Financial user experience: 7 tips to make it outcompeting in 2024

As we step into 2024, the financial industry faces an array of challenges that demand a reevaluation of the way users interact with financial services. Users now expect more than just seamless functionality—they crave a financial user experience that is intuitive, efficient, pleasant and, above all, tailored to their evolving needs. In this article, we delve into the intricacies of financial user experience, pinpointing seven essential tips that can elevate it to new heights in 2024.

User experience in banking (banking UX) is the combination of all emotions, thoughts and behavior of a client caused by the process of using a service/product or other interaction with a financial brand throughout all digital touch points of the entire customer journey. The banking user experience refers to the way that customers interact with a bank's digital products, services, and digital ecosystem, and their overall satisfaction with those experiences. Good user experience in banking is about making it easy for customers to access the financial services they need, and ensuring that they have positive emotions while doing so.

User experience is a dynamic process. It means that the brand reputation built over the years is not a guarantee of loyalty and can be ruined in seconds by a small element, such as a mobile app money transaction issue caused by poor banking UX design. User experience design in banking is a customer-centered process of creating a service or product to delight customers at each touch point of the customer journey and thus build a solid emotional connection with the brand.

Banking UX design is extremely important because it directly impacts the customer's satisfaction with the financial institution. UX design involves creating intuitive, user-friendly interfaces that make it easy for people to interact with the bank's services and products. A positive and seamless UX can foster trust and loyalty, increasing customer retention and revenue for the bank. A negative UX, on the other hand, can result in frustrated and dissatisfied customers who may switch to a competitor.

In today's digital age, where customers have numerous options for their banking needs, a strong UX can be a crucial differentiator for banks. Implementing UX design can help the bank stand out from its competitors and differentiate itself in the marketplace.

UX design can even increase bank profits in several ways:

• Improved customer retention. A positive and seamless UX will foster trust and loyalty, leading to increased customer retention. This will reduce the cost of acquiring new customers and generate more revenue from existing customers.
• Increased customer satisfaction. A well-designed and intuitive banking platform, website or app will make the customer's experience more enjoyable and convenient, leading to increased satisfaction and positive word-of-mouth recommendations. This can attract new customers and drive revenue growth.
• Enhanced customer engagement. A well-designed UX will encourage customers to use more of the bank's services and features, such as mobile banking and online bill pay. This will generate additional revenue from transaction fees and interest on loans and deposits.
• Increased efficiency and productivity. A well-designed UX will make it easier and faster for customers to complete transactions and access information, reducing the need for manual intervention and support by bank staff. This will improve productivity and reduce operational costs, leading to higher profit margins.
• Differentiation from competitors. A strong UX will set a bank apart from competitors and give it a competitive edge in the market. This will attract more customers and drive revenue growth.

It's vital to understand the importance, value and impact that money has on people's lives. In order to become successful, digital bank user experience needs to be fully focused on its customers’ emotions and psychology. To deliver a simple, frictionless and positive digital service we need to design user experience in banking the right way with the proper tools, mindset and shared passion of improving people's lives.

So, these seven financial UX design tips are collected from the UXDA team of financial UX experts:

1. Target user failures

One of the key struggles in the traditional approach to design banking products is that everyone is eager to make the “ideal” interface. However achieving a “perfect” result is impossible as people are very different and a single obstacle in the user's experience can completely spoil the whole impression even if the other features are perfect. That's why it's crucial to address users' pain points, this helps to avoid key problems and minimize their impact.

During the financial user experience design process, first, a so-called "key person" is identified, i.e., a perfect user of different types. The problem here is that the real life scenarios might differ dramatically from the “perfect” ones designed on paper.

There's a difference between how people see the banking products and how experts in the bank perceive the solution designed. Though top managers at banks and financial services make important decisions on banking UX strategy, often they aren't able to see it from the users' perspective. This leads to failure in considering the factors affecting bank UX. Specialists create banking products based on their own understanding of service usage forgetting that their financial knowledge usually is better than users.

