UX strategy in banking & financial services in 2018 - time to walk the walk!

Tom Evans
5min read

As we roll into 2018 thoughts inevitably turn to the big themes that we might expect (and hope) to see for user experience in the financial services industry this year.

2017 certainly had some great highlights as challengers banks and fintechs in particular started to up the ante - we highlighted some of these in our 11:FS 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 the Payment Services Directive 2 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, since 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 start-ups. As such, it will certainly be a tough year for fintechs whose apps only service a single proposition or use case - it is 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.
It will certainly be a tough year for fintechs whose apps only service a single proposition or use case

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 as well on some of the more frustrating and time consuming elements of many current banking and financial services experiences. In particular, on-boarding 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.

Effortless Saving

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. https://www.acorns.com/) 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, the 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 pro-active 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).
Who wouldn’t want their own private banker available 24/7, for free at the touch of a button to help you manage your finances better?
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 themselves are also planning to launch their 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 are a business owner - less so if you are one of the high street banks who hasn’t started delivering new solutions for this underserved market.
In general, the current user experiences for business banking are pretty woeful, often lagging a long way behind its retail counterparts

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 is certainly not the same as simply pushing existing banking products or services to a shiny new mobile app.
"Design that matters most, is design that solves real human problems” - Michelle Morrison, Design Program Manager at Facebook

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 is 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 upon the experiences offered by the older exchanges too, but there already appears to be a new breed looking to surpass them, such as the beta app from decentralised exchange, NVO.
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
For those less interested in trading per se, then it seems inevitable that there will be a gradual assimilation of cryptocurrency services into their existing day-to-day digital apps and experiences. Revolut for example have recently added the option to buy cryptocurrencies within their 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 pretty appalling, their new Joined Up Banking app sounds as though they 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 in Pulse!

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 then be sure to get in touch and we would be happy to give you a demo. Tom Evans is the UX Director at 11:FS. To get in touch, follow him on Twitter, LinkedIn or drop him a line tom@11fs.co.uk. For more information about our research team and the research projects we can deliver, drop us a line. To find out more about 11:FS Pulse, visit the website, or contact us for more details about how you can access this fantastic research and insights tool.