The Future of Every Bank Depends on Digital Excellence

Customers demand seamless, intuitive, and personalized banking experiences, with 72% emphasizing personalization as “highly important,” and 77% of banking leaders agreeing it boosts retention. Yet, financial institutions face outdated systems, strict regulations, repetitive interfaces, and growing cybersecurity threats. This article explores the tension between the urgent need for next-gen, customer-centric financial products and the hurdles financial brands must overcome to deliver them.

The Call for Next-Gen Digital Banking Products

A Chase survey found 62% of consumers can’t live without their mobile banking app, with 78% using it weekly. Despite advancements, many digital banking platforms still offer clunky and non-intuitive interfaces. Cisco AppDynamics reports that 68% of 13,000 global consumers find poor digital experiences disrespectful, with 57% giving brands only one shot to impress. Moreover, 60% blame the app and brand for digital service issues.

McKinsey's survey highlights that Fintechs and neobanks release new features every two to four weeks, while traditional banks have cycles of four to six months. The average age of universal bank IT applications is 14 years, compared to three years in digital banks. Fragmented digital ecosystems in banks lead to disjointed customer experiences, as users navigate multiple platforms for different services.

Urgent Need to Meet Customer Expectations

Customers expect seamless, personalized, and integrated digital experiences, with 73% of global interactions with banks now taking place digitally. Financial companies must exceed these expectations to retain and attract customers. Fintech companies and big tech firms raise the bar with innovative, user-friendly, and highly personalized digital services. McKinsey found that 41% of retail consumers plan to increase their Fintech product exposure.

Emerging technologies like AI, ML, and blockchain are revolutionizing financial services. Banks must harness these technologies to offer real-time, predictive, and secure banking experiences. McKinsey estimates that generative AI alone will deliver an additional $200 billion to $340 billion annually.

Digital excellence is a critical differentiator for any modern business, defined as the best use of digital systems and products to achieve the strategic goal of thriving in the digital age. It can help financial brands quickly adapt to market changes, emerging technologies and rising consumer expectations. This flexibility is crucial for responding to new regulatory requirements, changing customer preferences and technological advancements. The need for digital excellence in finance is obvious, but the following hurdles need to be overcome:

• Customer Experience. Providing a seamless customer experience is challenging due to diverse user needs, inconsistent interfaces, and evolving technology. Complex, unattractive, and non-intuitive financial service interfaces result in customer dissatisfaction and potential loss.
• Operational Efficiency. Outdated legacy systems, scalability issues, and slow transitions to automation lead to inefficiencies, increased costs, higher error rates, and slower service delivery, impacting customer satisfaction and profitability.
• Data-Driven Decision Making. Poor data quality, fragmented data sources, and slow real-time processing hamper actionable insights, trend forecasting, and timely decision-making, resulting in missed opportunities and suboptimal service offerings.
• Innovation and Adaptability. Slow adoption of Fintech partnerships, difficulty integrating new technologies, and navigating complex regulatory landscapes hinder offering cutting-edge financial services, leading to a competitive disadvantage.
• Accessibility. Overlooking accessible digital services leads to non-compliance with standards and exclusion of users with diverse abilities, resulting in regulatory penalties and a damaged reputation.

10 UX Design Steps to Ensure Digital Excellence in Finance

Creating an exceptional digital banking experience requires understanding both user needs and the evolving landscape of financial technology. Here is a short guide to achieving digital excellence in digital services, based on the experience of UXDA experts in the design of more than 150 financial products in 37 countries:

Step 1: Align Digital Service Strategy with Business Strategy

Aligning the digital service strategy with overall business objectives ensures digital initiatives support broader goals, driving innovation and growth.

Key Actions:

• Conduct market analysis to understand industry trends, competition, and areas for differentiation.
• Synchronize digital initiatives with business priorities, ensuring stakeholder agreement.
• Allocate resources, including budget, technology, and talent, to support digital service strategy.

Step 2: Know Your Users and Build Empathy

Understanding your users through detailed personas and empathy maps is crucial for successful digital banking initiatives.

