Ten UX Design Trends in Digital Banking

Let's go beyond common digital banking trends and highlight the significant impact of design in the financial industry. In this article I review 10 UX design trends that are innovating digital financial products and reshaping principles of how financial interfaces are created and perceived by users. The focus is on driving innovation in banking to improve customer experience, increase efficiency, stay competitive, meet regulatory requirements, and drive growth, showcasing the transformational power of financial UX design in addressing these areas.

The world is rapidly changing, and so is the financial industry. Customer expectations are growing along with the necessity to satisfy them. Truly great financial products are based on great usability in sync with specific user needs inside a well-developed digital ecosystem. In this article, we will explore the power financial design has in searching for banking innovation ideas. 

1. Tailor-Made Design

When it comes to creating digital financial products, for the past 20 years, there has been a deep-rooted belief that the role of design is minor. Mostly, design has been perceived as packaging that is nice to have for marketing purposes, while the main emphasis has always been placed on the functionality and features of the products.

This kind of approach explains why it's common practice to use standardized design templates (aka “bootstrap” design) to speed up and facilitate the product development process. Unfortunately, this also explains why many financial services seem so similar─typically plain, boring and user-unfriendly.

A decade ago, the perception of design was disrupted by the emergence of Fintechs. They dared to be different by maximizing the power of design potential to attract customers.

Today, we can witness an even broader paradigm shift. The new players that enter the financial industry deliberately focus on unique and innovative design that communicates and highlights their brand identity.

Most customers are tired of boring and complex financial design, typical of the incumbents. Tailor-made design is a brand-new idea, providing users with something fresh and invigorating. This marks a new era of tailor-made design as a trend that skyrockets the market advantage of financial companies.

The advantage of the tailor-made design is used more and more often among different kinds of financial services, as it enhances the emotional connection between the brands and their customers.

The financial institutions (FIs) that dare to break taboos and invest in creating bold and modern designs that stand out know that this will definitely pay off with increased customer loyalty and engagement.

Takeaway

Create a digital product interface that's unique in accordance with the visual identity of the financial brand. This will make the digital product delightful and allow it to stand out among the growing competition.

2. Super-App Design

The industry transition to a mobile-first approach led to the emergence of several Fintechs whose main advantage was the mono-functional approach. In a very simple and understandable manner, they offered to solve a specific user problem. For the customers, this was like a breeze of fresh air compared to the multifunctional but complex and full-of-friction banking services. Solutions created by Fintech instantly stood out with their pleasant user experience dressed in a modern and uplifting interface design.

Right now, open banking is broadening the range of possibilities to connect external services that allow the increase of functionality in any financial product. We can cite Revolut as a great example of banking innovation idea here that's constantly scaling its functionality to gradually become a financial super app.

The Fintech mono-functionality design approach seemed simple for the customers, but, as expectations grew, so did the need to present more functions in the same manner. How do you display more than 100 features in a way that's intuitive and pleasant for the user?

Digital financial solutions are becoming more and more complex, providing better functionality to the customers, but it's not a simple task to design them in such a way that would prove enjoyable to use. This is where close collaboration among UX architects and experienced UI designers plays a major role.

Digital solutions are constantly evolving. More and more well-thought-out multifunctional services are emerging that provide great usability and are able to conquer the UX of mono-functional mobile applications. The main design challenge is to provide a friction-free experience by creating an intuitive product architecture and a logical, user-friendly interface layout. 

Super-app banking design fits dozens of banking features into a single app by using the top technology trends, such as blockchain, gamification, nudge theory, robo advising, voice processing, biometrics, social integration, personalization via banking AI, big data, open banking API and digital cloud. 

There needs to be an understanding of how to maintain a balance between user needs and the ability to satisfy them in an effortless and user-friendly way. From our experience, there have been situations in which financial brands aim to include a ton of “modern” functions in their products just because they believe it will make the solution stand out among the competition, while this might actually have an opposite effect, leading to user disappointment because of frustrating design.

In such cases, during the UX research phase, these FIs should determine that their customers don't require most of these modern functionalities but are seeking other features important to the specific audience of this brand. As a result, hugely successful financial products are designed based on the specific needs of the brand’s audience that provide extra value to the customers.

