Designing for Improved Banking Customer Experiences
by Seven Peaks on Jan 31, 2024 2:59:23 PM
Over the past 10 years, Jeremie Tisseau has been a driver in developing and nurturing the tech and design communities in Bangkok through events such as Mobile Mondays, BKK WEB Meetup, and UX Happy Hour. In May 2022, Morphosis joined forces with Seven Peaks to offer end-to-end digital services to help clients transform their businesses and grow positively. Now as our Chief Design Officer, Jeremie shares his insights on how to design and develop for better BFSI customer experiences in this expert spotlight.
“Design isn't just art. It also needs to have a purpose and function, and should help businesses achieve their goals.”
There are many opportunities for the Banking, Financial Services and Insurance (BFSI) sector to become more user-centric and stand out from their competitors in a saturated market. BFSI applications are being used on a daily basis, and in Thailand there is currently less focus on the users than in other, more advanced regions - it's quite focused on the business and pushing out their products. In this article, we’ll discuss the roles of the Design Thinking process and UX/UI design in understanding and improving the overall Customer Experience (CX), and how this can unlock massive value for BFSI sector companies.
Ever-increasing Expectations From Financial Services Customers
The more customers' expectations grow, the more they make purchase decisions based on the customer experience they receive. A study conducted by Forrester Consulting on behalf of CSG shows that the main consequences of failing to deliver a positive CX are:
- Decreased customer retention (60%)
- Decreased sales (57%)
- Loss of company revenue (57%)
- Poor brand image (50%)
Although companies currently amass extensive customer data, there's often a lack of knowledge on leveraging it for service and customer experience (CX) enhancement. To deliver an optimal CX across their services and products, companies need to incorporate a design-driven approach and user-centered thinking into their business processes and organizational mindset.
A staggering 90% of businesses encounter failure. This primarily stems from not understanding the problem statement or an insufficient commitment to comprehensively grasp its nuances. Occasionally, the root cause lies in the absence of a genuine problem, as organizations find themselves erroneously attempting to address non-existent challenges, thereby exposing themselves to substantial financial risks and potential losses in investment. Unraveling the intricacies of problem definition is pivotal for corporate resilience and success in a dynamic business landscape.
Frequently, inadequate design integration during the financial product creation process has resulted in detrimental outcomes. These repercussions include a lack of market demand for the financial product, user rejection, surpassing the development budget, or even the product not being launched. This poses a significant risk for any company that neglects to incorporate user-centered thinking across all levels, from internal culture to every aspect of processes and operations.
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UX Design for BFSI
In the evaluation of digital solutions offered by banking software vendors, a critical consideration lies in the UX (user experience), which plays a pivotal role in retaining customers within the banking ecosystem. To identify the primary UX risks involved in designing the optimal banking software, we can discuss the following key issues.
Lack of User-Centricity
Banking software development teams are predominantly composed of skilled engineers who often emphasize technical prowess over user-centric design. In this culture, where technical expertise is prioritized, the integration of UX architects and UI designers as user advocates is frequently overlooked. This technical orientation may result in a lack of empathy within the team, hindering the development of user-centered financial solutions. Addressing this challenge requires a clear understanding of the end-users and their intended experience, necessitating collaboration with UX architects possessing expertise in a variety of domains.
While banks traditionally select software providers based on technical capabilities and offered functions, an excessive focus on functionality quantity (what we refer to at Seven Peaks as “Outputs”) may overshadow the importance of service usability. Users prioritize usability over a multitude of functions. The user experience should be at the forefront throughout the entire bank-software vendor chain, prompting a shift from emphasizing sheer functionality to prioritizing user-centered solutions. Leading banking software vendors recognize the importance of simultaneously delivering a strong end-user experience and business value. At the end of the day, good UX doesn't just look at creating great experiences for users but also is able to monetize these experiences for the long term (what we refer to as “Outcomes”). We don't just build things for users for the sake of it. There's always a business interest behind it; either better retention, engagement or direct revenue for the business, rather than merely providing additional functions.
The prolonged development timelines and substantial investments involved in complex banking software projects may result in solutions that are already outdated upon release. Adopting a modular development approach allows for more agile implementation and accommodates the evolving needs of different banks and their customers. However, challenges may arise when this approach clashes with the intricate requirements of large banks, leading to potential integration difficulties.
