How design thinking can transform user experience in wealth management

Design thinking is, at its core, a process of empathizing with the user. The methodology has been successfully used in many industries to drive human-centred innovation, resulting in the creation of pioneering products like the first mouse for Apple. In recent years, it has become increasingly popular in the financial industry and big financial players such as the likes of J.P. Morgan, Citibank, BBVA, Allianz and DBS Bank use it to enhance their client experience and stay relevant in a rapidly evolving market. In this article, we will explore how design thinking principles can elevate product design processes.

Key benefits of design thinking for banks and wealth managers:

-       User experience enhancement: Design thinking emphasizes the importance of user experience in product and service design. By deeply understanding users' needs and pain points, firms can develop innovative experiences that better meet users' expectations. A redesigned online investment platform boasting a simplified interface, streamlined navigation and personalized features can for example lead to better client engagement, increased adoption rates and higher client retention.

-        Innovation and differentiation: Design thinking encourages a culture of innovation by fostering creativity, encouraging diverse perspectives and promoting experimentation. It allows banks and wealth managers to differentiate themselves and stay ahead of the competition by developing unique value propositions and launching disruptive products, such as a digital offering tailored for a younger demographic, incorporating personalized experiences and social elements.

-        Process optimization: Banks and wealth managers operate in a complex and highly regulated environment and often deal with legacy systems and processes. Design thinking can help firms identify inefficiencies, find novel ways to reduce unnecessary complexities and streamline their operations. The resulting cost savings and efficiency gains can in turn be redirected towards better serving their clients.

Different studies show that the benefits of design thinking translate into quantifiable business value, too. The Design Value Index, a market capitalization-weighted index comprised of design-driven companies such as SAP and Nike, outperformed the Standard & Poor’s 500 Index by 211% from 2004 to 2015.[1] Companies in the top quartile of the McKinsey Design Index meanwhile achieved 32 percentage points higher revenue growth and 56 percentage points higher growth of total returns to shareholders than their industry counterparts over a five-year period, according to a 2018 McKinsey & Company report.[2] And a Forrester study concluded that IBM’s design thinking practice achieved a return on investment of 301%.[3]

Implementing design thinking

User interaction and client co-creation form the backbone of product design strategy. Banks’ product design teams should champion a user-centred way of working based on the design thinking methodology. This includes applying a six-step framework to identify pertinent user needs, gaps and new opportunities. This strategy empowers the team to co-create tailor-made, innovative and scalable solutions for clients and product users.

The key stages of the recommended framework are:

-        Frame a question: In collaboration with product teams and clients, a bank’s product design team should facilitate a co-ideation workshop to understand the project focus, which user groups should be targeted and – where clients are involved – their vision and strategy. This sets the initial direction for the following steps.

-        Gather inspiration: Research should be conducted to develop a strong data foundation to support the ideation phase. The product design team should apply various research methods to identify user wants, needs and pain points, understand the current market offerings (when possible) and determine gaps and new opportunities.

-        Generate ideas: In a co-creation session, product design and product teams as well as clients should come together again to define key focus moments and generate ideas to address them. Here, a “moment” refers to an interaction with a product or service with the potential to create a memorable and impactful user experience.

-        Make ideas tangible: Based on the ideas generated in the previous step, prototype requirements should be defined, and designers should set out to create an initial visual representation. Prototypes bring ideas to life and enable the crucial “test to learn” step of the design thinking process.

-        Test to learn: Here, the usability and desirability of the prototype are put to the test. Usability tests should be conducted with relevant target users to identify design strengths and weaknesses and validate whether the prototype addresses user wants, needs and pain points and generates the desired outcomes.

-        Share the story: Finally, the prototype and findings are presented to product teams and clients to align on and define next steps. These could include revisiting steps of the design thinking process, follow-up scoping, deciding on minimum viable product (MVP) requirements or pre-project planning for the new solution.

Design thinking as a key driver of client and user satisfaction

The adoption of design thinking offers significant benefits for product teams, banks and wealth managers. It can lead to more seamless interactions, greater trust and engagement, and ultimately higher client and user satisfaction. The importance of these factors cannot be underestimated in an era where incumbents, fintechs, neobanks and challenger banks are all vying for market share and clients are more willing and empowered to switch providers than ever before.

While traditional banks and wealth managers continue to benefit from a loyalty bonus over their newer competitors, there is no room for complacency. Integrating design thinking into solutions will help banks and wealth managers offer their clients the best user experience and respond rapidly to their changing needs.

[1] Design Management Institute, “2015 dmi: Design Value Index Results and Commentary”; 2016.

[2] McKinsey & Company, “The business value of design”; 2018.

[3] Forrester, “The total economic impact of IBM’s design thinking practice”; 2018.