The modern business landscape has evolved. The core business focus has moved from operational excellence to innovation. The customer is now at the center of the pyramid, around which processes and products revolve, all tied together with a common thread of design.
One of the defining characteristics of a business is how it treats its customers. With the fast-paced, competitive nature of the corporate world, customers have increasingly become aware of the influence they hold over businesses. Thus, leaders must learn to adapt to this ambiguous world. To navigate these murky waters, design thinking is the way to go. In financial services, one of the most important factors is to understand the customer and see things from their perspective. Powered by empathy, design thinking really helps shape the industry.
From front-end packaging to product innovation and iterative business processes, the idea of design has come a long way. The financial services industry has had a glimpse of the potential of design thinking in the way FinTech has disrupted the market with their accurate problem finding and customer centric problem-solving approach. With every success story, design thinking is evolving from a concept to a mindset and is gradually being imbibed in the organization’s culture. However, there is still a long way to go when it comes to exploring the depth of opportunities that design thinking has in store for the FinServ community.
In our latest study, we at LTP have dived deep into the design wave, and are quite fascinated with the potential and impact of design thinking on the future of financial services. In this report, we explore the framework of design thinking and understand how it translates into effective product/service design. We shed light on some of the inspiring success stories and also present a unique and exciting use case in this space.
Some of the key takeaways from the Design Thinking: Evolving the Global Business Landscape report
Design thinking is a tool for innovation which takes three different factors into account:
1. Desirability: demand from the people 2. Feasibility: how plausible is a feat with available technology 3. Viability: the harmony between people
In this manner, there is a lot of overlap between different teams in a company, and the customer has a voice in the process.
- Emphasize with the customer
- Develop a Point of View (POV) based on user, need, and insight
- Generate multiple ideas from the POV
- Develop a prototype
- Let customer give feedback on prototype and make changes based on feedback
Fail early, fail often – but fail smart.
Design Thinking in FinTech
In comparison to traditional banking services, FinTech is all about making changes to adapt to the customer’s needs. The reason FinTech can successfully do this is by accurately defining a real problem through design thinking. Design thinking in FinTech places an emphasis on ease-of-use and the experience-over-product. User experience is being seen as the driving force for a modern business, and thus enterprises and modern banks are pushing for increased effort on UI design, especially for the mobile channel.
With the focus of banks shifting from payment processors to trusted consumer advisors, there has been greater attention paid to the customer experience. Banks can improve themselves through design thinking through:
1. In-house design teams: Internal design teams meant to text and experiment new service innovations.
2. API-based integration with FinTech: Collaborate with enterprise FinTech companies by offering them bank’s technology platform to experiment and fill the skill gaps in the team.
3. Strategic partnership with FinTech: Partner with FinTech firms offering financial services. Banks can then understand market potential, and the new product offering helps them test the strategy for new business.
The report also contains examples of innovators applying design thinking approach in product development:
- Lending Club
- And more
Design thinking in financial services has also been explored in the report on the following institutional examples:
- Capital One
- Bank of America
- MassMutual Financial Group
In full, the report contains the following elements:
- Executive Summary
- Introduction a. Understanding the concept b. Evolution c. Key features
- The framework of design thinking a. Empathy b. Problem identification c. Solving a problem vs. Finding a solution d. The process further
- Design thinking: Evolving business mindset
- Design thinking: Transforming financial services a. Need of the hour b. FinTech riding the design wave c. The road ahead for banks and FIs
- Key Success stories in FinServ
- Use case