Omni-channel banking platforms aim to offer universal solutions, yet this objective may not align perfectly with every need and use case of banks and their end-users. While the focus of IT vendors remains on creating a stable backend, the user interface and experience may be constrained within those standard solutions. Recognizing the importance of reflecting the bank's image and ensuring customer loyalty through optimal UI/UX, leading banking software vendors provide customization options, utilizing advanced Design Systems to adapt to the specific needs of each bank.
The development of a universal ready-to-use banking solution necessitates complexity to cover various user scenarios. Balancing this complexity with a simple and enjoyable user experience for every scenario poses a considerable challenge. Moreover, accommodating new elements post-implementation may lead to negative UX outcomes, including information architecture complexity, navigation challenges, increased learning curves, cognitive overload, and user frustration. Careful attention must be paid to the intuitive and scalable nature of the banking software's information architecture.
In good UX Design, there are also personalizations and optimizations. Similar to what holds true for e-commerce, you should try to look at your users’ interests and push customized content to these targets. Banks should try to learn more about the types of behaviors they see, what is driving them, and be more contextual when using that information to apply to changes or features they want to develop.
In Thailand, many companies try to offer everything to everyone, causing information overload. Instead, BFSI companies should try to clearly identify who their customers are, which services they may be most likely interested in, and then subsequently target those who would be most interested. Offering too many options in an impersonal fashion sacrifices the user experience. Failing to understand your customer behavior can lead to unwanted content on the screen, and too much content makes it hard to find what you're looking for, which creates a broken user experience.
Can you renew your card through your mobile banking application? What about changing your PIN code? If people look at these detailed aspects of the user journey, they could potentially make a lot of improvements that are likely to result in even greater value. The barriers are in bureaucracy, with top-down hierarchy that focuses on outputs over outcomes. They don’t ask about what the users want; and they don’t take the time to define the problem statement properly. They’re mainly interested in getting projects shipped and appeasing the associated benefactors. It should be more user-centric, and should focus on creating an exceptional user experience to get users to come back more often.
“Capturing more market share is done by focusing on the users. It requires more effort and time, but it will eventually yield a higher return – especially in the long-run.”
However, in Thailand, companies are usually focused on the short-term. Granted, there always needs to be a business goal as well, beyond what the users want. Sometimes the business goal can be to gain more users, or it can even be building a community.
A good example is with email, when Gmail created threads - a product that was a direct result of focus on the problem statement. Google was able to innovate because they solved a real user problem. Before Gmail, every new email created was isolated on its own - with a history of related messages if the user took the time to copy the previous messages into the reply. You had to manually try to find previous email conversations in your inbox and try to patch everything together in your mind to make sense of it. Google truly understood and defined the real problem statement: it is hard to find all emails related to the same conversation in your inbox. As a result, Google decided to group all related emails into a single thread. This revolutionized email as we know it, and the outcome had even further impact than in the individual product, Gmail. They were then able to build on top of an ecosystem, integrating newer digital products such as Google Calendars and Google Docs.
Design Thinking in the Banking Sector
In the banking sector, design thinking can be an effective creative and problem-solving tool to address your customer needs and can offer innovative solutions if used well. This methodology proves invaluable for crafting financial products, services, and experiences that are both user-friendly and efficient. By leveraging design thinking, banks and fintechs can enhance their ability to cater to customers, ultimately setting themselves apart in a competitive market by focusing on identifying and solving real life problems.
The application of design thinking not only fosters improved customer experiences but also empowers financial institutions to identify and resolve challenges through innovative means, thereby boosting operational efficiency. Its significance in the banking sector has grown, emphasizing its role in understanding customer needs, behaviors, and pain points. The primary objective is to translate this understanding into the development of innovative products, services, and experiences that better align with customer requirements.
Design thinking in banking manifests through various methodologies, such as user research, clear problem statement creation, journey mapping, and key personas, which deepen the understanding of customers and inform the creation of more intuitive and user-centric financial products and services. Ideation and prototyping, essential components of design thinking, enable financial organizations to generate and test ideas rapidly, identifying innovative solutions to complex issues.
