How UX Accelerates Fintech Disruption
by Abin Thomas, on Jul 23, 2020 7:41:06 PM
Open banking disruption amongst financial institutions is ubiquitous and is going to be prominent than ever before, in this decade.Inspired by the immense success of digital-only neo-banks like Chime and digital wallets like Paytm, numerous fintech startups in the market are not only speeding up the open banking initiatives but also disrupting their traditional financial peers on innovation and technology. By putting customers at the center of every service and service module, every fintech firm today targets a simple yet ingenious user experience and design interface in unison with the latest technologies.
Hence, success today for fintech companies is defined by answering questions like what customer problem are you solving that large incumbents cannot? What differentiates you from your competitors? Can you build trust with your customers?
In this blog, we will have a look at how an exemplary UX is imperative for sustainability as well as the growth of the fintech ecosystem. Let us start by understanding some of the inherent challenges that fintech players face today:
Top Challenges of Fintechs
- Acquiring new customers
Back when banks only had haphazardly built websites that were not responsive, it was easy for fintech firms to attract customers with a mobile app built with great user experience.
Today, most financial institutions have transformed their retail user experience, offering full mobile functionality with best-in-class design principles. Great UX is now mandatory. Customers, as a result, need more practical reasons to switch to new fintech offerings, and hence acquiring new customers has become tougher than before.2. The complexity of financial services and tools
The software operating fintech services like wealth management and investments can be overly complex and extremely confusing to use. Fintech and insurtech demand a simple and intuitive UI design. Fintechs and Insurtechs need to have a design vision that others lack, and that vision is about delightful user experience.
3. Competing with established brand names
Fintech companies face enormous competition from large existing financial powerhouses, such as Goldman Sachs, Citi, or PayPal. With the arrival of Amazon, Apple and other technology companies which are now expanding into financial services, this competition is going to be tougher than ever before. A good UX will become the first step for any Fintech startup to garner the attention of the users. They hence need to differentiate their product and services by offering simple and state-of-art user experience.
Imperative Elements of Good UX for Fintech Industry
Free stuff and simple interfaces no longer work as a viable business model. Fintech now needs to find more robust ways to differentiate their offerings from their competitors. Here are some key UX elements that Fintech players must focus on, for customer retention and acquisition:
- Simplicity of Design
The Fintech revolution now needs better than the best finance management tools that enable instant mobile payments, crowdfunding, fast loans, peer-to-peer lending, and even Insurtech solutions. This can be done by understanding the significance of design thinking and creating services that are their own improved versions. Simple and easy navigation, precision of information, a handy guide or set of instructions, ensured safety of sensitive data, chatbot implementation for support etc. are few elements of a good UX. In case of neobank apps, users would need a dashboard of their spendings, balance, investment portfolio, credit scores, forecasted balance, that’ll help them plan their spendings.
Moreover, steps for customer onboarding like syncing with a bank account, adding personal info, KYC should be done in minimal steps. Instead of forced log-ins or in-app processes, you can allow users to use biometrics for logins and authentications. Datamatics recently built an easy-to-use banking mobile app for An NBFC To Drive Market Penetration.2. Comprehensive Understanding of Technology
The present-day FinTech includes a broad array of technologies and applications which support financial processes and transactions. These include a complex scope of hardware technologies, many of which are largely invisible to users, such as data centers with built-in redundancies, dedicated telecommunications conduits, cloud solutions, and many more. FinTech software applications and platforms enable users to execute financial transactions in milliseconds with speed and precision.
Hence, FinTech UX practitioners must have a sound conceptual understanding of the various applicable technologies, along with their capabilities and limitations. Collaborating with a larger Product Development team, including Technology, can help fintechs learn about the number of technical considerations involved in crafting the most appropriate and effective user experience.
3. Consumer-centric product designs
Fintech companies will need to have a bird's eye view of their consumer wants. Product centric design needs to shift to customer-centric designs, which demands comfort, accessibility, and simplicity. Cute characters, natural design elements abound, or sophisticated illustrations could be the new trend for fintechs that earlier catered to a generation that preferred tradition more than humanization. Interfaces to add emojis and a message to their friends for transactions is also something that modern fintech companies can choose to embed in their apps.
4) Formatting and localization
To offer an excellent user experience, you need to take care of formatting and localization of the app. Formatting consists of decimal number placements, date formatting, currency formats according to country or regions as per the guidelines of ISO. You can use the local date formats for each country. On the bright side, the international date format is considered consistent and is sorted well in a table.
Country or region specific formats may also include customer number, language integration, account number and bank card number. Customer numbers may be defined by a national ID number and are different in different countries. It also depends on the type of a customer: private or corporate. Account numbers also have different formats and different algorithms of generation in different countries. Bank card number is defined by ISO/IEC 7812. It is important that a card number is masked when displayed or printed.
5) Data Visualization
Through years of technological evolution, users have become attuned to seeing their personal data depicted in graphically meaningful ways. To gain quick popularity for a fintech company, entrepreneurs need to give users a clear visual overview of their financial activities along with microinteractions that can inform them of a task completion such as feedback pop-ups. Many of the leaders in the field take this one step further, providing future-facing visualizations that show the impact of a user’s actions over time. Apps like Wealthfront graphically show users the future value of their investments allowing them to modify their financial projections with simple touch interactions. Seeing a clear goal in the future gives users a compelling reason to continue to invest with the platform.
6) Building trust before getting customer action
The trust factor can be explained by a simple KYC registration process for new customers in investment processes. The form is five pages and requires a lot of information. According to results of usability testing, a significant dropout rate during the process was observed. Apparently, KYC is too cumbersome, and the process of completing the form needed an overhaul. So it is important that you offer your customers value so you can persuade them to complete the KYC. To establish that trust, you can let users try the app, make their investment decisions, and when ready to invest, complete the KYC form. In this way, users were given the opportunity to build rapport with the app.
To reach customers’ expectations successfully, fintech startups need an inventive thinking approach. Digital transformation is pointless if it doesn't transform the user experience. They need to collaborate with UI/UX experts, banking UX design professionals, and researchers who have an understanding of customers’ needs and expectations and create amazing Fintech design solutions. UX experience design services, along with strategy, mixed with flexible product innovation provides a key to building a future-ready digital banking marketplace. Get in touch with our UX consultants to kickstart your fintech growth today.