Putting the Customer First: The Rise of User-Centric Design in Banking

Hilary Stephenson, managing director of digital user experience (UX) agency, Sigma.

Recent changes in the financial sector, such as the upsurge in digital-only banks and the implementation of open banking, have greatly increased competition between financial services providers. In the wake of this sea-change, forward-thinking organisations have begun to realise that, for many customers, user experience (UX) is as much a differentiator as price or brand loyalty.

Until now, digital UX has largely been somewhat overlooked in the banking market, with established brands dominating solely through the power of their name. However, the prevalence of ‘disruptive’ service providers like Uber and AirBnB, has led to an increased demand for consumers to manage their finances digitally, highlighting to banks the importance of optimising their online and mobile offering. As a result of this we’ve seen a sharp rise in digitally-focused challenger brands, such as Monzo and Tide, disrupting the financial services sector.

The influx of these new players, which deliver products and experiences with the customer at front of mind, has cast new light on the benefits of the banking sector adopting sleek, user-centred, design principles.

The rise of user-centric banking 

At its heart, UX design is about the improvement of products and services to enhance user satisfaction and deliver a better experience. Applying this to the banking sector, positive user experiences can be achieved by matching customer’s distinct financial and customer service needs with systems that are intuitive, effective, and easy to use.

Advances in technology, such as the smartphone, have driven a wave of digital transformation in the banking sector. But until now, UX hasn’t really been prioritised, meaning banks generally have been offering the same services – and the same frustrations.

Because of this inactivity, smaller, innovative banking providers have been able to steal a march on their more established competitors by designing their products and services with customer needs front of mind from the outset. Specifically, digitally-focused fintech brands, such as Atom and Monzo, have analysed the day-to-day banking issues customers face, and designed their services from the ground up to mitigate these issues.

Recent research from EY suggests that positive strides are being made in this area, with 85% of executives at traditional banks citing digital transformation as a key growth area this year. Despite this, more needs to be done if the high street brands are to keep pace with the more agile fintech start-ups. 

How UX is transforming financial management 

In terms of how user-centric banking translates into the services we use, the most interesting use-cases seen thus far focus on creating greater transparency between banks and customers in order to alleviate consumer anxiety and build trust.

Here is a selection of notable examples we’ve seen: 

Enabling greater control over our finances – Excess expenditure is a perennial issue for banking customers who are looking to save, or even just maintain control over their financial lives. This is why mobile banking platforms, which go beyond the traditional monthly statement, are gaining popularity among customers who struggle with the age-old question of “how can I avoid spending too much?”.

Many forward-thinking fintech providers now offer money management functions with detailed spending breakdowns, which allow their customers to effectively budget and manage exactly where their money is going. In the future, we could see this go even further with more widespread adoption of financial safety nets such as automatic savings transfers, warnings against upcoming payments, and safe-to-spend limits.

 Positive friction – This may initially seem an odd inclusion; after all, user friction is exactly what we as designers generally aim to avoid.

In certain cases, however, friction can be used as an invaluable design tool to improve the user experience. For example, late-night impulse spending can often be a source of regret and anxiety for customers, with many waking up the next morning wishing they could revoke their purchase. This is backed by research from the Money & Mental Health Policy Institute, which found that this impulse spending is particularly prevalent in sufferers of mental health impairments such as Bipolar Disorder.

An example of a forward-thinking provider designing against this is Monzo’s implementation of a late-night spending “safety net”, wherein users are provided with a summary of any purchases made after a certain time the previous day (say, 11pm), along with an option to review and cancel certain purchases before the funds leave the customer’s account.

Not only does this go a long way towards increasing trust between customers and their banks, but there is also the important ethical consideration of safeguarding vulnerable customers against unwanted spending and potentially falling into debt.

 What direction might banking UX take in the future?

 Greater flexibility for customers – open banking makes customer’s financial data far more freely available to banks, and other service providers, which transforms the traditional onboarding process. Because customers will need to provide far less of their data when switching banks, much of the onboarding process for these customers will be negated. Not only does this make it as simple as possible for customers to pick the best provider for their needs, it also makes the entire switching experience far quicker, easier, and less of a burden for the customer.

 The increased flexibility offered by these user-centred banking providers does not stop here, and could also transform our experiences in other sectors. A great example of this is the utilities sector, where uncertain energy prices, increased competition and the recent cold snap has led to more of us than ever before switching suppliers in search of a better deal. Considering this, many have speculated that in future we could feasibly see customers able to switch providers from any sector – all from one app.

Greater accessibility – For the first time ever, more than half of the world’s population are online, and nearly two in three (63%) UK residents do their banking online (a 33% rise since 2007). This move to online means that it has never been more important for banks to embrace inclusive design, thus ensuring that nobody is discriminated against or unable to access vital money management services.

We’ve already touched upon the great work being done to cater for those living with mental impairments, but this is a field in which we think further strides could (and should) be made in the near future as more brands begin to design with the user at front of mind.

Another area in which banks could be more inclusive is in how they communicate with their customers. We live in a multichannel world, and customers will have their own unique preferences (whether this is driven by choice or by necessity) as to how they engage with businesses. Brands must therefore be equally accessible via multiple communication channels, whether this by more traditional methods such as phone, email, or even newer methods such as instant messaging apps or social media, if they are to effectively reach their customers in the digital age.