A super app approach that's based on a clear vision of the financial product, and the role of UX in it, marks a pathway toward the endless possibilities of scaling the future potential of both the product and the financial brand.

Takeaway

Learn the best practice from super app designs and get ready to scale your product while maintaining simplicity and usability.

3. Back-Office Design

Many people not connected to the banking industry would probably be shocked to see what most of the banking back-office solutions look like. Working with those could be compared to coding, as the employees have to work with several software programs simultaneously, following instructions and manually entering codes in order to use the required function.

To learn to operate such a system takes a few months. But, even years after working with it, employees still get confused and keep a notebook with the right number and letter combinations by their sides. It's a fact that these solutions are very complex, as there are huge lists of different kinds of data about the customers.

Banks are investing large amounts of money in digital transformation in order to improve the user experience, while cutting the costs of the core banking system leads to significant damage to customer service. Bank employees’ negative experiences affect service quality and end-customer satisfaction. Improvements in the back-office system could lead to a meaningful increase in service quality and speed, resulting in happier, more satisfied clients.

Today, when the user-centered design approach is becoming more and more popular in creating financial products, it can be applied not only to the external banking products but to the internal solutions as well.

To ensure customer-centricity at all levels of the financial organization, the needs of the employees must be considered as well as the client. By creating a better design, we provide them with motivation and tools to offer a better experience for the bank's customers.

For example, one way to significantly increase employee engagement and productivity is to design core banking solutions by using gamification as a banking innovation idea. It's an outdated belief that gamification and banking have nothing in common. This kind of design approach allows the transformation of the entire work process by making it more modern, and motivational.

Takeaway

Translate huge amounts of heavy data into human language. Reduce employees learning curve from several months to a few hours through intuitive and easy to use digital interface. Decrease the potential of human error, ensuring a huge increase in service speed, employee productivity and customer satisfaction. Try to apply gamification elements to refresh the design of the most boring financial products to motivate end-users.

4. Full Experience Design

Only ten years ago, mobile apps were perceived as additional, alternative banking channels, but today they serve the majority of customer requests. Given this fact, it's surprising that often the mobile channels have very limited functionality and offer a rather poor customer experience.

For example, to select transactions using filters, customers are forced to use the desktop solution. Why is it still not available in every bank app despite the fact that similar functionality is provided every day when shopping in online stores?

It's even more surprising that several banking services are still only available at branches. The pandemic highlighted the harsh truth of the situation: the financial industry is unprepared to embrace the digital age. Under those conditions, it seemed absurd that people had to risk their health just to visit a bank branch. What makes this situation even more unfortunate is that all the necessary technologies to avoid such situations are already available for the banks, but, for some reason, they are not utilized to guarantee a full remote service.

To significantly improve the customer experience of the financial brand, FIs can perform a full design audit of the mobile app to ensure remote users have access to the full range of services and features, and if not, brainstorm a plan to secure it in the near future.

Leading Fintechs do not search for excuses, but use a design approach to deliver best-of-class remote experience to the customers. Optimization of user flow made it easier for users to navigate through the app, exploring new possibilities and encouraging them to use it more often, instead of contacting the bank or visiting the branch.

Takeaway

Find the missing functionality for your mobile solution and provide it.

5. Non-Legacy Design

More and more traditional banking incumbents are daring to step out of their legacy and challenge themselves to embark on a thorough digital transformation journey. Inspired by Fintechs, the incumbents empower the potential of UX design to create products that wow their customers and motivate them to stay loyal in the digital age long run.

To do that, they team up with external and internal UX and UI designers who help to integrate the design approach at all levels of the company and the culture of the financial organization. The "fresh blood" of the design-focused teams ensure a successful, user-centered digital transformation that results in customer loyalty.

Adopting a design-first principle can significantly enhance the development of a world-class digital experience in banking where legacy systems often hinder innovation and user satisfaction. The design-first approach emphasizes the importance of user experience (UX) and user interface (UI) at the very beginning of the product development cycle. This strategy can lead to more intuitive, efficient, and engaging banking applications.

Implementing a design-first approach in the development of banking applications requires a cultural shift within the organization, moving away from legacy thinking and processes. Invest in design talent, collaboration between departments, and adopting tools and methodologies that support iterative design and development. With these efforts, banks can overcome the limitations of legacy systems and create digital banking experiences that meet and exceed the expectations of today's users.

