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
When banks only had haphazardly built websites that were not responsive, fintech firms did not have to struggle hard to attract customers with a mobile app built with wonderful user experience.
A number of financial institutions today have recast their retail UX, providing complete mobile functionality along with the elite 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.
- The complexity of financial services and tools
The software operating fintech services like wealth management and investments can be extremely complex and confusing when put to use. Fintech as well as insurtech demand a simple and intuitive UI design. It demands a creative design vision that can truly differentiate them from others, and the vision is nothing but a seamless user experience.
- Competing with established brand names
Fintech companies face enormous competition from established existing powerhouses like Goldman Sachs, PayPal, Citi, etc. With the arrival of Amazon, Apple and other top players which are now catering to the financial needs of their users, 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 products 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.
- Comprehensive Understanding of Technology
Modern FinTech includes a huge array of technologies and applications that can aid financial processes as well as transactions. These consist of a complex amalgamation of hardware technologies, many of which are invisible to users, like data centers that come with redundancies, conduits for dedicated telecommunications, cloud solutions, and more. FinTech apps can let users execute financial transactions within milliseconds with speed and precision.
Hence, FinTech UX practitioners must have a deep understanding of the various applicable technologies, along with their advantages as well as limitations. Allying up with bigger development teams can help fintechs understand a number of technical considerations that are imperative in creating an appropriate and exemplary user experience.
- 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.
- 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.
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. Make sure that the card number is masked when displayed or printed.
- Data Visualization
Through years of technological evolution, customers have become accustomed to viewing their private data presented in visually meaningful ways. To gain quick popularity for a fintech company, entrepreneurs need to offer users a crisp and clear visual summary of their account activities as well as microinteractions that can notify them of a task completion such as feedback pop-ups. A number of CXOs take it further offering future-ready visualizations that can depict the user activities since the beginning. Apps such as Wealthfront is the one that graphically presents its users with their investment future value letting them meddle their financial projections with easy touch inputs.
- 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 needs a lot of details from the customers. According to results of usability testing, a significant dropout rate during the process was seen. Apparently, KYC is too cumbersome, and the form completion process needed revamping. 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 get along with the app before actually trusting it.
To meet customers’ dynamic expectations, fintech startups need an inventive thinking approach. Digital transformation will become obsolete if it doesn't improve user experience. They need to collaborate with UI/UX professionals, banking UX design professionals, along with researchers with deep understanding of consumer behavior and create Fintech design solutions that sell. UX experience design services, clubbed with strategy, and flexible innovation on product offers a key to building a future-ready digital banking marketplace. Get in touch with our UX consultants to kickstart your fintech growth today.