Alex Kreger, UX Strategist & Founder of financial UX design agency UXDA, adds soul to banking & Fintech products in 34 countries.
Digital trends are changing consumer behavior in the financial industry and have led to new marketing requirements for financial brands. Digital banking penetration has exceeded branch visits with 75.1% of bank account users using digital channels. As the founder of a user experience design agency in the financial services industry, I believe the classic 4P marketing model doesn’t work well anymore and should be evolved from product, price, place, promotion to purpose, process, platform, people.
1. From Product To Purpose
Nowadays, I think the main thing that defines a product is the purpose of the company. The company must be ready to change or modify the product so that it can adapt to market requirements. In today’s digital market, every bank now has its own website and app.
The product must change according to changes in consumer behavior. If a user switches from the desktop to a mobile device, then the product has to go with it. And digital is not one of the channels; from many millennials’ point of view, the banking app is the bank itself.
2. From Price To Process
Previously, the well-designed fee policy could ensure extra profits, so companies were focused on how to sell more and earn better. However, profit is not the main goal of digital companies; rather, it takes its natural place as the company’s “fuel,” as Simon Sinek says.
Moving to the process means switching the focus to customer service. User experience metrics, such as customer satisfaction, net promoter score (NPS), retention and positive feedback are becoming key indicators of a company’s effectiveness. A great value for customers creates a lot of fuel for the ride.
3. From Place To Platform
In the past, the place was about logistics and sales channels. Today, almost everything is determined by online platforms. Fintechs already sell and serve worldwide by onboarding customers online through their digital products, and they will achieve even more by building their own digital ecosystem.
Without a digital presence, there is no service in the digital age. Now it’s not about the best bank branch place in the town; it’s about the best place on a mobile screen.
4. From Promotion To People
Promotion used to be the main engine of marketing — the more ads, the more sales. Nowadays, this is not always enough. More than ever, people seem to value human attitude. Consumers demand respect for themselves, for society and for the world in which we live. That is why they want brands to act in a sustainable, inclusive and socially responsible way.
In the digital world, it is not the media but the people themselves that have become the main source of promotion. I think this is because social networks have taken the place of the media. This also applies to the company’s employees. A passionate team could bring better results for a digital product because people are the main driving force.
Create digital products through design thinking in banking.
This change in the 4P paradigm makes the design thinking methodology especially popular because it helps to cocreate products with customers, thus developing human-centered banking services. In the digital age, success is not determined by the best price or by advertising, but by a better customer-centricity. And design thinking in banking is a human-centered process of finding the best digital solutions to customers’ problems.
Step one: Empathize with customers.
Design thinking begins with customers’ context research: collection of data about their expectations, needs and pains. The goal is to be open-minded, empathize and take a fresh look at the clients you are trying to help.
For example, when we study the users of a particular financial product, we find that most of them have families. They are concerned about the family budget, which often leads to conflicts because of the separate accounts.
Step two: Define user problems and product value.
In the definition phase, the information and data obtained from the research are analyzed in order to understand the key problems and set priorities. The main goal is to reveal exactly what customers need. Applying the Pareto principle, only 20% of the product is used by 80% of customers.
For example, we can define the key scenarios to find a way for the family to easily perform joint financial management for several accounts — husband, wife, kids and the family unit.
Step three: Ideate solutions.
In the ideation phase, begin to identify a number of hypotheses as to what might be the solution to the key scenarios defined previously. Get out of the box and start generating dozens of ideas.
We can allow spouses to view both accounts in one mobile app and transfer money from one account to another. But the main thing is a separate account for family savings with limited access, as well as budget limits and/or spending alerts.
Step four: Prototype product.
At this stage, the main task is to create a product prototype to test the hypotheses in practice. Make sure the solution is based on predefined user scenarios and business goals. Product wireframes can be made online or even sketched on paper. Create a simple, schematic version of a future product that allows a simple and practical test of a product idea.
Step five: Test before development.
Relatives, friends and colleagues can all play the role of testers. It is important to assess how easily different people understand the principles of a product, what bothers or seems complicated to them, and what piques their interest and willingness to use the product.
If most of the answers are positive, make the necessary adjustments and develop a minimum viable product (MVP) to perform more complex tests. If the test results are negative, repeat the previous steps.
By using a design thinking methodology to solve tasks and create products in the banking industry, banks and financial institutions may be able to significantly increase their customer-centricity. Design thinking in banking can help to uncover new opportunities, create product benefits and find innovative solutions to increase competitiveness and adaptability to the digital environment.