2017 certainly had some great highlights as challengers banks and fintechs in particular started to up the ante (highlighted in the 11FS Pulse ‘best of 2017’ awards). How might they continue to evolve and improve their customers’ digital experiences? And what should those incumbents playing catch-up be focusing on too, as these new challengers (along with open APIs under PSD2 and Open Banking in the UK) start to threaten their historical inertia and market share?
Who can walk the walk?
For the most part, it will be interesting to see how some of the new UK challenger banks can start to walk the walk. We heard plenty of talk about a revolution in banking, but now is the time for them to take advantage of their shiny, new tech stacks, because 2017 felt like they were just warming up. Meanwhile, some of the traditional high street banks will no doubt be looking to cannibalise the best UX and services from challengers and other fintech startups. As such, it will certainly be a tough year for fintechs whose apps only service a single proposition or use case. It’s probably more likely that they will instead assimilate themselves with the new ‘marketplaces’ that Starling and others offer, rather than trying to go head to head with them for the attention of a similar target market.
Removing friction from the customer experience
There will continue to be a focus on making everyday financial tasks simpler and easier for customers within their web and mobile banking apps. This isn’t just cleaner, more focused user interfaces and considered micro interactions that help streamline key user journeys (although those are good too!), but a focus on some of the more frustrating and time-consuming elements of many current banking and financial services experiences.
In particular, onboarding and authentication journeys have started to become increasingly streamlined with the use of biometric authentication and easy in-app uploading of KYC documents, or video calls with customer service representatives to open new accounts. For login and authentication, this means no more forcing customers to remember PIN codes and convoluted passwords, or use those damned PIN entry machines (assuming you can remember where you put it!). As such, we will see a sharp rise in such technologies as they become both a user expectation and ‘table stakes’ in 2018.
On the same basis, I’d expect to see more banks starting to add services to their apps that help customers save and invest more easily. One such mechanism could be auto-roundups (e.g., Acorns), where any spending is rounded up and then automatically invested on behalf of the user. Similarly, providing users with the ability to easily create virtual ‘pots’ (as the likes of Bunq, Monzo and Starling now offer) means that they can safely put money to one side and away from their day-to-day finances. These pots could even be shared with family or friends (for example, a couple saving for a mortgage deposit, or students pooling money to pay monthly bills).
Anticipatory design and intelligent assistants
Anticipatory design and intelligent assistants will deliver smarter, more personalised experiences to help customers manage their finances better. I’ve already written about the potential benefits of anticipatory design for financial services, so won’t go over those again here. To summarise, however, anticipatory design (aka predictive UX) is a term coined by Aaron Shapiro, CEO of Huge, and relates to the design of automated experiences and services that learn and adapt in order to help remove inertia and complexity from the decision-making process. When coupled with advances in AI and a smart adoption of insights from behavioural economics, they can provide the foundation for genuinely personalised and truly digital banking.
There are risks with anticipatory design if implemented badly, but used well it could better deliver the experience of a proactive digital money manager, or intelligent assistant, that help customers to better manage their finances by learning from their past behaviour and spending habits. These intelligent assistants can then guide them accordingly, and in context, to better financial decisions by simplifying decisions and removing complexity (or even automatically making some of the more trivial decisions on their behalf).
Think of it as the logical next step in the evolution of the humble PFM (in that it doesn’t just tell you what you’ve spent, but instead learns from this information and then actually serves it up in easy ‘bite-sized’ pieces of actionable information or suggestions). Who wouldn’t want their own private banker – or the banking equivalent of Google Now – available 24/7, for free at the touch of a button to help you manage your finances better? A smart financial service that can predict what a customer is going to need or do, before they do, and provide them with nudges accordingly.
The potential of such services becomes even more compelling when you consider the opportunities from PSD2, whereby multiple bank accounts could be aggregated into this single, smart digital bank for more intelligent analysis, guidance and a holistic view of their finances.
SME/business banking becomes the new UX battleground
In the same way that challengers such as Monzo and Starling have started shifting expectations about what the next generation of digital banking can deliver in terms of UX, there are new challengers such as Coconut, Penta and Qonto in Europe, looking to disrupt user experiences in the small business and SME space, while Starling itself is also planning to launch its own business account.
In general, the current user experiences for business banking are pretty woeful, often lagging a long way behind its retail counterparts. With PSD2 and open banking, accounting packages such as Xero and Quickbooks can also see new opportunities to place themselves even more firmly into the centre of a business’s financial management, by abstracting away banking from the banks themselves and into their services for a less fragmented experience.
Exciting times if you’re a business owner – less so if you’re one of the high street banks who hasn’t started delivering new solutions for this underserved market.
Innovative UX and design will come from a focus on people, not products
Truly innovative design within the financial services industry will emerge through a shift in focus from products or services to the everyday money management challenges that people and businesses face. By utilising research frameworks such as ‘Jobs To Be Done‘ and the forces involved in switching to a new product, we can uncover these everyday problems and points of friction. From here, we then have a much broader and more informed starting point from which to innovate, by focusing on the most common and/or underserved challenge (aka ‘opportunity’). This is as much about service design as it is UX design, and it’s certainly not the same as simply pushing existing banking products or services to a shiny, new mobile app.
User experience will be critical to cryptocurrency adoption
It feels inherently foolish to speculate on anything cryptocurrency related, especially given that the market appears to have started 2018 in a typically turbulent fashion. However, one thing does seem clear: if cryptocurrencies intend to reach wider mainstream adoption as either a speculative asset or payment alternative, then the barrier to entry needs to be significantly reduced from a usability and user experience perspective.
Consider, for example, Coinbase – it had a hugely successful 2017, with tens of thousands of new users signing up every day. There are obviously a number of factors that contributed to its popularity, but it’s hard to ignore its brilliantly simple and intuitive user experience that stripped out much of the complexity and frustrations of the older exchanges.
While centralised exchanges such as Kraken and Bittrex may be impenetrable in terms of UX to many new investors curious about bitcoin, buying your first satoshis via Coinbase is not. Other newly launched exchanges such as kucoin have improved a little on the experiences offered by the older exchanges, but there already appears to be a new breed looking to surpass them, such as the beta app from decentralised exchange, NVO.
For those less interested in trading per se, it seems inevitable there will be a gradual assimilation of cryptocurrency services into their existing day-to-day digital apps and experiences. Revolut, for example, has recently added the option to buy cryptocurrencies within its app, while others such as the potential Telegram ICO have much more ambitious plans for the users of their messaging service …
Some high street banks (might) finally get their act together
While HSBC’s current mobile banking is appalling, its new Joined Up Banking app sounds as though it might be one of the first high street banks in the UK to bring something to market that could genuinely challenge (or at least keep up with) the likes of Monzo and Starling. We’ve not seen it in action yet, but look forward to doing so and rating it!
And last, but not least …
A personal note – the start of 2018 will also see 11:FS launch the latest version of 11:FS Pulse, our financial industry UX benchmarking platform. If like us and our clients, you want to stay on top of all the latest innovations and UX trends within the financial services industry, be sure to get in touch and we’d be happy to give you a demo.
– This article is reproduced with kind permission. Some minor changes may have been made to the text to reflect BankNXT style considerations. See more 11FS content here. Image by f_s, Shutterstock.com