November 16, 2016
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 of this year in the business world and will remain in that capacity for years to come.
While technology companies (especially startups) traditionally have been dependent on getting the UX right to ensure survival, for large players in the financial services industry, it wasn't quite the situation for a long time. It happened due to various reasons – one of them being the lack of necessity to fight for customers because they were essentially holding a monopoly on financial services.
In addition, the complex structure of organizations and an array of services have been extremely difficult to fit into a compact and intuitive mobile app design that would also be compliant with all the requirements related to online banking and the online presence of a financial institution overall. Legacy systems left no wiggle room for design experimentation either. As a result, the financial industry is not traditionally associated with values such as seamless user experience, transparency and innovation. In fact, some estimates suggest that abandonment rates for online banking applications are somewhere around 97%.
In short, banks have long been a live proof of Conway’s Law, which claims that any organization that designs a system will produce a design whose structure is a copy of the organization's communication structure.
The situation has changed only when financial technology startups came into the scene with a major bet on UX/UI and appeared to be right in their choice. Lean, but surprisingly empowering, solutions developed by FinTech startups are facilitating service usage by providing extremely intuitive interfaces for consuming, in most cases, a particular service. A part of the reason FinTech has figured it all out is because startups applied their brainpower to solve one deep problem at a time. Just like Robinhood got it all right in trading (even became the first financial app to receive Apple Design Award), Venmo got it in payments, N26 and Simple got it in banking, Square in POS, Mint in PFM, Acorns in investments, etc.
As well stated by Deutsche Bank, 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 and eliminating the remaining frictions in payment processes, as well as potentially lower costs.
Facing such a gap in getting UX right and a possibility of aggressive intermediation, financial institutions are (maybe a bit slowly) steadily evolving. The importance of UX in the financial services has even led structural transformation of a traditional institution and further will only deepen it as institutions expand video banking efforts, make a push in 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 such 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, UX architect at the UX Design Agency, emphasizes, businesses should build technology and finance around customers, emphasize the user, and deliver needed solutions in a simple way. User experience in finance is all about rethinking the whole customer journey: digital, physical and emotional.