All financial institutions try to create perfect banking products that seamlessly address users’ tasks. However, it's not always possible to predict the users behaviour due to the differences of such important factors as the age, preferences, occupation, residence and other context. Therefore, it is necessary to find out, and then use, the standard failure patterns.

Several independent studies confirm that the negative aspects of any action or event outweigh the positive ones in human consciousness. Nobel laureate Daniel Kahneman conducted an experiment that clearly proves this statement. He investigated people's emotions in the context of making bets.

As far as user experience is concerned, what the financial company management and staff may see as an insignificant pain point can be experienced as a large-scale problem for the user. We recommend to process “Failure Mapping”. It involves conducting banking UX testing of clients existing product, as well as other similar solutions on the market to find possible pain points discovered by users.

In case of engineering a new service, “Failure Mapping” should be integrated into the banking Customer Journey Map (CJM). As a result, you will receive a map of the key user experience problems that generate pain points in banking.

Taking into account that there can be non-standard scenarios in the interaction, the designer should not only review all the stages, focusing on the maximum conversion, but also try to understand the thoughts of a user and their intentions. At this point it would be useful to conduct tests with real users. This helps to clarify that some aspects of the interaction are influenced by the factors that the product developer cannot predict.

2. Make user experience magical

Overdensity is the worst enemy of your digital bank UX design. Too many elements will frustrate the user and ruin digital experience. Overdensity concerns not only the number of elements in interface, but also the diversity of their visual characteristics. The overcharge with multi-colors and multi-shapes will definitely create a sense of chaos. Stick to coherent and holistic aesthetics forming easy to understand design language.

When a digital service requires some action from the user it is better to divide it into step-by-step tasks instead of squeezing it all into one screen. You can use progressive disclosure in your forms or divide processes into several screens by using layers behind primary pages.

Both desktop solutions and mobile applications have already developed standards for interface solutions. They are related to user habits and accelerate the learning curve. For instance, users expect to see a profile or login in the upper left corner. The search bar in the mobile solutions should be at the top of the list.

This rule applies not only to the individual elements and their location, but also to the entire pages or functions. Ignoring usage patterns and creating something completely unusual can lead to extending the learning curve, and often to a failure.

All the interface elements may be located according to their priority for the user. It’s necessary to consider their role in the user tasks execution. So, you can determine their priority in every screen. Use different visual means for accents: font size, color, shape, icon. This will help the user to follow the sequence and interface logic intuitively. The same thing is true for the element grouping. Proper interface space zoning will help to group the elements according to the key user scenarios.

When interacting with any digital service the user builds a mental map in his mind. This map should answer how to implement a particular scenario, where to look for information, and what opportunities the service provides.

It is very important not to confuse simplification with primitivism. The simplification of the car with mechanical transmission is a transition to automatic transmission, which greatly facilitates control. Primitivism would be the transition from a car to a motorcycle or even to a bike. Of course, this can simplify the control, but the key user functions making the real vehicle value are gone.

A suitable simplification allows a user to achieve the same, or an even greater result, but with less effort and less knowledge. Often, in order to simplify the users journey it takes hard work from the ones on the “backstage” of products development. As Arthur C. Clarke formulated in his famous third law: “Any sufficiently advanced technology is indistinguishable from magic”.

So, if we go even further into the idea of car simplification, we will see a self driving car with no human involved in the driving. For example, Robinhood simplified stock trading service to make it affordable for ordinary people without brokers mediation.

3. Evoke feelings with your product

It's trendy to talk about the use of design in digital product development and banking digital transformation. But there is a great misconception about digital products that not a lot of people are aware of… Design is NOT a matter of how your product looks like. Design is about what your customer feels.

A lot of decision-makers believe that finance is all about rationality. But that's not true. Humans are economically irrational and success of digital transformation in banking depends on it. Human brain does not enjoy doing calculations and remembering numbers. And you know what? It's perfectly normal and natural because economics are NOT in human nature. We are emotional creatures! Our irrational, unconscious emotions drive 80% of our behavior.

Many believe that digital means only coding, technology, complex innovations, and other technical stuff. But if the user can’t understand your product, get some value out of it, and feel the emotional connection with it, not a seemingly brilliant marketing strategy nor a huge advertising budget won't ever save you.