Key Actions:

• Conduct user research via surveys and interviews to create detailed personas representing key user groups.
• Develop empathy maps that demonstrate user pain points, preferences, and financial habits.
• Use these insights to inform design decisions.

Step 3: Map the User Journey

Creating a detailed Customer Journey Map (CJM) helps understand user interactions at each stage, highlighting critical touchpoints and emotions.

Key Actions:

• Develop a CJM covering all stages of user interaction.
• Identify key touchpoints and potential pain points.
• Align business objectives with user needs for a seamless experience.

Step 4: Align Conceptual and Mental Models

Designing the user interface to align with users' mental models ensures an intuitive and familiar experience.

Key Actions:

• Conduct card sorting exercises to understand how users categorize information.
• Design a simple, intuitive information architecture.
• Minimize cognitive load and simplify navigation.

Step 5: Develop User Flows

Transform user scenarios into detailed user flows that outline steps to complete key tasks, ensuring logical and efficient interactions.

Key Actions:

• Create Low Fidelity (LoFi) user flow maps for essential scenarios.
• Validate flows through user testing and feedback.
• Refine user flows based on insights.

Step 6: Design Detailed Wireframes

High Fidelity (HiFi) wireframes visualize interface layout and interactions, ensuring usability and ease of navigation.

Key Actions:

• Develop HiFi wireframes for critical screens and interactions.
• Conduct usability testing to identify issues.
• Iterate designs based on user feedback.

Step 7: Establish a Key Design Concept

Create a visual language and style that aligns with your brand’s identity and evokes the desired emotions.

Key Actions:

• Create a mood board to define visual direction.
• Develop a key design concept integrating UX and UI elements.
• Ensure alignment with design trends and standards that resonate with users.

Step 8: Design UI for User Flows and Screens

Translate conceptual designs into functional, interactive visual elements that users will directly engage with.

Key Actions:

• Incorporate design principles enhancing usability and accessibility.
• Ensure predictable and familiar user experiences.
• Maintain visual consistency across screens and touchpoints.

Step 9: Prototype and Test

Build interactive prototypes to test functionality and design, using feedback to make necessary adjustments before final development.

Key Actions:

• Create interactive prototypes using tools like Figma.
• Conduct user testing sessions to gather feedback.
• Iterate on prototypes based on testing results.

Step 10: Implement a Design System

Develop a comprehensive design system for consistency and scalability, serving as a blueprint for developers and designers.

Key Actions:

• Create a UX/UI design system with strategy, components, style guides, and principles.
• Ensure easy accessibility and usability by all team members.
• Regularly update the design system with new insights and trends.

Conclusion

Financial institutions need digital excellence to thrive. Customers demand a seamless and personalized experience, while Fintech and new technologies are disrupting the industry. By embracing digital excellence with no compromises, financial brands can provide an intuitive user interface, gain valuable customer insights, automate processes, and offer innovative financial services, all of which lead to increased customer satisfaction and a competitive edge.

Achieving digital excellence in next-gen banking involves more than simply adopting the latest technologies or mimicking successful Fintech innovations. It's about creating a holistic, user-centric approach that prioritizes seamless, intuitive, and personalized experiences for customers. Financial institutions must transcend the superficial adoption of digital trends and commit to genuine innovation that addresses the unique needs and expectations of their users.

The journey toward digital excellence requires overcoming significant challenges ─ from outdated legacy systems to fragmented digital ecosystems. It demands a strategic transformation that integrates emerging technologies like AI, ML, and blockchain to deliver real-time, predictive, and secure banking services. This transformation is essential not only for operational efficiency but also for enhancing customer satisfaction and loyalty.

Next-gen financial brands need a dedicated focus on user experience, operational efficiency, data-driven decision-making, and relentless innovation. By moving beyond a copycat approach and truly understanding and addressing the needs of their customers, financial institutions can create digital banking experiences that are not only functional but also delightful and engaging. This holistic approach will not only retain existing customers but also attract new ones, ultimately driving growth and success in the competitive financial landscape.

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