Moreover, design thinking encourages collaboration across different departments and stakeholders within banks, as well as with external partners like fintech startups and customers. This collaborative approach dismantles in-house silos, fostering the creation of innovative solutions that meet the diverse needs of all stakeholders.
The benefits of incorporating design thinking in banking include:
Improved Customer Experience
Placing customer needs and preferences at the forefront of the design process results in the development of user-friendly and effective products and services.
Design thinking aids in identifying and eliminating unnecessary steps and processes, streamlining operations and enhancing overall efficiency.
The iterative nature of design thinking facilitates rapid testing and refinement of ideas, increasing the likelihood of developing successful, innovative products and services.
Improved Risk Management
Actively seeking diverse perspectives and testing and iterating on new ideas allows banks to mitigate the risk of introducing faulty products or services to the market.
Enhanced Teamwork and Collaboration
Design thinking fosters collaboration and co-creation among team members, cultivating a culture of innovation and cooperation within the organization.
The process of designing digital financial products unfolds in five steps – Empathize, Define, Ideate, Test and Validate. The Double Diamond model further illustrates this journey, with the first diamond focused on the "Problem" — collecting data through divergence and prioritizing key insights through convergence. The second diamond, centered around the "Solution," involves diverging to explore all possible solutions based on extracted insights and converging on a prototype that is subsequently tested and delivered according to predefined criteria. First get to know the users, then you define.
The diamond shape signifies a divergence in pathways, followed by convergence, then iterated again and again with testing and validation – true to concepts of Agile, which aims to iterate and fail as fast as possible in order to arrive at the validated and impactful features or solutions that make a worthwhile difference.
Growing Digital Value for Customers
First, it is important to define target personas not by demographics, but by user purpose. We can then use Value Proposition Design and the Design Thinking process in our design discovery. Here, we spend a worthwhile amount of time and effort into considering the solutions, the ideas, and ultimately the anticipated product that we envision with our client. If the ideas are able to solve the identified pain points then we call that product-market fit.
Agile Development and Design Thinking are incompatible with linear execution, which is forced when undertaking a waterfall approach.
We try our best to avoid it because it completely defeats the purpose and advantages of what we are trying to achieve.
The waterfall model is a traditional and linear approach to software development that follows a sequential, phased progression through various stages of the project. It is called the "waterfall" model because it visualizes the software development process as cascading through distinct phases, with progress flowing in one direction, much like a waterfall. Each phase must be completed before moving on to the next one, and it's challenging to go back to a previous phase once it's finished.
It’s impossible to bring the value that we exemplify with Agile Development and Design Thinking into the archaic structure of waterfall project management. What we want to drive for our customers is for them to empower their teams to set their own KPIs, which are aligned with their business goals. They can come up with their own ideas and then fully take responsibility for achieving their vision. Vision should be brought down to the execution level. Most clients still ask to use a waterfall model, and once that is set, we cannot challenge the system – it forces us into the linear mode of development. Then both us and the client are at a significantly higher risk of diminishing returns on our investments. We should not promise on the scope of work, however, we should be delivering on outcomes. Not a specific output.
An example of an output for someone who wants to learn French would be: “I want to finish a French language course within this quarter”. On the other hand, an outcome would be: “I want to be able to communicate at a basic level when I travel in France in two months from now.” An outcome focuses on what matters most: being able to communicate in the language I am trying to learn.
In the waterfall model, you have a PM-defined scope of work and a plan to execute towards an output, rather than to execute on attaining any outcomes. Many companies still apply a top-down approach, pushing their assumptions down to the execution layers. We only want to encourage companies to set clear business goals and objectives and then try to empower their team to come up with their own processes and solutions; but they need to be accountable for helping the company to reach their objectives. Thus, the company comes up with business outcomes and the teams can come up with product outcomes which support these business objectives. The way and manner used to test and validate their assumptions and solutions is up to them. This type of setup encourages a more progressive, innovative, and user-centric environment – and typically yields better results. Here is how we approach the Agile model in a graphical representation:
A good case study is HSBC, who is a global leader both from a market-perspective and organizational perspective. One of the key reasons for their success is that they talk to their users and really understand their customer’s journey. HSBC understands what businesses need and offers solutions that enable them to do all their banking operations online without having to ever talk to an agent. As a matter of fact, you can't even contact an agent, effectively reducing their operational overhead. This is only possible because of the in-depth research HSBC conducted to really understand how businesses operate, as well as the types of tools they need to run their business online. The online solution, executed perfectly, responds to this user need. You can do every single action you ever need to do with your bank, fully digitized and without contact. It is simple to use, intuitive, and doesn't require much training to learn to use. It reduces the need to physically enter a bank branch, minimizing user frustration and becoming an excellent example of effective user-centricity in the BFSI industry. In Thailand, we are still early as far as user-centricity is involved, and we want our clients to focus more on the end-to-end customer journey.