Takeaway

Operate from the design-first principle by stepping out of the legacy to design a world-class digital experience.

6. Ecosystem Design

Often, products provided by a single financial institution might differ visually, depending on the digital channel. This kind of fragmented approach is often caused by the fact that the products have been developed by different teams of developers and designers over different periods of time, based on different vendor solutions. This causes high fragmentation within the customer experience as the usability, information architecture and the interface itself differ.

It might not harm the financial institution from the inside but will probably increase the customers’ frustration and digital friction and could result in them switching to another financial company. This is because customers expect the brand experience to be a connected, holistic flow and not separate fragments. Fragmentation breaks the customer journey by causing a lot of struggle and confusion.

The main problem is caused by the lack of a united vision that would include all of the products and services provided by the financial institution. This is often due to the fact that digital channels are considered an alternative or additional form of service delivery. This was true many years ago but no longer.  Stats show that, in recent years, digital has become the main delivery channel, and its popularity keeps on increasing. The COVID 19 lockdown proved it by showing no mercy.

Customers expect all of the channels to be equally well designed, communicating the same visual brand language and usability patterns. It shouldn't matter which of the platforms customers use. They all need to be holistically united to ensure consistency across all channels.

Takeaway

Use design to unite company products into a consistent ecosystem that overcomes service and organizational silos.

7. Design System

In order to create a well-functioning digital ecosystem, it's essential to base it on a proper design system. When it comes to financial services, the design system is especially important to ensure a rapid and consistent digitalization due to the complexity of such products.

In some cases, design files can be compared to the pieces of a puzzle. If they are not sorted out and arranged, it can get very messy and frustrating to create the “bigger picture.” When it comes to huge financial digital services that consist of thousands of screens developed by several hundred professionals spread over different continents, a carefully thought-out approach is needed.

How do you maintain the consistency and usability of the design when working on a project that has thousands of puzzle pieces that need to fit at the right place and in the right time?

Technology is evolving, competition in the financial market is rapidly growing, and consumer expectations are changing so frequently that digital products need to be improved daily to meet the customer needs and expectations.  As digital financial services differ from many other products with their complexity, such a continuous need for iterations and improvements can turn into a mission impossible. Therefore, design systems come to the rescue, helping to organize all of UX/UI guidelines, assets and the overall vision of the product development so that all of the teams involved are always on the same page.

An innovative UX/UI design system ensures consistency across the platform ecosystem, resulting in a quick and effective handover of the UX and UI deliverables to the developers so that they can start working on it immediately. It also ensures that everyone working on the project is on the same page and can easily develop the product further in their specific field of responsibility.

Takeaway

Take design further than interface and visual identity by transforming it into a language that establishes rapid and effective product development by using a design system.

8. Warm-Hearted Design

People are used to perceiving banking and finance as something formal, complex and often "cold and boring". It's no wonder as the financial products often communicate such a vibe. However, as we are living in a fast-paced world filled with different kinds of emotional messages on social media platforms like Instagram and TikTok, the contrast between finance and the rest of the world seems even more striking.

The role of the media has changed. Previously, it was aimed to please advertisers, but today it's all about providing people with value. In the digital paradigm, technology brings businesses closer to the consumers through transparent, honest and personalized communication.

Why would it be any different when it comes to finance? The new generation of financial services is using this knowledge to their advantage.

It often seems that the banking industry is afraid of emotions as if it would somehow reduce their notability. In fact, it's actually the opposite. Emotions are the language that resonates with people and makes them feel heard, understood and cared about.  Currently, receiving empathy and care from brands is more important than ever.

Emotions allow users to make intuitive and quick decisions. We use cognition to understand and interpret our world, while emotions catalyze decision making.

It's important to remember that our financial products are used by living people, not robots, so the solutions should evoke positive emotions in order to create a bond. This banking innovation idea can be performed in different ways, often in tiny details and nuances that some designers don't find relevant. Examples are color schemes, icons and animated and eye-catching illustrations and interfaces.

Visual effects and microinteractions convey emotions, leading to a greater engagement from the users, than, for example, static elements and plain information.

