UX Design and the Future of Banking

For a long time, it could be argued that banking was among the least user-friendly industries. Banks kept rigid hours, investing money was complex and inconvenient, and the rules of lending were byzantine and incomprehensible to most.

Perhaps it makes sense then that few industries have been shaken up more by the advent of UX Design than banking. The industry’s major players have to understand just how crucial user experience is; according to Deloitte, 57 percent of millennials would change their bank relationship for a better tech platform.

Given how thoroughly and swiftly the financial services industry has changed in recent years, we took a look at the ways in which UX Design is playing a role in banking.

Forward-Thinking Fintech Startups are Changing the Game

We’ll get into specifics later, but it’s worth pointing out that many of the most successful Fintech startups were founded on the basis of removing user experience pain points from the banking process.

Peer-to-peer payment apps Venmo and Paypal made it faster and easier to move money around the globe, Lending Club is among the services to remove headaches from the loan process, while services like simplified-saving platform Acorns and cash management suite Betterment are among the many new tools out there to help users begin to build real savings.

Meanwhile, investing money — once a specialized skill that seemed completely inaccessible for many in the general public — has been demystified by forward-thinking products like commission-free investment pioneer Robinhood and Canadian success story Wealthsimple, which now boasts more than 150,000 users and manages $4 billion in assets.

And make no mistake, UX Design has been at the absolute core of Wealthsimple’s success.

“We really focus on users and the user experience,” Wealthsimple’s Director of Product Design, Gev Marotz, told us. “You want people to use your stuff, and they’re not going to use it if it’s not easy to use – if it’s not designed properly. It’s important to design with a specific group of people in mind; the people you want to use your product. If you take that out of the equation, you’re just guessing.

“So, our approach to everything is to make things easier for people, whether it’s on the technological side, the design side, or how we write our copy. People already love us – we want to make sure they keep loving us and new people who come on feel the same way.”

Indeed, by rethinking the financial services industry with a people-first mindset, these innovative upstarts have already dramatically changed the banking landscape.

Accenture found that these digital-only banks, Fintechs, and big-tech companies have already captured one-third of new revenue globally. Meanwhile, the global growth of finance apps continues on a steep upswing; it has increased 75 percent since 2016 to reach 3.4 billion downloads worldwide as of 2018. 

Beefing up Your Savings

Chances are, smart, human-oriented design has left your savings account a little bulkier.

User experience-centered apps that help you finally stay on top of your budget are everywhere. Digit automates your savings by keeping an eye on your transactions and making an educated guess as to how much you can afford to save. The ever-popular Mint brings together all of your accounts in one place, allows you to easily create budgets, and features suggestions based on your spending. Clarity Money helps users keep an eye on easy-to-overlook subscriptions draining money from their accounts each month.

Meanwhile, Honeydue and Twine are both aimed at helping couples get financially healthy, while Current is aimed in part at helping parents work with their teens on their finances.

In all cases, the apps are intuitive to use and clearly designed with people in mind — perhaps specifically, people who have had trouble saving in the past.

“It is now the responsibility of Fintech companies to design financial services that will help people to effectively manage their money in an effort to reduce or even eliminate negative emotions and frustrations,” said Karina Skara, UX Consultant at UX Design Agency.

“It is critical to focus not only on designing the services as transparently, user-friendly, and simply as possible, but also on understanding how emotional finances can be for people and what dramatic feelings and reactions it can cause.”

It’s similarly telling that when Bank of America wanted to inspire people who were having trouble taking control of their finances, the company turned to global design firm IDEO. The result was the Keep the Change Savings Program, which allows customers to round every purchase up to the nearest dollar and deposit the difference in a savings account.

The project was a hit – in fact, of all new customers, 60 percent enroll in the program. And again, the human element was crucial.

“There was an almost unexpected and very emotional effect from this new service… people who previously never had savings suddenly did,” said Faith Tucker, Senior Vice-President and Product Developer at Bank of America during the project.

Spurring Innovation From the Industry’s Titans

Even withstanding the changes we’ve covered, the world’s biggest banks are aggressively investing in UX Design and it’s likely the most major innovations are still yet to come.

Of the 50 largest banks around the world, 75 percent now pledge themselves to some sort of customer-experience transformation.

Consider that Capital One acquired design firms Adaptive Path and Monsoon, then rolled out a series of new digital features, including an emoji-enabled chatbot and GPS-tracked transaction histories, and in 2018 the company launched a 42,000-square-foot Innovation Center complete with an experience design research lab. And JPMorgan Chase hired former Yahoo design executive Tim Parsey then soon updated its app with features meant to improve the mobile banking experience by weaving in local imagery.

It’s clear design is top of mind for the titans of the banking industry.

“(We) wanted to create an experience that starts (with) emotion,” Chase’s Digital Chief Gavin Michael said. “We’re humanizing the user experience.”

Meanwhile, some working within traditional banks are looking beyond the financial services industry entirely for inspiration.

“If Amazon is doing something, and it works, we should at least try it,” said Andy Vitale, head of user experience design at SunTrust.

“I think it’s really starting to sink in for our organization and everybody else’s. We’re not just competing with the bank across the street anymore,” added Dan Mecher, lead design catalyst at Fifth Third Bank. “It’s the customer’s last best experience that we’re being compared to.”

Protecting Customers With Friction

It’s been nearly a decade since Mark Zuckerberg famously touted Facebook’s “frictionless experience.” But in the case of many Fintech products and apps, customer-friendly design does not equate to an entirely seamless experience.

That’s simply because these are decisions that should not be made mindlessly. A Usability Geek analysis of Acorns, for instance, praised not only the platform’s gorgeous visuals, its clever architecture and its ease of use but also the “savvy” decision to keep a thorough onboarding system, noting that a financial services platform that is too easy to sign onto gives the impression of a lack of security. It’s similarly an example of a good, user-centric design when Venmo forces the user to confirm their action when sending money.

“I am not a big fan of frictionless being seen as the ultimate goal,” said Aden Davies, Head of Product at the digital current account alternative U Account.

“Most financial products are complex, unfortunately, and they carry risks and responsibilities. All those things have to be considered and designed for in ways that make processes slick, but also compliant and, most importantly, that the customer understands. That is a real design challenge.”

Allowing Customers to go Mobile-Only

Of course, one of the biggest UX innovations in banking in recent years is that we hardly have to go to the bank at all.

Citi found that 91 percent of users prefer banking with their app as opposed to going to a physical store, while Bank of America estimated that customers conduct more than 98 percent of their transactions online or electronically.

In fact, 89 percent of consumers reported using mobile banking in 2018, up 6 percent from just a year prior. Further, 70 percent said mobile banking was their primary method to access their account, 64 percent said they would research a bank’s mobile features before opening an account, and — perhaps most importantly — 63 percent said they would switch from a bank if they offered a poor mobile experience.

UX Design principles haven’t just led more people to conduct their banking business from the comfort of their couch or office; they’ve also caused some major banks to step their game up in terms of the experiences offered at their branches.

For instance, Capital One launched the Capital One Cafe — complete with WiFi, local coffee and food, and free money coaching services — as a way of luring back Millennials who were turned off by the sterile bank environment.

“These cafes give customers a chance to come in and experience our brand: see, touch and taste Capital One,” said Shaun Rowley, director of Capital One Cafes.

Find out more about BrainStation’s UX Design courses.