We have come to a point where it's extremely important to understand that mistakes made in the financial design can lead to millions in losses. In order to prevent this and ensure the success of your digital product in the long term - bring emotions to it. Make sure your financial service is pleasant to use! As Don Norman, the father of cognitive engineering has said: "There is no need to sacrifice beauty for usability or, for that matter, usability for beauty".

The only way to create a product your users will love is to develop digital solutions using the financial UX design process and the Design Thinking approach. This provides the needed “magic” ingredients to deliver financial UX solutions that will not only serve customers according to their needs but also set up an emotional connection fulfilling their expectations.

If you look at hugely successful companies that have integrated Design Thinking into their very core you can see five times bigger Price/Earnings rates than average.

4. Create a system for a frictionless experience

The user should not have a feeling of fragmentation when using your service. Its flow should be smooth and connected. It’s essential to see the UX design of banking products as a system to ensure this. Design System could be compared to a map that guides the product developers and stakeholders through a complete collection of UX insights, UI assets, commonly used visual components, design statements and the style guides of the specific design.

The design system for digital banking user experience standardizes the principles of product vision, experience design, user interface creation, regulates the elements used and introduces consistency rules. On the one hand, the Design System should respect the particular digital platform guidelines, but on the other, create a native look and feeling uniting the service supply on all platforms.

Benefits for the customer include using of the same design ’language’ in developing range of complex banking solutions, and even adding new digital channels. This ensures the consistency of the digital bank UX design and is crucial for minimizing the cognitive load on the user.

Benefits for the business - it doesn't matter if the team members working on the project are located in various locations all around the world and speak different languages - the Financial Design System keeps everyone involved ‘on the same page’. It provides a rapid and effective solution, upscaling, and also the possibility to easily adapt to the constantly growing expectations of customers.

Advantages for the designers - it is more convenient to construct interfaces piece by piece, rather than designing all of the screens at the same time. This approach allows designers to adapt and test components to make them pixel perfect.

Benefits for the developers - the Design System allows to create an associated element code library to speed up the development process by copy-pasting similar constructs.

The Financial Design System provides a convenient and quick way to look-up elements, resulting in fast interface design without searching for specific elements or modules in hundreds of already designed screens. This significantly boosts the speed of product development.

For example, Apple have very advanced Design System which called Human Interface Guidelines and covers design principles, essentials, assets using, interactions, etc for iOS, macOS, tvOS, watchOS.

5. Study your users

Without user research, it is almost impossible to create a product that fully solves users' problems in a manner that's quick and completely understandable. The main reason for this is that the businesses and end users perceptions sharply differ. So, it's crucial for the business to get to know their customers and start feeling their pain to address it. That's the “recipe” for a product customers will love to use and recommend to others.

Every new user should be able to quickly and intuitively understand how to navigate and use the service. If the user can do that, and their first interaction is impressive enough, the user will return to use the solution again and again. Therefore, the first impression is critical.

Second, how fast can the user perform frequently used operations? With banking products, the most commonly used features are checking the balance, topping-up accounts and transferring money. If any of these features take too long or require too much effort, users will probably seek a better solution.

Third, how many errors does a user make in performing any action? In a perfect scenario, the user should be able to go through the step-by-step process without thinking twice about what needs to be done. Although it is impossible to eliminate all mistakes, we can ensure that the app assists the user in providing a clear understanding of what kind of information has to be entered in the input fields, and signaling if the user has forgotten something or made a mistake during the process.

Last but not least, how enjoyable is it to use this product? Financial products should not be only functional, it's important for them to be appealing as well, because users don't enjoy using services that look boring and outdated.

When creating a user-centered financial service there has to be a clear understanding of the aspects that either cause headaches or deliver pleasure for the customers. There are five key UX research methods that from UXDA's experience have proven to be the most effective. These methods provide the best way to get main insights from your customers experience research.

