you want to label your money. Lots of people, it's interesting when I ask clients, so, you know, where do you spend my your money? They often hee and ha and fidget nervously because

They don't know. And the truth is, is you have to get in the know first. And it's amazing how AI can do that in literally seconds for you. Let's say minutes. But just by by linking your existing accounts, it can go and look at your transaction history and pull out all of your bills, when they're due, how much they are, and create this framework of, okay. So

Here's what I'm spending on a monthly basis on a recurring basis. And I need to make sure that I'm accounting for that. And maybe there's subscriptions and things that I'm not using that I should be getting rid of. Right. And so that's a really nice part of AI. But in addition to that, AI can say, hey, where are you from? Like, what is your household situation? What how do you get around? And what is your income?

And then also link in your debt account so that it can kind of look at your debt and it can come out with a really like robust plan that says, hey, here's how much you you need on average for a household like yours to spend on groceries. Here's a great starting point. Here's a great starting point for the transportation costs. And that leaves this amount of money for fun. And you're still going to be able to work towards this dream that you really want to accomplish.

Also put money away for emergencies, because those always come up, and to get out of debt or save for the future. And then it can then project and say, hey, if you follow this plan, guess what? You and your family are going to be able to go to Disneyland in 23 months. And you're going to have an emergency fund fully funded to take care of any emergencies. So you can have that peace of mind in 10 months.

Sure.

And you're gonna be debt free in three years. And that creates this direct correlation with my current behavior and how it's reflects in my long-term well-being, which connects money to purpose. And that's a beautiful thing, Mary.

Yeah. Well, and so there's two concepts I want to hit on here is I think many of us have c separated AI from our banking, right? And there's a fear there that as much as we let AI into our lives, even personally, how much that's going to expose us. And with money being such a taboo topic that people are fearful of having AI do these kinds of scenarios. So are you actually seeing AI

in banking institutions? Like are you seeing that as the future of where we're going with banking or what does that look like to you in the next five to ten years?

I I think that in the financial technology world, I absolutely see AI in that. And there's a way to utilize AI in a way that's very, in my opinion, very safe and also, yeah, I guess very safe and very that coordinates with the way people want to utilize it. And what I mean by that is is.

I don't think it's a good idea to have AI running your life and just because there is something to say about human intelligence and emotions and the AI just doesn't it it doesn't have the capability to to replicate. And so in my opinion, safe I AI is going to provide tactical, I guess actionable.

steps, recommendations that that are easy to act on. That's that that's really what it should do based on data. That's exactly right. Exactly. So what I'm saying is is when it when it recommends the plan, the tool should allow you to manipulate that it provides that that that plan and the results of what that plan will do. But then it says, how does this look? Feel free to to

Based on data, right? Based on your past history and all the rest.

change anything you would like before this it plan is implemented. And then as it goes through and like helps you organize and make decisions, it provides based on data, hey, have you thought about this? If that makes sense to you, click here to act. And it just implements those those suggestions based on the user's confirmation, right? The user's permission. And if it does it that way,

then it's providing the the information based on really important data that it's hard for us as end as as human beings, a lot of work to gather. It does that for us. And so that we can just then make the decisions based on good data.

So I see on the other side of this coin, like for consumers or for everyday people, that sounds great because I'll have more information. Now, those of us that are financial planners in this room also go, Wait, did you just say AI is going to be taking over what I've been providing for the last 30 years of my career? How do you see financial planners and financial services in general helping guide people t in the next few years? How is that differentiated?

given the tools that are capable now with AI.

Yeah, that's a great question, Mary. So if we if we look at atomic habits with James Clare, real behavior change is identity change. And if you want to change your identity, there's four fundamental principles or fundamental, I guess.

Objectives that have to be met. And the first one is you have to decide that you want to have financial health, that that's who you are as a person. And that decision has then to be proven to yourself through your daily actions. Okay. You by repeating, like proving to yourself, for example, if I want to be a runner, well, if you asked me if I was a runner, Mary, I'd tell you.

No, I hate running. but if I bought if I bought running shoes and I started running every day, in a month from now, you say, Are you a runner? I'd say, Yeah, I'm getting into it. If I continue to run and I got a watch that tracked my my miles and all this stuff, in a year from now, if you ask me if I'm a runner, I'd say, yes, I am. Why? Because I have I have done the activities to prove to myself

That that's who I am. Does that make sense? And that that very like if you look at what is required to make that happen, it requires first of all you making the decision, the I the defining that that's who you want to be. But then it requires you to most of the time to have a community of people around you that are doing the same thing. And a coach, an advisor, a counselor is critical in.

that framework, that accountability framework, right? And then you have to have a system that makes it easy to prove it to yourself. So there's three different things: identity, community, system. And so the system isn't replacing the helping the person create that identity and the community that that person needs to surround themselves with. You know what I mean? So it it actually just enhances

AI tools and these systems can enhance the ability for coaches, counselors, advisors to impact more people quicker and with more success. Because really, when you use the right systems, it empowers that person to take ownership, which is ultimately what you're trying to help them do as a counselor, coach, advisor.

Yeah, no, I love that. And actually, I think that's a perfect parting thought is this isn't taking away from what you're doing. This is enhancing. And it's letting you be that coach, planner, counselor, whatever that label is. Do it at an even higher calling where you're not having to spend your time doing the minutiae, but you're actually getting to really connect at a deeper level with the client in the long run. Thank you so much, Shane.

If there's one idea that you wanted to take with you, I think it's this is you matter as a financial planner, financial coach, financial counselor. And that ability to connect and help people and connect with their money is so vital. On the opposite side, as a person who spends and an individual who consumes.

I think that the other part is labeling and how mental accounting is really reshaping banking and and how we think about it. So if you'd like to hear more about how banking is reshaping and what's happening at QubeMoney, you can find more about Shane at cubemoney.com. And if this episode landed with you, we'd love you to subscribe, share it. And that's how we move the needle to help more people talk about money. Thanks for joining us on Financial Behavior Thought Leaders, and we'll see you next time.