Banking Innovation: Do Not Let Your Mindset Stop You

Our perception of the world is determined by the rules instilled from childhood. And often, this mindset becomes an obstacle to innovation in banking service design. Many simply do not notice the opportunities that open up in front of them. And those who have broken the usual rules and look at the world differently have an advantage. And we see this in the digital financial services market as well. Let's break these rules today!

Banking innovation in digital financial services provide brand new, different, or cutting-edge customer experience. Next-gen financial services can help banks and financial organizations better serve their customers and differentiate their brand from competitors. However, having worked for 8 years only on UX design of financial services developing more than 100 products in 36 countries, my team is constantly faced with the fact that most of the limitations in improving products are not somewhere outside, but within banking specialists.

It is obvious, that banking innovation make it easier, faster, and more secure for customers to manage their money, make financial transactions, and make financial decisions. Then why is the implementation of customer-centric innovations in banks so slow, and sometimes even sabotaged? We detected 7 well-known rules that work well in everyday life and at the same time can subconsciously create resistance to the necessary innovations in the financial sector. Check yourself and your colleagues:

1. The Grass isn’t Always Greener on the Other Side

Of course, modesty is embellishing, and envy is a bad feeling, but it's quite the opposite in creating innovative banking products. You have to constantly look at the other side and seek better ideas to provide a delightful customer experience. Look at your competitors, some of the best examples in the industry, get inspired by them and go even further.

Do you want to make an excellent banking product? Why not learn from the convenience of Amazon, the coziness of Starbucks, the innovation of Apple, and the beauty of Ferrari?

Somewhere out there is sure to be green grass that will show you the way and motivate you to break through. For example, Venmo was deeply inspired by social networks. It allowed friends to quickly and easily split bills and shared users’ transactions in a friend’s newsfeed, similar to those on social media.

2. If it ain't Broke, Don't Fix it

This may apply to your TV, but not when it comes to the design of the best customer experience. Here, innovation and improvement are the drivers that fuel growth.

Don't be afraid to disrupt the status quo to improve the world. Finding a better solution to established processes requires creativity and using the first principle. Re-invent your financial product using up-to-date technology and an innovative approach to address the most common user failures and pains. The world as we know it today would not exist if Steve Jobs had not reinvented the cell phone. Now to get information, a service or a product we don't need to look for a computer, we just take our smartphone out of our pocket and press a button.

For example, Klarna has taken good old-fashioned credit and morphed it into a digital product that, unlike credit cards, does not require scoring and does not affect a user's credit score. As a result, embedded BNPL credits, which are easy to use, have revolutionized the market and launched a new megatrend in the financial industry.

3. Never Mix Business With Pleasure

Many believe the financial industry is ruled by calculation, greed and money, leaving no room for humanity or emotions. It's time to break that stereotype. Look at Fintech; they are gaining millions of customers at the speed of light because they offer care, simplicity and convenience. They want to benefit people, and these are the kind of entrepreneurs who are truly passionate and in love with their business, thereby energizing their team as well. Clients and colleagues feel alike and share this passion.

It's silly to waste our life on stuff that has no meaning or joy. Find out exactly how your product can help people, improve their lives and breathe meaning into it. Add creativity to your product, make it unique and innovative, and it will bring fun back into your work. After all, doing something significant and exciting is always more enjoyable.

Look at Sir Richard Branson; his passion for products and people is legendary. As Branson writes in his book, The Virgin Way: Everything I Know About Leadership, “Fun is one of the most important - and underrated - ingredients in any successful venture. If you're not having fun, then it's probably time to call it quits and try something else.”

4. Stay in Your Lane

Minding your own business is not bad advice because no one likes upstarts, especially those who do not quite understand where they are going. But, when it comes to the development of new products, there are always more questions than answers. And those who aren't afraid of seeming like silly upstarts can discover unexpected and interesting solutions.

Go beyond, experiment, try new ways, and look for new opportunities. Get inspired everywhere; the broader your horizons, the better. Elon Musk constantly breaks this rule and explores new horizons. He decided to conquer space even though he had little experience with it, and he succeeded.

For example, Apple added Apple Pay and is now connected to the aforementioned BNPL trend, after realizing that integrating it into the company's product ecosystem would greatly enhance the value proposition for their customers. This is how the largest electronics company in the world became a prominent newcomer in the financial industry.

5. More is Better

Let’s add more features, and even more features, and just a little bit more. If our competitors have 100 functions in their product, we need 101. We all see the victims in this race - complex and incomprehensible products that frustrate users. Let's move away from quantity and think about quality. What exactly do the users need, what do they use, and why are they with us?

We all know from psychologists that human attention is limited to seven elements. That's why it's important to find the right focus and not over-feature the offer in the product. Products with thoughtful and intuitive interfaces are in high demand. Users don't like the paradox of choice; they just want a solution to a problem.

For example, Robinhood took a trading service, discarded a bunch of complicated trading charts, tools and settings and simplified it, making investments available to millions of ordinary people.

6. Do unto Others as You Would Have Them Do unto You

It's a simple rule that I always try to follow in life. But, in the case of product design, it plays a cruel trick on us. After all, it's important that the product takes into account what the users know and want, and this often differs dramatically from your skills, especially in a field as complex as finance.

Many people design a product for themselves, to their own taste, because they think that the people around them have the same experience and knowledge, and therefore it will be just as easy for everyone to figure it out. This cognitive bias is called the curse of knowledge. And only by researching and communicating with others can key inconsistencies be identified.

For example, the owners of a financial service once came to us complaining about low demand despite the advertising, beautiful design, and that the product was perfect for them. Research showed that their clients do not understand the service. They have a different mental model. After the redesign, the demand increased sharply.

7. If You Want Something Done Right, You Have to Do it Yourself

On the one hand, designing a product internally gives you more control. On the other hand, the worst bank products I've seen were designed by internal teams. The problem is that, with blinded eyes, it's very hard for us to detect and capitalize on new opportunities.

Many of the best products around are made by outside designers, architects and engineers. This is because these professionals accumulate a tremendous amount of experience and knowledge, looking for cutting-edge solutions for different brands. Their search is not constrained by the established framework of the company and the accepted rules of work.

For example, we had more than ten clients who tried to create a digital product for their financial service several times before coming to us. They spent a lot of time and money, but each time they were dissatisfied with the result. Using UX design methodology, UXDA employees helped find the right answers and designed a solution that pleased both the users and business owners. But, it required product owners to change their mindset and transform the usual business model.

Conclusion

People are often so used to rules that they are not even aware of their impact. As a result, many products are developed at roughly the same level: average. But if you want to offer your customers something above average, something that surpasses the competition, you have to break those internal constraints. I encourage you to break the rules to unleash your creativity in digital service design!

To create a user experience that empathizes first and foremost with the user's problems and needs, you need to define your company's priorities and constraints. Do we try to develop innovative services to improve the user experience and provide a simple and enjoyable solution, or do we focus on fast but average delivery?

Focusing on the user will also lead to impressive turnover figures in the long term. But focusing only on speed and cost is likely to be a big disappointment because the 'foundations of the digital house' are incomplete - they lack the cornerstones of human values: empathy, care, and serving.

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