• Ethnographic research. In UXDA we are exploring the digital footprint of potential end-users. This is the so-called digital anthropology, which analyzes digital artifacts, such as tweets, posts on social networks and reviews on the App Store or Google Play for a corresponding service or topic. This gives us an understanding of how those users see the world, what their pain points are and what they are happy with. Ethnography can reduce the effect of social approval when the respondent tries to make a positive impression on the researcher. 
• User personas. To create a customer-centered product, it is important to understand who the end users are. User personas are invented characters with a precise description of their age, gender, occupation, location, income, daily life, thoughts and other details. Each user persona represents a specific type of end-user that can be defined by polls, stakeholder interviews, desk research and field research.
• User interview. User interviews are one of the commonly used UX research methods to understand users' motivations, pain points, feelings, daily routines and behavior while using various financial products. In the early stages of a product’s development, user interviews will provide insight into whether the upcoming product will be used as planned. For an existing product, it will help to understand what difficulties users have and why they use or don't use a specific feature.
• Card sorting. Card sorting is a method used to understand how users categorize information. It can be performed when creating a brand new product or when improving an existing one to make it more intuitive. During the card sorting, participants are asked to organize all content items in up to 7 main groups and then label them (like “Transaction list”, “Transfer between accounts”, “Card settings”, “Profile information” etc.).
• Usability testing. Usability testing is the best UX method to get insights about exactly how real users interact with a product. It should be performed as often as possible to test separate scenarios or the whole product.

6. Digg into irrationality

Your product team use and say the word “user” a lot. Undeniably, is it a simple term with a meaning that is clear for almost everyone. However, behind this word, there is a lot more than most people can fully comprehend─that someone who will be taking their time and effort to use your product is a real person. This person has thoughts, emotions, feelings and situations that affect their mood, with so many psychological and physiological aspects that need to be taken into consideration when creating financial product UX design.

In fact, to have a better vision and create a UX design for finance that will have a positive impact on the mind of their users, UX consultants look to proven psychological studies that reveal facts about how users perceive certain interface elements, as well as their behavior, reactions, and subconscious processes.

A big step towards providing a positive financial UX entails not only offering cool product features and nicely-designed functions, but taking a deeper look into the ones who will be using the product as a part of their daily lives. The basis of this approach is the exploration and understanding of the human mind, psychology and mental habits. Using this as the foundation for creating a pleasant and effective banking product design can and will create a serious improvement in how people perceive finances.

I recommend that you first get acquainted with the following studies that will open your eyes to the nature of the irrational in user behavior:

• Jakob's Law. Users spend most of their time on other sites. This means that users prefer your site to work the same way as all the other sites they already know. Jakob’s Law correlates with studies exploring the learning curve and consistency: how we feel better if we face familiar paths, elements and scenarios, which reduces the learning curve of a new app.
• Mental model. The foundation for the concept of mental models was first described in the 1943 book, The Nature of Exploration by Kenneth Craik, a Scottish psychologist and one of the earliest practitioners of cognitive science. In his book, the author states that the human mind creates “small-scale models of reality” and uses them to predict similar events in the future. In other words, a mental model is a representation of what a person has in mind, before using a new object for the first time.
• Response time. In fact, there has been much research done to better understand the connection between responsiveness, users’ satisfaction and ability to wait. Some of the most well known studies were conducted by Robert B. Miller in 1968, A.J. Thadhani in 1981 and Avi and Sara F. Rushinek in 1986, among others. What all of these studies have in common is a confirmation that responsiveness is the most important factor, even more important than ease of use, in terms of user satisfaction. 
• Scanning instead of reading. According to NN Group, 79% of individuals constantly scan any new page they stumble across. Only 16% of people read the entire page. Scanning is synonymous with searching.  Readers' scanning behavior can look to be pure laziness, but it is not. It is an effective method of gathering and filtering information. Readers prevent information overload by scanning. According to Jaak Panksepp the pioneer of Affective Neuroscience the Seeking system drives us to search our environment for information and stuff that will help us survive.
• Gestalt psychology. The users do love to see beautifully-made, simple and easily perceivable designs. A 2012 study by Google proved that people tend to decide if they think a website is visually pleasing within 1/50th - 1/20th of a second. A 2002 study by K. Karvonen explains that aesthetics affects the feeling of trust, and simplicity. But, what makes us feel the simplicity, visual appeal and sense of harmony in digital interfaces? The truth lies in understanding our mind and how we perceive the visual elements (gestalts) around us. 
• Hick's law. When designing a financial dashbord, often the product managers want to include it all. “Our product has so many great options and how can you not display that to the users? They will appreciate our service, right?” When faced with too many choices, users will get stuck and can often end up becoming confused, frustrated and ready to leave. The theory of Hick's Law, confirmed by FMRI studies of brain research in 2015, describes this phenomenon in a simple way: the more choices users are given, the longer it will take them to make a decision. Hick’s Law also correlates with the Paradox of Choice by Barry Schwartz, who states: More choice leads to more stress and reduced levels of customer satisfaction. Miller's Law adds that the number of objects the average person can hold in working memory is about seven.
• Priority of aesthetics. A 2001 study on users’ trust in cyberspace by expert in software development, Dr. P. Nikander, and expert in human-computer interaction, K. Karvonen, found: Quality of design to be highly among the features which enhance the feeling of trust in users when doing transactions online. It is actually quite surprising that such a rational matter as people giving their trust to a certain service highly relates to something so emotional as aesthetics and beauty of design. Another study coming from B.J. Fogg in 2001 was conducted on “Web credibility.” In this research, 2,440 people participated in viewing professionally-designed websites and gave great insights on people's perception of evaluating trustworthiness. The results of the study concluded that professionally-made design elements and features are more important than its contents.