Outcomes are able to generate the output that we’re going to work on, which is the intersection of Business Viability, Feasibility, and Desirability (UX/UI). In this way, the Outcome should define the Output, not the other way around.
Big companies are changing, there is more maturity in the market and still, companies struggle to correctly implement Agile Development and Design Thinking.. What they need to do is learn and innovate. BFSI companies were forced to learn because of the threat of blockchain companies and fierce competition, but they are not quite there yet.
“It's all about bringing value to the users.”
Innovation is cultivated through an approach that transcends traditional hierarchies. A great example can be seen with AspireApp—an ideal model of a fully digital bank revolutionizing the landscape of user experience. By achieving a detailed understanding of genuine user challenges, particularly in the domain of corporate credit cards, Aspire App has epitomized the essence of customer-centric innovation.
The conventional apprehension associated with sharing credit card details with employees is a real concern for business proprietors. Having personally encountered the ramifications of such vulnerabilities—wherein an employee had misused sensitive information—underscores the gravity of the issue. AspireApp, cognizant of this critical pain point, addressed the challenge by enabling the creation of multiple business credit cards online for different employees with different level of control for each. This not only mitigates the risk of potential misuse upon an employee's departure but also streamlines the process, eliminating the fraught path to reimbursement as is experienced with traditional banks.
A hallmark of AspireApp's ingenuity lies in its granular control mechanisms. The platform empowers business owners to establish credit cards for individual employees, predetermine budgetary limits, and even curate a list of authorized merchants. This detailed control extends to specifying platforms for transactions, like Facebook and Google. The imposition of a cap on the number of authorized merchants further enhances security, ensuring that any transaction beyond the prescribed list necessitates direct approval.
The discerning approach demonstrated by AspireApp in comprehending the intricacies of user needs and pain points, coupled with the provision of a well thought-out solution, highlights its efficacy in problem-solving. As a testament to its innovation capabilities, AspireApp has not only addressed the prevailing challenges in corporate credit card management but has also emerged as a beacon of user-centricity and forward-thinking in the realm of digital banking.
It’s short-term versus long-term; in the short-term, we might lose market share - building an end-to-end solution that adds real value. Let’s build something that the users actually want, something that has true product-market fit. The way we do that is by improving on all our processes, not just by going after product outputs. We can take inspiration from more mature markets like Singapore and Hong Kong – which will show that there are a lot of things for Thailand to learn and improve upon. And we’re here to help our clients be able to deliver that.
Building Better Customer Experiences
To enhance our strategic approach, it is essential that we engage in more frequent customer interactions, conduct thorough research, and meticulously scrutinize and analyze data. This necessitates a seamless integration of research findings and data insights into our decision-making processes. The product team cannot just make assumptions based on what they feel, they need to look at data and test and validate on that. Design should be done the same way. We need to look at the data, online surveys, market research, quantitative and qualitative reports, feedback into the product team, removing bias, removing assumptions as much as possible.
Elevating the customer experience (CX) goes beyond mere product enhancements; it demands a holistic comprehension of users and a transformative approach to processes. To truly enhance CX, one must delve into the intricacies of the end-to-end customer journey, scrutinizing every phase for potential frustrations, pain points, and unmet needs. Focusing solely on refining the user interface of a consumer application, such as streamlining an insurance claim request, proves insufficient if the subsequent internal processes, like claim approval timelines, remain cumbersome.
A comprehensive optimization strategy necessitates a systemic examination of the entire journey, ensuring that each component aligns seamlessly to augment the overall customer experience. The realization that a superior application alone falls short of achieving optimal CX underscores the imperative to fortify internal processes. This entails not only technological enhancements but also a commitment to cultivating a customer-centric culture within the organization.
