From today we want to share with you a collection of trends and opportunities for the digital finance of tomorrow, from the point of view of user experience and product designers thanks to the collaboration and professionalism of our technical partner Enhancers.
Let’s start by briefly listing the key points that we will explore one by one in the coming months.
Fintech – the innovation space opened up by the digitization of financial services, which corresponds to a new, immense market space – is reaching cultural and commercial maturity faster and better than other sectors experiencing a similar revolution. A perfect example is the “4.0 industry”, or “utilTech”, which is the corresponding phenomenon in the utility sector, mainly in the supply of energy and gas.
This change can happen simply because the digital transformation in banking started earlier than in other industries or because money transfers represent a more powerful acceleration engine, but from the point of view of UX designer, product developer and “design thinker”, this evolution involves a crucial paradigm shift.
If opportunities to build successful new products and services – from PayPal to Stripe, Revolut, Satispay, Gimme5 and buddybank – emerge tactically at an early stage, inspired by new technological possibilities or generated by individual insights, it is now necessary to adopt a more organized approach. Opportunities must, therefore, be strategically defined starting from the real needs and expectations of people, and then tested and validated on the market according to a rigorous implementation plan.
Today we are convinced that fintech needs product design, i.e. the discipline that combines user-centered design (humancentered design, user experience design) with the experimental logic of development and distribution of digital products faced by the best startups (Lean UX, Agile development, Growth hacking).
The aim is not to show off knowledge of very popular English terms that are often misunderstood, but to offer space to the contribution we think our technical partner Enhancers can give to imagine and implement the bank of the future together with the two largest institutions (from UniCredit to Crédit Agricole in Sella) and innovative “challengers” such as Gimme5.
In a scenario that changes at an impressive speed, Enhancers has chosen to address 10 crucial themes covering UX design, tech and marketing: trends already in action, but also amongst best practices and consolidated principles by which to be inspired. It’s a map for orientation in the near future of digital finance. Let’s start with an index, a brief anticipation of the places we will be visiting in the coming months.
1) The current account becomes a marketing space
The so-called intent, as Google has codified it, is the new protagonist of marketing: the elusive intention, but strongly contextual, that guides the purchase paths, never being linear and predictable. To be present when the intent manifests itself is the new mantra of each brand. The best time to intercept these micro-moments is when the user manages his money, directly in his account and on his cards. So far, this opportunity has been underused by banks mainly to up-sell or cross-sell financial products. However, new models are emerging that offer current account holders personalised commercial offers of all kinds based on spending habits and suggestions based on financial behaviour. One example is the services offered by Meniga, which provides fintech with an effective engagement engine of this type. The online banking space tends to become an active place for lifestyle experiences, the potential of which we will explore.
2) Payment cards have a future
In banking jargon, we refer to the cards used for paying as plastic. This apparently reductive connotation of “material to be moulded” actually offers a comparison with the plastics in the work of industrial designers from the very beginning of their the 1950s has given meaning and value, fuelling growth in the exponentials of the furniture and accessories industry. It played a similar role to that which UX designers can have today for the debit, credit, prepaid, revolving… cards – in the age of the open banking. We have just begun to imagine advanced services that will be based on payment cards, by expanded functionality (Apple Card anyone?) to money management tools linked to the systems of financial management and solutions that combine multiple means of payment in one single piece, making the wallet lighter (as with Curve App). We will point out the most promising directions in this new territory.
3) Open banking enables extra-banking services
PSD2 is an unprecedented challenge for institutions and, at the same time, a huge opportunity. If the most immediate results of the implementation of this new model are recorded in the field of payment systems and personal financial management tools (more effective because they can aggregate all the financial data of a person, as has been the case for years in the United States with products such as Mint), we will find a huge field of potentially new opportunities to be exploited and especially those involving extra-banking. In fact, money movements represent concrete traces of behaviours, habits, tastes, opinions, emotions. Through these traces, we can build meanings and values in apparent contexts such as mobility, sustainability or job-matching, and build up a new value-added set of services based on the logic of quantified self, intelligence and recommendation engines.
4) Branches become experience stores
The obsolescence of bank branches, which are progressively losing visitors and meaning, is not a new phenomenon. This trend, however, can be read in the context of a wider crisis, which affects all traditional retail. As with other types of shops and agencies, the evolution is necessarily going to be towards a model of the liquid store, in which the places are moments, and not the most decisive, of an experienced immersive and seamless multichannel which are always available. On the one hand, the subsidiary must become an experience hub, incorporating training logic, entertainment and related services and products, and on the other hand, it must partially renounce its four walls, distributing itself throughout the territory with advanced digital solutions (mobile and on-demand branches, remote consulting branches, etc.). It is necessary to adopt a modular strategy and a variable structure for this to occur.