7. Challenge your legacy

It might be surprising, but thousands of banking employees experience frustration daily when working with outdated banking back-office systems. How would you feel if your main working tool was creating problems instead of helping to solve them? And, we're talking about banking here, where mistakes literally cost money, clients, and reputation.

In the age of social media, we know for sure that facades can be faulty. Surprising or not, this applies to banking as well. Who would have thought that behind the tall glass buildings and the modern-looking mobile banking apps, there are banking back-office systems that remind us of grey and soulless solutions created 20 years ago. It's unbelievable how much struggle these systems cause ─ starting from long-lasting employee training, unacceptable mistakes, overall stress level, poor productivity, awful client service, etc.

Many banks have done a lot to improve the user experience. Digital banking has become more convenient, and now clients are able to conduct transactions and other activities via their mobile phones. Unfortunately, there are many financial organizations that disregard their employees─those who, at the end of the day, are the ones who ensure a satisfactory user experience in banking.

Manual paperwork still dominates the bank back office, even though there are thousands of customer requests that employees need to address. In the end, it not only causes system and human errors but also takes a lot of time and makes the process painful and unpleasant for their customers. What about disrupting banking business patterns and technology to create a user experience for employees that would result in customer satisfaction?

There are several key factors that contribute to a positive user experience in banking:

• Ease of use. The user interface of a banking software should be intuitive and easy to navigate, so that employees can easily find what they're looking for and perform tasks without difficulty.
• Security. Banks should implement robust security measures to protect their users' data and prevent unauthorized access.
• Speed. Time is a valuable commodity, and no one wants to spend a lot of time waiting for a banking software to load or for a task to complete.
• Availability. In today's remote working world, employees expect to be able to access their work through the cloud at any time, from any device. Employers should strive to offer 24/7 availability, as well as support for a wide range of devices and platforms.
• Visual Identity. The software should be modern and attractive in line with the ever-changing standards of modern platforms.
• Consistency. All digital services must operate not as separate elements, but as a holistic ecosystem in which everything is interconnected, has common standards of operation, a single visual language and provides a frictionless user experience.

We are living in a challenging age where everyone is rivaling to stand out and be the most innovative. But let's stop here for a moment and ask ourselves - are these efforts really valuable for the customers? They will be the judge of your product, deciding whether it's good enough, or is it possible to find something better. And this undoubtedly affects profits and market position, which is why every bank or financial organization should strive to ensure that the interface of their products provides the best possible service and experience.

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