Three Ways UX Is Shaping the Future of FinTech

2020 saw significant disruption to consumer lifestyles, their relationship with traditional financial institutions proving no exception. One impact of the pandemic was that many banks enforced protocols to limit the number of customers inside their branch by, for example, requiring appointments to visit and marking out ‘safe-spacing’ zones. Concerned about the risks of Covid transmission, Barclays, like many traditional banks, reduced branch opening hours and advised customers not to visit unless they deemed it essential.

Taken together with government ‘lockdown’ restrictions, these measures did little to encourage customers to visit their local bank. The need to transition away from the “High Street” and interact remotely underlined the growing trend already underway and now made it an imperative. Almost overnight accelerating technological (and in particular, digital) transformation initiatives became every banking CIO’s priority.

FinTechs have shown that innovation and digital services translate into highly personalized products and a new range of banking experiences. Financial technology combined with outstanding customer experiences has reshaped the sector.

The rise of online banking, the ease with which payments could be sent, and the availability of tools to access data on spending habits have now, arguably, changed what was a novel experience for the more tech-savvy into something which has become both the norm and even a necessity. It is estimated that 46% of people now exclusively use digital channels for their financial needs. With the onset of digital-first banks, digital wallets, mobile payments and other alternatives to financial transaction engagement, the key to loyalty has now become the user experience that drives the corresponding demand for flawless user interfaces and design expertise within the host organisations.

This article will explore three ways in which UX is evolving in the industry and where much of the effort (and innovation) is shaping the consumers’ banking experience.

Balancing UX with security

Security and customer verification are core to the banking process. According to RSA, newly opened accounts (i.e. less than one day) comprise 48% of fraud value. To minimize security risks while providing smooth sign-up processes, digital banks continue to move to increasingly sophisticated authentication solutions and incorporate customer-centric and innovative approaches to guarantee an excellent UX which, in turn, leads to higher engagements.

Striking the balance between accurate ID validation and seamless onboarding is vital - not only to ensuring the customer will complete the whole onboarding process, but also to increasing the likelihood that the consumer will obtain a positive brand impression. Through high-tech digital-ID services, setting-up a new digital bank account can be achieved in minutes entirely in-app. By transitioning from ‘what a person knows’ (passwords, pins or dates) to ‘what a person is’ (with features like fingerprint ID, voice & facial recognition) and Machine Learning, customers can validate their identity and begin their new mobile banking journey almost instantaneously.

Personalized banking experience and Big Data

One way in which FinTech companies can increase the ‘stickiness’ of their customers is by focusing explicitly on enabling more personalised user experiences through data insight. By creating, for example, tailored offers and alerts based on spending behavior, or by providing financial guidance, digital banks can offer customers solutions that address real needs (even needs of which they might not be aware). It is, however, crucial for FinTech organisations to understand the importance of ‘hyper-personalisation’ whilst optimising their communication with users. A key element of this lies not only in the tonality and visuals of communication (the UI) but also in addressing the more general “how” and “when” (the UX). Including a truly user-first approach – informed by Big Data – to share tailored offers and support will have a positive impact on both customer retention and brand loyalty.

FinTechs seeking to grow via cross-selling reward schemes could consider using customer data to their utmost advantage. Looking beyond the ubiquitous ‘money off’ voucher, they could refine their communication (for example a coffee promotion) to coincide with an optimal time at which their customer is most likely to respond positively (their regular Tuesday morning visit to their café of choice).

Incorporating hyper-personalisation lends itself to overcoming the barrier of absent human interaction that FinTechs should consider when improving their services. To achieve that emotional connection with their customer, modern financial solutions need to continuously prove they understand their users and their needs.

Access to new financial services

UX has also helped introduce more inherently complex services like stock-trading and FX markets to a new audience. It’s estimated that last year alone users opened 10 million new brokerage accounts. A range of investment apps have been developed which cater to specialised user needs – whether they’re a stock market novice or a couple hoping to save in the future – and allow almost anyone to begin building a portfolio.

Clear dashboards and easy-to-navigate apps both of which provide at-a-glance overviews and easy trading are key to a good UX. Trader Republic encapsulates these features - it’s simple, provides feedback and gives the user a secured feeling. That’s what UX is about.

Another trend has been the rise of impact-investing apps. With Generation Z considered the most socially conscious, it’s no surprise that, according to Priori Data, between 2015 and 2018 investment apps advertising themes of sustainability almost doubled in downloads to approximately 24 million. ‘tickr’ – an investment app that lets you decide which causes you’d like to support (e.g. climate change, equality, or disruptive technology) – offers something of a ‘win-win’ situation for customers who want to see a return on their money, but wish to have a positive impact on the world while so doing. It is, however, vital not to undermine the role UX has played here. The onboarding process is seamless and the layout simple, yet aesthetically pleasing. Features such as a visual breakdown mean customers can also see at a glance how their investments are making a difference.

A competitive future

Given its impact on both attracting and retaining users, the importance of Design Thinking and UX in FinTech cannot be underestimated. Digital natives are accustomed to seamless user experiences when it comes to all aspects of their mobile banking - onboarding, spending, saving, etc.

By putting UX-centricity at the heart of their services in a fiercely competitive sector, the acknowledged challenge for modern financial institutions will be how to continue to develop both design and technology to continuously improve their customers’ experience. With the high specialisation, quick iterations, and UX-centricity offered by emerging FinTechs, it will be fascinating to see how the established financial service providers adapt and evolve in this space.

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