5) Mobile-first, done right
The “mobile-first” approach is now a well-established practice for digital products in general. The awareness that the mobile format is the master copy from which to create the other versions is also increasing in the field of digital finance but it is not yet clear enough to everyone that the screen of a mobile phone is not the miniature version of the display of a computer. It is necessary therefore to optimize the experience and have a different distribution of cognitive loads requiring specific and sophisticated technical skills of designers and those who implement the front end. The consequence of this misunderstanding is that too many banking apps are nothing more than the scale reproduction of the corresponding internet banking, overloaded with functionality and difficult to use. Often they are also the result of another frequent misunderstanding that an interface, that is “too beautiful” from an aesthetic point of view, is not usually functional as well when, on the contrary, it has been shown several times that visual gratification makes the product even more efficient and the experience fluid. This is the ideal combination to ensure failure and get pitiless reviews on the app stores. We’ll challenge these myths and see how mobile-first is really designed.
6) Increase online contracts
32% of users leave an online subscription process within 5 seconds. 46% of users quit because of bad interfaces. The task of UX designers is to simplify and accelerate this delicate transition, making life easier for people and increasing conversion rates. In the banking sector, the onboarding phase for users, the opening of an online account for instance (KYC, “know your customer”) is made even more difficult because of the necessary compliance with rules and regulations (anti-money laundering, MiFID…). The necessary mediation between a rigid compliance-driven approach and a fluid human-centered model is led by three key design principles: proportionality (the user should only enter the necessary data in proportion to his or her goal), progression (the level of detail should be contextual and never precautionary), and transparency (it should be clear at every step the underlying motive for the specific data or documents). We will also deepen these principles and their concrete application through the example of the buddybank KYC, designed by Enhancers, and see how we can aspire to a custom onboarding for each different user in the future.
7) Easy, but not too much: ethics for the UX
The imperative that has guided the creation of digital products, at least since Mark Zuckerberg said so in a famous speech in 2011, is: “the experience must be frictionless”. Unhindered, immersive, fast, simplified. When you enter the field of fintech, however, the frictionless approach meets a limit. For example, making it too easy and maybe playful to make an investment in cryptocurrency reduces the perception of the related risk and can cause a user to inadvertently lose money”. In this case, protests, negative reviews, image fallout and more can occur. We are not talking here about the so-called “dark patterns”, or design devices that tend to force the choice of the user with various stratagems, but about a design that is all too fluid, which eliminates any friction in the name of total intuition. The standard cannot be, in this case, absolute ease, but rather relative and contextual. The Fintech experience needs clear signs, “programmed friction”. We will show how even just the use of colours in an interface can be decisive for the correct orientation of its users.
8) Protect your data to share it better
With the advent of PSD2, the circulation of personal financial information will be much freer. Consequently, the protection of this same information will have to be even more rigorous and the power over it will have to be returned as much as possible to its legitimate owners: the users themselves who in the meantime have developed a strong sensitivity to the issues of cybersecurity, more so after striking cases such as the Cambridge Analytica scandal. The theme is not exclusively technological and the solution is not limited to thicker firewalls and impregnable cryptography but on the contrary, implies ad hoc solutions of user experience. We are talking about the Privacy by Design approach, which puts people at the centre of the system and considers all their data-sensitive, regardless of the fact that it follows logics that are as transparent and preventive as possible. This means, for example, that the default state must prevent any unconscious sharing of data. We will explore ways to design solutions that incorporate privacy as the foundation.
9) Fintech and conversational interfaces
We control more and more objects with our voices and interact more and more often with digital services in dialogues with artificial intelligence. Very soon, we will “talk” with our money through chatbots, voice assistants and smart speakers to move it, spend it, invest it. There are already very advanced examples of Fintech products working in this direction, such as buddybank, which is introduced exactly as being a “conversational bank”. And it is precisely the model adopted by buddybank, which integrates a service of the concierge with human operators that we believe at the moment to be more adequate: not fully automated (report exclusively to the human-machine), but hybrid (human-machine+human relationship). On the other hand, in chess, for example, the best performances are those of the “centaurs”: the people who collaborate together with artificial intelligence. We will try to imagine the possible applications and operational implications that can develop/take place.
10) Consumer credit as a means of payment
We expect the same intuitiveness, speed and gratification that Google Maps has accustomed us to from every product and service. This is also increasingly true for banking. From this point of view, the traditional model of consumer credit is also radically changing, and it must and can become, much more accessible and without investigations that are now difficult for users to understand, by adopting, for instance, the logic of prior authorisation. Furthermore, in this case, innovative solutions are already available, such as those of Oney, the French fintech that provides a “plug and play” module to obtain financing in a few steps while checking out. Barriers to entry tend to disappear, with benefits for both the buyers, who can use the micro-financing as money cash, and for retailers, with facilitated impulse purchases and virtually no waiting times for payment. The new credit to the consumer is informal, light, agile, liquid.