Designing Delightful Banking Experiences

March 1, 2023

Good services are verbs, bad services are nouns, the UK Government states. To a user, a service is something that helps them to do something – like learn to drive, buy a house, or become a childminder. Notice these are all verbs.

For a variety of reasons, the financial services industry is not traditionally associated with values such as user experience, transparency, and innovation. About 78% of the time that customers spend on offline banking services is wasted. It’s as big of a loss for the customer as it is for the financial institution.

As for online experiences, relatively minor attention is given to UI/UX design at the top level, leaving financial products at a stage of layering text over text, complex structures, transitions, and other rather repelling features. Some estimates suggest that abandonment rates for online banking applications are somewhere around 97%. Others report that one in three consumers is abandoning the process of opening a new account because it is too difficult or takes too long.

Considering these numbers, many forward-thinking financial institutions are turning to digital identity technology companies like Payfone to enable faster, more customer-centric digital user experiences. By removing much of the friction associated with online financial apps and web experiences, digital identity technology is quickly emerging as a way for financial enterprises can gain a competitive advantage.

The complexity of the formal financial sector is often translated into the complexity of consumer touch points. In short, banks have long been a live proof of Conway’s Law, which claims that any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization’s communication structure.

Fortunately, the gradual transition to mobile-first, digital-everything experiences in the financial services industry and beyond is forcing businesses to revise customer journey road maps with an emphasis on building effective, efficient, and, more importantly, delightful experiences with financial products.

Design thinking emerged in response to rapidly changing consumer preferences under strong influence of technology companies getting into the financial sector. Technology-first organizations instill new habits – everything has to happen in a matter of four clicks or less; less is more; and extreme user-centricity.

In fact, the culture of nurturing addictive usage built a number of modern tech unicorns. While it is debatable whether focusing on user base growth versus financial performance is the right strategy, there is no denying that the Uber app is an extraordinary product. A SAP study, explained by Mark Bonchek, Chief Epiphany Officer at Shift Thinking, and Vivek Bapat, SVP & Head of Marketing and Communications Strategy at SAP, states that the most successful brands focus on users – not buyers. With some exceptions, traditional brands are purchase brands and digital brands are usage brands. The authors explain that purchase brands focus on the moments of truth that happen before the transaction, such as researching, shopping, and buying the product. By contrast, usage brands focus on the moments of truth that happen after the transaction, whether in delivery, service, education, or sharing.

The SAP study found that usage brands have stronger advocacy, with individuals showing a higher preference for usage brands over competitors, not just in making the purchase but in a willingness to pay a premium in price. On average, the usage brands customers were willing to pay a 7% premium, were 8% less likely to switch, and were >2X as likely to make a spontaneous recommendation of the brand.

The study also suggests that companies looking to exploit the branding potential unlocked by core digital technologies need to make the shift in their engagement with customers – from purchase to usage. Typically, at purchase brands, customer service & loyalty take a back seat to marketing campaigns and lead generation. Usage brands, by contrast, elevate customer service and loyalty from resource-starved cost-centers to key drivers of growth and profitability.

The starlings each in their own niche, companies like Uber, Airbnb, PayPal, and Amazon are successful in the minds of their customers not as much because of the operational excellence, the use of advanced technology, or anything that has to do with back-end stack, but because of the delightful experiences they have built and the speed at which they are able to deliver a seamless service every time.

Technology companies were able to glue the attention of massive user bases to their platforms/products/services largely due to a shift in their approach to building their offerings in the first place. Oliver Wyman calls it an empathy exercise – trying to better understand customer needs and behaviors from their own perspective. This process results in identifying possible solutions that respond to customer’s problems or satisfy their needs. The solutions are not necessarily designed to justify an ongoing initiative, but rather to learn from customers to find new initiatives.

Stop treating design as a noun. Design is a verb. – Kevin Lee, EVP of Design & Innovation at Visa, shared his reflection on two years at Visa.

