A NEW WAY TO INVEST IN STRUCTURED SETTLEMENTS
In late 2017, the famous structured settlement company J.G Wentworth filed for bankruptcy for the second time. This is the story of how I build a new crowdfunding platform to invest and sell structured settlements.
THE BRIEF
This project was partnered up with GRID110 to help their client Amber build out a crowdfunding prototype that can be used to be pitched out to investors.
Amber is an upcoming fin-tech company designed to create a marketplace for people seeking a passive income to purchase payment streams from plaintiffs who have settled their cases in court. Settlers with guaranteed, no-risk fixed-income can sell pieces of their payment streams to accredited investors on a digital crowdfunding platform.
MY ROLE
I was part of a small pitch team that was responsible for the experience strategy and design for creating the crowdfunding platform prototype. I lead the design and research, producing all major deliverables from branding to the actual prototype that was pitch in August 2018. I worked alongside a product manager and another designer.
THE CHALLENGEBUILD A CROWDFUNDING PLATFORM IN A MONTH
Our client approached us in July 2018 with a new concept idea about building a new crowdfunding platform that focuses on structured settlements. The objective was simple, have a prototype ready within a month. The pressure however was that many of us did not understand what is a structured settlement and how does it work in a crowdfunding space. In addition, what is the legality aspect of it? There was a lot of uncertainty that needed to be defined and understood in order to build an experience that’s right for the potential user.
THE APPROACHFOCUS ON UNDERSTANDING THE TASK
In order for our team to successfully create a meaningful product, we had to collaboratively understand the concept before we proceed with user research and design. As the product lead on this project, we had to understand the following and have a strategy.
STRUCTURED SETTLEMENT
Our team had to understand what structured settlements were. We found that structured settlements are periodic payments made to a plaintiff who wins or settles a personal injury lawsuit. Instead of receiving a lump sum of money for damages, the injured party can receive a series of payments made over time. Plaintiffs who typically received a structured settlement is because they are deemed unfit to get a lump sum payment.
CROWDFUNDING
As a team, we understand that crowdfunding is a practice in which a large number of people can all invest or fund a project or venture within a marketplace. We had to understand how this model would work when it comes to structure settlements.
COLLABORATIVE EFFORT
Meeting with the stakeholder twice a week helps us understand the business model and the strategy for the platform. This allows us to make sure we address any new edge cases that may occur during the discovery process.
FOCUS ON LEAN UX
As a team, we focus on a lean approach which emphasize on rapid sketching, prototyping, user feedback, and design mockups. This help get early alignment with stakeholder and get more concrete ideas.
THE RESEARCHDEFINING THE MARKET
In the research phase, we focus our effort to understand the industry that our client is getting into. We focus on the competitive landscape and understanding how our client vision will look like in this industry. Since structured settlement is a relatively old and profitable industry, we had to look into indirect and direct competitors from the structured settlement and the crowdfunding industry.
Here is a list of competitors we looked into:
FINDING THE USER
Based on our discussion with the client, we knew there would be two types of persona archetypes. One would be someone who invests and the other would be the one willing to sell. We knew that finding investors would be easier to find. The biggest hurdle would be finding plaintiffs dealing with structured settlements to interview and survey. This was a critical area to understand because the plaintiff structure settlements create the marketplace for the investor to invest in. Therefore, I had to think outside of the box to find our potential users.
METHOD 1: FIELD RESEARCH
Surveying a family who just got out of a case @Stanley Mosk Courthouse
Surveying Uber drivers in the DTLA area who around the courthouse.
METHOD 2: REACH OUT TO PERSONAL LAWYER CLIENTS VIA YELP
FINDING PLAINTIFFS
Reaching out to plaintiffs who won their cases and ask them to fill out a survey or interview.
METHOD 3: SURVEY AND INTERVIEWS
This method took the most time and effort to accumulate enough quantitative and qualitative data, but luckily we manage to make it work during our short timeline.
THE DISCOVERYORGANIZING OUR FINDINGS
In the discovery phase, we wanted our research to reveal who our personas type would be and define our strategy in making this crowdfunding platform come to life. We begin synthesizing our findings and came up with the following:
COMPETITIVE AND COMPARATIVE ANALYSIS FINDINGS
JG Wentworth is the main direct competitor that shares the same business model as Amber, however, it is not a crowdfunding platform.
LexShare is the direct and indirect competitor to Amber in which it focuses its crowdfunding on commercial cases, but not structure settlements.
AMBER’s goal is to be the J.G Wentworth of structure settlements in the crowdfunding space.
SURVEY RESULTS
From our survey of 10 questions, two of the results revealed some key elements that our client did not know.