A critical aspect often overlooked in this journey is the training and support mechanisms for personnel, extending even to agents. Simple yet invaluable skills, such as effective communication with users, play a pivotal role in shaping the customer experience. Consequently, an organization's investment in training initiatives becomes indispensable, fostering an environment where every team member is adept at engaging with users in a meaningful and empathetic manner.
The pursuit of a superior customer experience mandates a profound understanding of the end-to-end process, encompassing both external-facing applications and the intricacies of internal workflows. By adopting a design thinking mindset, businesses can unravel latent opportunities for improvement, ensuring that innovation resonates not only in product interfaces but throughout the entirety of the customer journey.
In the contemporary banking landscape, customer experience assumes paramount significance, particularly amid the digital era's pervasive influence. A detailed examination reveals the pivotal role customer experience plays in shaping the dynamics of the banking industry, illustrated by the following desirable outcomes:
Positive customer experiences function as the foundation in fostering loyalty and retention. A seamless and satisfying encounter with a bank establishes a basis for enduring customer relationships, mitigating the chance for attrition.
In an increasingly competitive banking landscape, the delivery of an exceptional customer experience emerges as a potent differentiator. Banks that strategically prioritize customer satisfaction gain a formidable competitive edge, undoubtedly surpassing competitors that neglect this crucial aspect.
A bank's positive reputation for great customer service serves as a beacon for attracting new customers. Word-of-mouth endorsements and online reviews hold substantial influence in the decision-making processes of individuals seeking banking services.
Trust and Credibility
Within the banking sector, the establishment of trust stands as a foundational imperative. A positive customer experience becomes a cornerstone in building and sustaining trust and credibility, which are crucial elements in nurturing enduring customer relationships.
Reduced Customer Churn
A strategic focus on customer experience addresses issues or problems promptly, ensuring customer satisfaction and, consequently, minimizing the rate of customer churn.
Brand Image and Perception
Customer experiences are intricately tied to the perceptions of a brand. Positive encounters contribute to a favorable brand image, while unfavorable experiences can inflict reputational damage, underscoring the critical role of customer experience in shaping brand perception.
Cross-Selling and Up-Selling Opportunities
Satisfied customers represent a strong opportunity for exploring additional product or service offerings. A positive customer experience acts as a catalyst for cross-selling and up-selling, affording banks opportunities to augment their revenue streams.
Investment in a positive customer experience yields long-term cost savings. Satisfied customers exhibit less reliance on extensive support, filing complaints, or engaging in costly dispute resolution processes.
Adaptation to Changing Customer Expectations
The evolving nature of customer expectations, particularly in the digital realm, necessitates an agile response. Banks attuned to prioritizing their customer experience are better equipped to navigate changing expectations and are able to seamlessly integrate new technologies, thereby increasing the ability for ongoing leadership in the market.
Feedback for Improvement
Careful monitoring and analysis of customer feedback and complaints offer invaluable insights for continuous enhancement. Utilizing this feedback, banks can identify areas of weakness and enact changes, perpetuating a cycle of continuous improvement in the overall customer experience.
Our main advantage is that we work for many clients as an agency - now currently over 400 and counting. So, we’ve seen the solutions that work well for other clients, and it's part of our process - we’re quick, we’re lean, and we’ve seen the framework through first-hand experience. We work much faster than other companies, and attributing our expertise in design and development, we’ve gotten very good at what we do. We are able to implement a lot of things for our clients, we set their systems to execute faster, we help them with design processes, and ultimately, we try our best to positively help our clients grow both internally and externally in order to achieve the outcomes they desire.
Chief Design Officer
As a thought leader in UX design in Thailand with over 17 years of experience, Jeremie turned a small web design agency into one of the leading UX design consultancies in Thailand, offering diverse services including product design, design thinking, user research, UX/UI design, conversion optimization, SEO, and copywriting for a wide range of international and local clients, including Mastercard, Agoda, Prudential, BCG, Bitkub, Luma, Central Group, JP Morgan, TTB, SCB, KerryExpress, FoodPanda, Ascend, and many more.