Design professionals believe that the future of banking must be based on seven key principles:

  • Personalization
  • Transparency
  • Self-service
  • Mobile-first
  • Simplicity
  • Aesthetic
  • Holistic

The most thoughtful FinTech solutions today are lean but surprisingly empowering. They are simple yet allow for intuitive self-service. Most importantly, they are transparent and communicate the delivered value in an easily consumable way for a wide audience. The frictionless UX that FinTech startups have been able to build facilitates service usage by eliminating the pain of the problem that needs to be solved.

Today, two things are radically different about the most delightful experiences:

  1. Delightful UI/UX is intuitive. Without having any prior experience with a solution, the user can easily navigate and understand the core functions.

  1. Delightful UX is fast, with the core function being on the surface of UI/UX. It never takes an extra tree layer to get to the core function and execute it.

Users spend most of their time on other sites. This means that users prefer your site to work the same way as all the other sites they already know. – Jacob’s Law

A UX agency UXDA explains that for many people, the learning and understanding of finance is a daunting task. If financial UX design is created using unfamiliar approaches, different paths, and uncommon element placements, the users’ cognitive load will increase, thereby exponentially increasing their learning curve.

One could argue that banks have traditionally been purchase brands, inclined towards stuffing all necessary and unnecessary functions (products) into their apps, regardless of a customer’s particular pain points. Functionality obsession leads to complex design, unintuitive navigation, and user confusion, thereby extending the time to learn and get used to the paths to necessary elements. Overly complex functional trees are highly outdated.

On the other hand, the complexity of digital financial products is rooted in the great variety of those products. Meanwhile, as Deutsche Bank emphasizes that FinTechs select a niche element of the transaction process (usually from the last mile of bank-client interaction). They then create an alternative that is more efficient, better-rooted within the context of client usage, or automated to a higher degree than traditional bank products – offering superior convenience, speed, and visual aesthetic, and eliminating the remaining frictions in payment processes, as well as potentially lower costs. Just like how Robinhood got it all right in trading (even became the first financial app to receive the Apple Design Award), Venmo got it right in payments, N26 got it right in banking, Square in POS, Mint in PFM, Acorns in investments, etc.

The difficulty in creating a delightful UI/UX in banking apps is partially rooted in the complexity and variety of financial products that institutions are trying to sell or to get customers to use regularly. A mobile-first, digital-everything approach powered by advanced technologies, in that sense, flattens the universe of financial products, thereby eliminating the need for complex trees to satisfy a particular need.

Here are two important forces that are enabling organizations to create better financial products today:

AI assistants (voice-enabled services, in particular) are flattening the universe of the app, allowing the customer to access a service instantly without the necessity of digging it out from a complex structure tree. About 29% of smartphone users immediately switch to another site or app if it doesn’t satisfy their needs (e.g. they can’t find information or it’s too slow).

And secondly, delightful experiences are not focused on trying to figure out how to sell the same set of financial products in a new interface, but rather, on figuring out what the customers are trying to achieve and how to enable them to do it best and fast.

As the father of Apple said, You‘ve got to start with the customer experience and work back toward the technology – not the other way around. The wisdom has been loyally contributing to the success of the iPhone maker and is probably one of the main paradigms in business today and will remain in that capacity for years to come.

Regardless of the time it took the traditional sector to reassess their approach to how they build and distribute financial products (standalone digital-only offerings are on the rise in the traditional sector), there are some rather interesting and forward-thinking institutions continuously setting up an example and demonstrating the impact that design has on business metrics.

"Over the years to come, retail banking will lean on UX (user experience) to design more than a ‘mobile-first’ experience. Experienced architects will rethink what a bank is and what it means to digital-first and mobile-only customers, thereby designing an entirely new set of products that will lead to new types of relationships. It’s innovation and disruption over iteration. The ‘uber of banking’ is imminent," Brian Solis, an author and a speaker who studies disruptive technologies and their impact on business and society, explains.

Source: Design Thinking – The New DNA of the Financial Sector

As Catherine Bessant said, “It’s more powerful to capture innovation from 10,000 people than to put 10 people in a lab. We do other things because we can’t fail to capture the power of Silicon Valley. With the alignment of the business model and the buy-in of the C-suite, Bank of America undertook a user-centered redesign of its process for account registration. Thanks to this re-engineering process, the number of online banking registrations rose by 45%.”