To full solidify our research and understanding the market, I did additional research in finding more results online. My research led to the following:
According to the recent study by Ringler Radio, the structured settlement industry is valued at $162 billion dollar industry from 1975 - 2017.
More than $160 billion per year of United States tort costs have represented payments to injury victims since 2006 according to S2KM.
AIG survey, 65% of the people said they would rather have a lump sum payment instead of structured payments.
INTERVIEW RESULTS
From our gathered surveys, we were successful in gathering prospective users to interview and obtained qualitative data from plaintiffs and investors. This was very beneficial for our team as it helped us understand the user needs and pain points on a deeper level. Here are some key quotes that we found during our process:
PLAINTIFF
“I wasn’t truly pleased with my settlement, but if I wanted to receive more money I would’ve had to wait, and I needed money faster to pay the bills.”
- Miguel
INVESTOR
“ I expect to see some sort of guarantee to safeguard my investment. I want to have the security knowing my money is safe.”
- Trevor
From our gathered interviews and surveys, we conducted an affinity map to pinpoint areas of emphasis that we should address when it comes to our design process. We identified the two types of users that would be using this platform.
SECONDARY USER: SELLER
PRIMARY USER: INVESTOR
Recurring users willing to invest in long term investments and is looking to spread out their portfolio investment. They are goal oriented and has a sizeable invesment fund range.
Single user, looking to sell their settlement and earn their lump sum payment quicker. Seller are looking to pay off their debt from the injuries that were incurred prior to the settlement.
THE INTRODUCTIONTHE PEOPLE WE ARE BUILDING FOR
From our research, we gather enough data to create a persona type that aligns with the strategy our client wants. This persona will help guide our design decisions and priorities, and create empathy amongst the client and the team.
THE INVESTOR
THE SELLER
THE VISIONINVEST IN SETTLEMENTS BY AMBER
Our personas helped us understand that plaintiffs that win settlements often wait lengthy period of time to access their funds. Plaintiffs want faster access to the funds while Investors want to find a safe and minimal-risk investment option for their income streams.
Since J.G Wentworth is the primary competitor, their business model stream require that they buy out plaintiff settlements at a lower cost and wait to get their return on investment ranging from 5 - 30 year periods. This model drawback however requires that J.G Wentworth has to take a loan to buy these settlements and pay back the difference on a yearly basis. Hence why they had to filed for bankruptcy again.
By providing a crowdfunding platform, plaintiffs will be able to sell their low-risk settlements to multiple investors and get and early stream of cash flow. While investors can review vital information about the settlement before choosing to join. They will earn the profit difference in a later future.
DESIGN STUDIO
THE REQUIREMENTDESIGNING ENGAGING EXPERIENCES
Synthesizing the goals from our research and knowing who exactly we are designing for allow me to see how the platform would fit in the lives of the user. I had to put into the mindset of how our personas would think and behave rather than focus on specific interfaces. By keeping it in that type of scenario allow our team to zone in on the emotional goals vs getting too specific on interfaces and business goals.
THE FRAMEWORKBUILDING A PATH IN MIND
The first round in the design studio was to define how our persona would navigate through the site. We took many inspiration from our competitors to create a list of context they expect the navigation should have. We wanted to test early, therefore we conducted an open and closed card sorting to test scenarios amongst potential users. This was an important process as we want the user to navigate the site correctly and meet business goals.
STRUCTURING THE EXPERIENCE
Now that we have a solid site navigation, the next step to the design process is to understand our personas would navigate through the site with ease. I created a user flow for both seller(plaintiffs) and investors to helped guide us through the the design process of creating our screens.
THE DESIGN STUDIOBUILDING A BRAND EXPERIENCE
We wanted Amber to have a platform that develops a clear vision and expectation to the user. We developed a set principles that define who they are. These principles help articulate the core values and the expectation that should be upload for both the user and the brand. The principles were used to constantly drive the aesthetic and feel of the overall direction of the app.
THE DESIGN WELCOME TO AMBER
The gallery below is the final screens that we provided to our client. We made sure we got it right by testing early from lo-fi sketches and down to the final designs you see below.
THE RECAPLOOKING FOR THE NEXT STEP
After successfully creating the prototype for our client, Amber was able to get their first investor. Unfortunately, since Amber is waiting on more investors to build a team for this product, we would have to wait to see where this product would go. If it was successful, I would like to continue to do the following:
Work with their legal team/developers/underwriters to insure no constraints to the design process.
Design and test the rest of the experience.
Incorporate lawsuit cash advancements, inheritance advancements, lottery advancements, financial advisory, and loan refinancing options.
Check out these pieces to read
