Five Digital Banking Challenges that can be Solved with Customer-Centricity

The digital age has opened more opportunities for development and growth as ever before. This challenges the banks to adopt a new mindset, business approach and innovative technologies to take their services to the next level. Success in tackling these challenges relies on customer trust and loyalty. How to become a loved digital brand that provides exceptional user experience and establishes emotional connection with the clients?

 1. Customer expectations are constantly growing

When it comes to banking, 77% of banking customers feel that their bank's performance falls short on their expectations, according to a FIS Pace study. Customers expect the digital banking products to solve their problems and ease their everyday lives in a pleasant and enjoyable way. 

Tackle it with Financial UX

Only 19% of companies have a team of customer experience specialists that would help to bridge this gap between the customer expectations and the businesses. So, the first step of becoming a financial brand that can deliver up to the customer desires is to develop a strong team of either inhouse or outsourced UX specialists who can become the user advocates within the organization. Their job is to integrate customer-centered values and mindset throughout all levels of the organization, making sure that the processes meet the customer needs. This can be greatly facilitated if the C-level executives are actively involved in increasing the brand's value through user centered strategy and products. 

The UX team will make sure to integrate the Design thinking approach deep into the operational and strategic processes of the company. Making sure that the financial solutions created match the user needs and expectations. 

Financial UX action plan

In order to create truly amazing financial solutions that would wow the customers, the product development should be based on the market need. 

From my experience, creating a product with the main focus on its features, marketing goals, and profitability, results in failure, as customers reject it. At the same time, many financial companies believe this is the right approach to creating digital products. As stats show, 80% of CEOs believe they deliver a superior experience, while only 8% of customers can agree to that, according to Bain & Company. 

To create a financial product that customers will demand, love, and be loyal to in the long term, it's critical to start with exploring their needs, wants through the human centered Problem-Solution cycle. In fact, 76% of consumers already expect for companies to understand their needs, expectations and deliver according to those. 

It's important to find out for what  “job” the users hire the product. This is what defines the motivation to choose a specific product over other alternatives. So that the newly developed solution wouldn't become a blind try to succeed, but would be tailored specifically to solve the pains and struggles users face. 

A user will choose a solution according to his/her lifestyle. Here it's important to take into account the audience of your product, as, for example, the daily routines of Millennials and seniors would differ and have an according impact on their expectations. According to Oracle report, 86% of customers ready to pay more for a better customer experience, so this is the most effective way for the business to take care about profit in a long term.

Such components of UX research such as User Personas, Empathy Map and Jobs to be Done approach allow you to develop a clear understanding of what the exact audience of your specific product expects. The specific problems they seek solutions to and what makes them disappointed in the products already available on the market. This provides your team with the possibility to create a digital financial solution that would address all of the most important user scenarios and deliver an exceptional user experience to fall in love with your financial brand. 

2. Switching brands becomes the new normal

In the digital age, customers are harder to impress and less forgiving. It's enough with only one case of bad product experience to damage the way a brand is viewed in the eyes of the customers and switch to another one, as 33% of Americans have stated. Given the fact that it takes 12 positive experiences to compensate for one unresolved negative experience, financial products have to be on the top of their game to be liked by their clients. 

Customers choose those financial brands that are able to ease their lives and provide positive emotions with their products, instead of complex solutions that cause them headaches. Open banking makes switching easier than ever before, as the number of user-centered alternatives rises in the market. 

Tackle it with Financial UX

In the digital age, 89% of customers would switch to a competitor brand after receiving an unpleasant customer experience, according to Oracle.  

Here the key differentiating factor between companies that customers so easily abandon and brands that they stay loyal to is the value they receive. The better the value matches the customer expectations, the bigger chances of the brand to be chosen in the long term over other alternatives. A genuine value realized through a great customer experience proves that the company cares about its customers and builds trust between the brand and its clients. 

The unique value depends on 5 interconnected elements that should be integrated into the company's inner processes and product development - functionality; usability; aesthetics; status; mission. 

If it's not enough with functionality to conquer the rising market competition, provide great usability. If there are competitors that provide both - functionality and good usability, aesthetics should be added to make the product stand out. To gain more advantages over other alternatives, personalize the product, connecting it to customers' lifestyle, make it a symbol of his/her status. Finally, if all of the previous levels are completed, move to the highest one of providing a sense of a mission that your company embodies. 

