DIGITAL BANKING INNOVATION DESIGNED THROUGH EMPATHY

Keith Rowling, MD UK & Ireland, First Data

Keith Rowling
Keith Rowling

All banks want to be the first in the industry to bring new innovations to market that make customers change their habits, abandon existing loyalties and adopt their new products or services. However they need to go beyond the obvious attributes of mobile enablement and cloud-based delivery. When developing solutions to attract millennial customers, the specific attributes of a product or service that will attract them must be considered. To get to that outcome, these organisations need to truly get inside customers’ heads in order to understand what will appeal to them.

Rapid mobile adoption

The speed at which people have embraced smartphone devices has sent banks, retailers and other organisations clambering to develop new mobile-centric offerings. Whilst this seems like the right reaction – and is absolutely essential for customer retention and growth – there is a risk that the assumptions organisations have made in their innovation processes will not be accurate. To be truly successful, gaining adoption in this new digital world requires “customer delight and advocacy” which can only be achieved by understanding precisely what customers need and nailing the execution of solutions to meet those needs.

Today, more than half of the world’s population owns a mobile device. So it’s no surprise that mobile is fast becoming the only channel for customer engagement and interaction. In the financial industry, global mobile banking users are predicted to more than double from nearly 0.8 billion in 2014 to nearly 1.8 billion in 2019.

In order to remain competitive, most banks now offer mobile solutions to attract customers who want to check balances, make payments, transfer money and dispute transactions via their smartphone. Mobile banking does also have significant operational benefits for banks – reducing transaction costs, operational costs and resource needs as well as the number of ATMs and bank branches to maintain. But the banks need to create solutions that will satisfy the next generation of customers, the ‘digital natives’.

Making assumptions can be costly

Most organisations listen to the feedback they get from their customers, but feedback must also inform how they develop digital solutions. New digital innovations must be developed with the customers’ needs in mind.  Yet many organisations still develop solutions by making assumptions early on about what their customers want. Products are advanced that they think their customers will embrace and widespread adoption is anticipated. The speed at which new solutions can be implemented is often what takes precedence, but this is a short sighted strategy. Without customer engagement, it is impossible to truly learn how to solve problems.

To successfully innovate, you need to understand and deliver what the customer really needs, rather than assuming what they want. It’s important to ensure that you continue to engage with the customer, allow the process to evolve, and then deliver the best solution that best solves their need.

Design thinking crucial to success

True success is achieved when overall organisation goals are aligned with recognised and validated customer needs. The critical component for developing needs-based solutions is Design Thinking – achieved by tapping into what customers really need .This results in the development of needs-based solutions that can improve adoption rates, enhance loyalty, establish trust, increase revenue and reduce costs.

Design Thinking empowers organisations to put themselves in the shoes of their customers’. By employing empathy, rather than assumptions, to the design of digital solutions organisations can create new innovations that really resonate with their customers.

The empathy approach should be adopted very early in the product development cycle, allowing banks to learn fast what their customers need whilst having the time to change direction if the original idea doesn’t resonate with customers – which not only saves time but also costs. Design Thinking is a concept that translates into innovative solutions that customers have already validated.

With Design Thinking and the empathy-based approach, you know up front why customers do things, what is important to them and what their real needs are. It drives a more focused product innovation strategy that ultimately removes time and cost from the process. It leads to innovation that customers will actually need, value and adopt.

First, financial institutions should find a partner to help them undertake a Design Thinking project. With help, banks can employ the empathy-based approach and work together to understand the true challenges their customers face. Banks that do so are at a distinct advantage; as the competition continues to make assumptions about what customers need, those taking a Design Thinking approach will rise more quickly to the top and attract new customers that become the ultimate champions of the brand, products and services.

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