By focusing on customers’ actual main pain points instead of the institution’s perception of those pain points, businesses can not only improve the usage of services but also build continuous loyalty with their target audience and significantly improve business metrics. Contrary to widespread misconception, financial professionals do not always know what kind of services people need.

Simply adding necessary features may lead to higher usage with the target audience. With the New Dominion Bank, for example, enabling mobile deposits led to a 45% increase in new account openings, and a fifth of banks’ customers using the feature. The mobile deposits feature led to a 10% increase in new account openings for Conestoga Bank and $1.5 million in average deposits made through the feature. The Mercantile Bank of Michigan saw a monthly enrollment for Consumer Deposit Capture (CDC) increase by 400% with the mobile deposits feature. More than 20% of mobile banking customers were using the mobile deposit feature within just four months.

Building financial products that customers will use requires thinking about finances through their eyes. While banks are focusing on improving fee structure and up-selling loans, technology companies are focusing on immediate accessibility and speed of delivery. UX design professionals outlined new UX design concepts for challenger banks that are based on the following principles:

  • Instant and imperceptible authorization.
  • Helpful introduction to key data.
  • All money at a glance with the availability of quick spending insights.
  • One-stop for all accounts.
  • Financial activity feed instead of outdated history.
  • Detailed information on each transaction should be available by simply clicking
  • Money transfers and bill payments are included in the top priority scenarios of the digital banking customer experience.
  • The use of financial AI settings to automatically prepare or even pay bills.
  • Personal financial AI assistant that can perform any request. Financial AI assistant that automatically prepares and approves a proposal for the maximum number of services using big data-based predictive analytics.
  • Build a future bank on the principles of an open platform. Bank-as-a-Platform must be able to integrate not only financial services but also retail and other types of services.
  • Insights into personal financial behavior. The personal finance management module UI needs to be able to sort all transactions by category and allow users to set a budget for each category.
  • Guidance through financial milestones.
  • Gamification.
  • Transforming ads into care using AI (personalized promotions).

The importance of UI/UX in financial services has even led to the structural transformation of a traditional institution and will only deepen it as institutions expand video banking efforts, make a push for bot-supported service and robo-advising, find a place for AI in every department to become an interactive agent in customer’s pocket and replace old security measures with innovative approaches. As banks adopt all the latest technological advancements the FinTech space has to offer, the only thing to get right will be UX.

The core value and goal for traditional financial institutions is to shift from being product-centric to customer-centric. That’s why financial institutions like Capital One, BBVA, Citi, Visa, and others have been working hard to put design at the center of product development by launching/working with design studios.

The bottom line is, as Albert Pumpers, former UX architect at the UXDA (current board member and CCO at UXDA – UI/UX for banking & FinTech), emphasized that businesses should build technology and finance around customers, emphasize the user, and deliver needed solutions in a simple way.

UX in finance is all about rethinking the whole customer journey: digital, physical, and emotional.

Keep reading

See all blogs
How to Defend Against the Rise of SIM Swap Attacks

The Federal Trade Commission (FTC) received reports of a significant increase in SIM swap attacks in 2023, and Experian's 2024 scam forecast identified SIM swapping as one of the top threats, emphasizing the need for heightened awareness and preventive measures.

Mary Ann Miller
July 24, 2024
Fraud in the Age of AI: Meet the Shapeshifter

The COVID-19 pandemic not only changed the way we work and live, it also unleashed a wave of fraud unlike anything we've seen before.

Mary Ann Miller
July 18, 2024
Company News
Introducing Prove Link™ – Unlocking the Power of Identity for Any Business

To continue achieving our mission of accelerating trusted interactions on the internet, we’re proud to announce the introduction of the Prove developer self-service platform and the Prove LinkTM SDK. With these tools, it’s now faster and easier for any company to integrate our industry-leading identity technology into its brand operations.

July 16, 2024
Company News