Financial UX action plan

Financial UX design approach has the ability to eliminate “bad experience” as a reason for switching brands by transforming it into a delightful one. 

To create this amazing experience, start by mapping out your user journey and identifying emotional reactions at every touchpoint within your digital solution. This way you can find where you need to reduce friction that causes switching and transform pain-points into wow-points.

3. New digital platforms transform consuming

We are already used to desktop, mobile and wearable (Apple Watch) products but this is nothing compared to what the future holds. 

Conversational services (Alexa and Google Home voice assistants), IoT (Internet of Things), VR / AR services (virtual and augmented reality, e.g. Oculus), Robots and Neuro services (neural interfaces, Neuralink currently developed by Elon Musk) are expected to become a part of our daily routines in the near future. 

Financial brands that will become the leaders of the future have already started to develop their digital competences to be able to adapt their service to any kind of digital platform instantly. As Brett King has predicted: “The number one bank in the world will be a technology company”. 

Tackle it with Financial UX

A bank can be sure to keep up with the technological innovations if it adopts a disruptive company culture. This agile way of thinking and operating allows to be flexible and adapt to any new technological and customer trends. Such a company culture aims to reinvent the customer experience bringing it to a new level and offering a solution that's way more pleasant and enjoyable than any other alternative on the market. This kind of brand provides an exceptional experience that's easily accessible throughout all of the platforms that people integrate into their lifestyles. 

Progressive banks who will realize this and prepare such an experience working closely with financial UX experts will become the pioneers of the new digital banking reality. 

Financial UX action plan

Constantly monitor and detect any change in the digital behaviour of the customers and have the technological resources to adapt to it quickly and efficiently. 

By staying alert to rising changes in customers' needs you will be able to prepare in advance and react in time expanding your digital solution to new platforms in a way that's enjoyable for the customers.

Practice experience-centered mindset throughout the whole team of the financial organization and have courage to challenge your legacy. This will organically make your business maximally flexible to adapt to any digital innovations demanded by customers.

4. Digital channels substitute marketing

Brand marketing is rapidly substituted by digital channels. It means that users already get the overall impression of a financial brand directly from the interaction with its digital service. If the experience of the digital solution isn't satisfactory, the user’s trust and sympathy towards a company can be ruined. 

This is why it's very important to start viewing digital products as a representation of the whole brand. 

Tackle it with Financial UX

Digital age requires a brand new business strategy. Only a decade ago it was enough with a product, a business model and a market distribution strategy to ensure success. But the requirements have changed. In order to communicate the brand value through digital channels, components such as experience; design; value and a user-oriented experience mindset should be adopted.  

To create a loved brand it requires to focus on the experience your product provides, not on its features. The better the experience, the higher the chances of becoming a trusted company that the customers will stay loyal to in the long run.

Design shouldn't be perceived as a package or marketing tool but an approach that puts the customer in the center of all business operations and allows to deliver up to expectations. 

Marketing motivated mass sales are becoming extinct. Everyone can let the world know about what hides under a pretty but empty product package through reviews and social networks. Currently, people choose those products that provide them value and ease their daily lives, not the ones with a loud marketing campaign.

Finally, a loved brand would always view its customers and all business processes through the prism of experience mindset. It's a way of thinking that consists of serving the customers; providing an emotional experience; offering solutions instead of overfeaturing; disrupting the industry and ensuring a smooth flow throughout the customer journey. The essence of it is that you as a business owner or employee treat your customers as family or friends and strive to help them in any way possible.

Financial UX action plan

To create a unique digital product experience that would turn you into a brand loved by the customers, start by a small audit of your current product. Asking yourself the following questions:

• When is the essence of your brand and how can your digital products communicate it?

• What is your digital strategy and how your digital products realize it?

• What are the habits, needs and lifestyles of your customers and does your product meet these?

• What other alternatives are available in the market and does your product offer a better experience and value to the customers?

• Is your product modern and aesthetically pleasing or it looks outdated?

• Is your product intuitive and easy to use for the customers?

