The myth of “homo economicus”

Customer centricity The myth of “homo economicus”

Published on 27.08.2021 by Biljana Mladenovic, Data Scientist at PostFinance

Investment guru Warren Buffet once said “Risk comes from not knowing what you’re doing”. But are we prepared for the financial risks and challenges that go hand in hand with the Covid crisis?

“Homo sapiens vs. homo economicus”: a thought experiment

Many people find it difficult to optimize their personal finances. We need certain skills to help us make the right financial decisions. We should all have the necessary financial literacy.

So can we become like the homo economicus described by Nobel Prize winner Richard Thaler as having the ability to “think like Albert Einstein, store as much memory as IBM’s Big Blue, and exercise the will power of Mahatma Gandhi”?

Neuroscience shows that our brains are made up of two hemispheres – the rational and the emotional. The rational half of our brain takes longer to engage. It is the emotional side that filters and validates our decisions first. Behavioural economists have established that our biological nature is reflected by our behaviour. Our decisions are more likely to follow general “rule-of-thumb” approaches or heuristics. We are not homo economicus, but homo sapiens, with selective perception. We follow the herd and are full of emotions.

The path to empowerment

Abraham Maslow, the father of modern management psychology, showed us the path to change. To change a type of behaviour, we need to move forward from our own unconscious incompetence (we don’t know what we don’t know) to conscious incompetence (we start to know what we know), and ultimately to conscious competence (we know what we know and act accordingly). This is a life-long process. The same applies to financial expertise: we must constantly improve our knowledge and behaviour.

The role of banks

Banks can play an important role in this process. Customers learn best when faced with learning moments (buying a house, founding a company, paying taxes) and when they are able to use financial products to apply what they have learned.

This is why we at PostFinance created the Felix prototype. It is intended to help our younger customers on the path to financial literacy. The solution is completely data-driven and based on the smart methods of artificial intelligence.

Figure 1, B. Mladenovic

It focuses on a customer’s own financial literacy, calculated via self-assessment. Customer behaviour (determined from existing customer, transaction and product usage data) is added to the result.

Several aspects are taken into account, including how well customers use their products and handle their cash management, as well as how wisely they save and invest their money. The gamification approach allows customers to acquire new financial knowledge in a playful way. With specific recommendations and peer-to-peer comparisons, Felix empowers the customer to make financial decisions and to change their less than optimum habits. They can also obtain financial advice from a chatbot advisor. Positive behaviour is praised. Figure 2 displays the Felix dashboard.

Figure 2, B. Mladenovic


To optimize our finances, we should ideally have the financial skills of “homo economicus”. As homo sapiens, however, we need strategies to make up for our shortcomings. This is where banks can play an important role.

There is currently no player on the Swiss market that provides a comprehensive solution to help people to develop their financial knowledge throughout their life. A solution like Felix and the options provided by artificial intelligence are perfect aids for financial literacy. It should be noted that artificial intelligence must be used judiciously and in compliance with ethical data standards. It is important to remember that banking data is sensitive data.


Due to the current situation, Connecta Bern will again be held as a digital event in 2021. Connecta is renowned for shining a light on the diverse nature of digitization and this year will be no different with content presented across the three formats of Connecta Blog, Connecta TV and Connecta Talk. Find out more here:


  • Source: Nudge: Improving Decisions About Health, Wealth, and Happiness, Richard H. Thaler, Cass R. Sunstein (2008)
  • Source: The International Journal of Coaching in Organizations, The Emotional Intelligence of Money: A Case for Financial Coaching, Brenda Smith (2009)
  • Source: The International Journal of Coaching in Organizations, The Emotional Intelligence of Money: A Case for Financial Coaching, Brenda Smith (2009)
  • Source: e.Foresight, & Lucerne University of Applied Sciences and Arts, HSLU / Institute of Financial Services Zug

Biljana Mladenovic

Data Scientist at PostFinance and PhD Student at the Human-IST Institute of the University of Fribourg

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