When it comes to credit, emotions such as stress, frustration and even fear might arise. Often the customers are faced with an informal, impersonal or even cold attitude that seems to exacerbate the situation. To turn this around we can, for example, design the animated character as a supportive figure to guide the user through the process. It can be powered by AI and explain the credit score, provide personalized advice, making the user feel safe and cared about.

Many financial companies fear that, by using informal, emotional designs, they will look frivolous in the eyes of the customers. There is a justification for that because there might be designers who lack understanding of the overall functionality of the product and brand's identity, and come up with a design that doesn't correspond with the financial brand. However, if the product design is based on the business goals and user expectations, it can become a powerful and unique asset of brand identity that creates a remarkable market advantage over financial solutions that lack soul.

Takeaway

Don't be afraid to be informal in financial design, perceive users as friends and build an emotional connection with them through design.

9. Innovative Design

There's no doubt that mobile apps dominate the market today. It's hard to tell when this situation could change and what would be the new top tech to replace the mobile channel. Maybe it will be Chat GPT powered AI companions, maybe Apple Vision Pro headsets, or maybe brain chips from Neurаlink.

Anyway, it's essential for financial companies to follow the development of the future products in order to gain innovative ideas and be prepared for this banking innovation when it enters the mass market. New platforms require a different design approach, and this development has the potential to become a serious industry challenge if not explored in time.

In the near future, we will see Bank 4.0, the experience era of banking, as financial influencer and famous futurist, Brett King, puts it.  The banking experience will be integrated into the real world through digital technologies and will not require traditional apps to use.

Of course, it will take several years for those technologies to be properly developed; however, when it's done and these becomes mainstream, we can expect the market to be shaken with the same impact as it was with touchscreen devices a decade ago.

In order to prepare, it's crucial that FIs start viewing their products through the lens of the future, already generating ideas and design concepts on how to improve the customer experience in the near future.

Takeaway

Think about the perspective of product innovations in the near future to be ready at the customer experience level.

10. Purpose-Driven Design

In the past, design teams in financial companies were considered the creators of packaging and advertising materials. Their work usually started when the product had already been created, and there was a need to sell it. The modern design approach is antipodal to that.

In the digital world in which we live, design itself is an approach that creates an experience based on user expectations and needs. As this experience is directly dependent on products and customer service, design becomes an integral part of the business processes. We can integrate a design approach at all levels of the financial company.

If we look at it from an even greater depth, it's possible to turn the design into the company's ideology, a cornerstone of the business DNA, as Apple did. Their specific design philosophy reflects the principles of their world view and identifies authentic ways to convey this ideology through their products, ads and bonding with the customers. This explains why Apple has established such a global impact with its products, deservedly becoming the world's first trillion-dollar company.

Challenger companies have demonstrated the ability to scale design to the level of the company philosophy. In this case, design defines the essence of the financial business.

The company cannot be separated and exist without design. This is when the design reaches its maximum impact, defining the business advantage through a unique strategy and implementation.

Within such a business philosophy, a product or a service primarily becomes a representation of the company's world view. This greatly increases the value that the customer receives and, at the same time, requires much more responsibility from the company. Not every entrepreneur dares to take this kind of risk because, in this case, design is directly related to the company's reputation.

Such company ideology can be embodied in its app, website and even the media appearances and statements by its executives. This could be demonstrated on a regular basis through action, and not only words, thus building a tribe of followers around the idea.

Takeaway

Look at design as your business ideology though your business purpose. What perspectives and opportunities does this open up, and what can you do to realize them?

Conclusion: Leverage the Impact of Design

Design plays a critical role in banking innovations. Good design can help to make financial products and services more user-friendly, convenient, and appealing to customers, which can drive adoption and usage. 

Financial products and services can be complex, and good design can help to make them more intuitive and easier to understand for customers. It can help to create a seamless and enjoyable user experience, which will increase customer satisfaction and loyalty.

Good design can help to make financial products and services stand out in a crowded market and differentiate them from competitors. Of course, customers may be hesitant to try new technologies, but good design can help to make these technologies more accessible and easy to use, which can facilitate adoption.

For a long time, design has been perceived as the surface, while, in reality, it's the very depth. The world is changing at the speed of light. Brand-new technology is constantly emerging, opportunities are broadened, and communication becomes more transparent, brave and emotional. When such possibilities open up, it comes with a great responsibility and a pressure to utilize them.

Source from the UXDA blog (+images) >>