• Is your product gray and boring or creates a “wow” effect?

• Are your users proud of the product and perceive it as part of their lifestyle, or are they ashamed of it?

Replies to these questions should demonstrate how your digital products communicate the brand value to the customers and stimulate ideas on how to improve it.

5. Big Tech perform emotional disruption

We are living in a world that's ruled by Big Tech companies. GAFA is already disrupting the financial industry in several ways and we all know this is only the very beginning. 54% of global respondents trust at least one big tech company more than banks in general, and 29% trust at least one tech company more than their own primary bank, according to Bain & Company global survey. 

One of the reasons why these tech giants have the support of so many customers is their ability to provide value and form an emotional connection. This could become a blind spot that financial companies aren't aware of. 

Source: 

https://thefinancialbrand.com/80293/trust-loyalty-digital-banking-big-tech-amazon-paypal/

In the digital age, customers expect to receive not only a tailored and convenient usability but also positive emotions. As stats show, consumers who have an emotional connection with a brand have a 306% higher lifetime value, stay with a brand for an average of 5.1 years vs. 3.4 years, and will recommend brands at a much higher rate (71% vs. 45%), according to Motista. 

It has never before been so important that the services we use daily, make our lives better, and create joy in the process. Despite this, there are still plenty of complex and difficult to use banking products. Why would any customer choose a banking product that is constantly causing anxiety, frustration, and stress over a solution that is as secure but also makes managing finances fun and enjoyable? 

Customers compare their digital experiences and there's often quite a big gap between the usability and experience of Facebook or Instagram and their banking app. This causes disappointment because they have experienced the Big Tech products that are smooth and enjoyable. Why can't their banking experience be the same? This is the reason why the finance products developed by the Big Tech are predicted to dominate the solutions provided by the traditional players. 

Meanwhile, there are finance companies that use this situation as a perfect growth opportunity and motivator to up the digitization efforts. There are examples of well-known huge banks that have succeeded in creating a banking experience that surpasses the fintech products in many ways delivering amazing service. 

We can read reviews on Google Play an Apple Store that states the user’s overall excitement about the huge transformation the bank has gone through. These customers will most likely stay loyal because they see that their bank really does care about them and has made a big effort to create this pleasant experience for its customers. In fact, 79% of U.S. consumers state that brands have to show they care and understand their users, in order to choose their services, according to Wunderman. 

Tackle it with Financial UX

Human brain is not designed to budget. The irrational, unconscious emotions drive 80% of our behavior. This explains why it's difficult for many to manage their finances. Banks should take these stats into account and address people in a language that they understand - through emotions. 

Enrich your digital banking products with a pleasant and enjoyable experience that not only delivers up to customers needs but also creates an emotional connection with your brand.

Often the banking industry is afraid of emotions, but truth to be told, this is one of the main ingredients of creating a long-term relationship with your customers. 

Financial UX action plan

Financial UX design is the most powerful and effective way to create an emotional connection between your brand and your customers through a digital product. 

Loved brands are built on positive customer experiences and positive experiences are created through emotions. 

Find out what do users love about BigTech products and think about what you can use in your own product to make it more emotionally engaging. The goal isn't to “copy” the features of other products but rather get inspired from their “best practice” to stimulate ideas about how your solution could be improved. 

One of the ways progressive finance companies establish an emotional connection with their customers is by adding gaming elements. It allows to bring fun and positive emotions to the financial experience. 

The key to financial brands success lies in the customer's hearts 

84% of customers state they’re more likely to stick with a brand that treats them like a person, not a number, according to Salesforce. It's extremely important not only to think about usability and UX but also about the integration of personalized, positive experiences that form emotional connections throughout the whole digital ecosystem of a brand. Does this brand experience convey that the bank puts the customers first, cares about them, provides needed solutions and wants to help in any way possible? 

It's not enough to create a nice banking app. It takes the integration of user-centricity in the whole banking ecosystem - every product, every aspect of the business, every department, and every employee. So that the whole organization is united in serving the customers and caring about them. In the digital world, this is the way to communicate to the world that the financial brand really does care about its customers and receive their love and loyalty in exchange. 

Check out my blog about financial and banking UX design >>