 User-centred providers are set to thrive in the new banking landscape

 The rise of user-centric design has already had a substantial effect on the banking sector. In the wake of open banking, switching providers will now be easier than ever before, creating a greater focus on engendering and retaining customer loyalty among banking providers.

While on the surface, this loyalty may now be more difficult to achieve, there is the opportunity for stronger customer relationships than ever for banking providers who are able to innovate and offer these user-centric solutions.

Regardless of current size, those who will thrive in the new banking landscape will be those who strive to innovate and create exceptional experiences for their customers.

Ultimately, this will forever reshape the relationship between banking provider and customer, moving away from a purely transactional relationship to one which is truly customer-centric. This means that the successful banking provider of the future must place the customer at the heart of the design process, working from the outset with the customer at front of mind.

Hilary Stephenson, managing director of digital user experience (UX) agency, Sigma.

Recent changes in the financial sector, such as the upsurge in digital-only banks and the implementation of open banking, have greatly increased competition between financial services providers. In the wake of this sea-change, forward-thinking organisations have begun to realise that, for many customers, user experience (UX) is as much a differentiator as price or brand loyalty.

Until now, digital UX has largely been somewhat overlooked in the banking market, with established brands dominating solely through the power of their name. However, the prevalence of ‘disruptive’ service providers like Uber and AirBnB, has led to an increased demand for consumers to manage their finances digitally, highlighting to banks the importance of optimising their online and mobile offering. As a result of this we’ve seen a sharp rise in digitally-focused challenger brands, such as Monzo and Tide, disrupting the financial services sector.

The influx of these new players, which deliver products and experiences with the customer at front of mind, has cast new light on the benefits of the banking sector adopting sleek, user-centred, design principles.

The rise of user-centric banking 

At its heart, UX design is about the improvement of products and services to enhance user satisfaction and deliver a better experience. Applying this to the banking sector, positive user experiences can be achieved by matching customer’s distinct financial and customer service needs with systems that are intuitive, effective, and easy to use.

Advances in technology, such as the smartphone, have driven a wave of digital transformation in the banking sector. But until now, UX hasn’t really been prioritised, meaning banks generally have been offering the same services – and the same frustrations.

Because of this inactivity, smaller, innovative banking providers have been able to steal a march on their more established competitors by designing their products and services with customer needs front of mind from the outset. Specifically, digitally-focused fintech brands, such as Atom and Monzo, have analysed the day-to-day banking issues customers face, and designed their services from the ground up to mitigate these issues.

Recent research from EY suggests that positive strides are being made in this area, with 85% of executives at traditional banks citing digital transformation as a key growth area this year. Despite this, more needs to be done if the high street brands are to keep pace with the more agile fintech start-ups. 

How UX is transforming financial management 

In terms of how user-centric banking translates into the services we use, the most interesting use-cases seen thus far focus on creating greater transparency between banks and customers in order to alleviate consumer anxiety and build trust.

Here is a selection of notable examples we’ve seen: 

Enabling greater control over our finances – Excess expenditure is a perennial issue for banking customers who are looking to save, or even just maintain control over their financial lives. This is why mobile banking platforms, which go beyond the traditional monthly statement, are gaining popularity among customers who struggle with the age-old question of “how can I avoid spending too much?”.

Many forward-thinking fintech providers now offer money management functions with detailed spending breakdowns, which allow their customers to effectively budget and manage exactly where their money is going. In the future, we could see this go even further with more widespread adoption of financial safety nets such as automatic savings transfers, warnings against upcoming payments, and safe-to-spend limits.

 Positive friction – This may initially seem an odd inclusion; after all, user friction is exactly what we as designers generally aim to avoid.

In certain cases, however, friction can be used as an invaluable design tool to improve the user experience. For example, late-night impulse spending can often be a source of regret and anxiety for customers, with many waking up the next morning wishing they could revoke their purchase. This is backed by research from the Money & Mental Health Policy Institute, which found that this impulse spending is particularly prevalent in sufferers of mental health impairments such as Bipolar Disorder.

An example of a forward-thinking provider designing against this is Monzo’s implementation of a late-night spending “safety net”, wherein users are provided with a summary of any purchases made after a certain time the previous day (say, 11pm), along with an option to review and cancel certain purchases before the funds leave the customer’s account.

Not only does this go a long way towards increasing trust between customers and their banks, but there is also the important ethical consideration of safeguarding vulnerable customers against unwanted spending and potentially falling into debt.

 What direction might banking UX take in the future?

 Greater flexibility for customers – open banking makes customer’s financial data far more freely available to banks, and other service providers, which transforms the traditional onboarding process. Because customers will need to provide far less of their data when switching banks, much of the onboarding process for these customers will be negated. Not only does this make it as simple as possible for customers to pick the best provider for their needs, it also makes the entire switching experience far quicker, easier, and less of a burden for the customer.

 The increased flexibility offered by these user-centred banking providers does not stop here, and could also transform our experiences in other sectors. A great example of this is the utilities sector, where uncertain energy prices, increased competition and the recent cold snap has led to more of us than ever before switching suppliers in search of a better deal. Considering this, many have speculated that in future we could feasibly see customers able to switch providers from any sector – all from one app.

Greater accessibility – For the first time ever, more than half of the world’s population are online, and nearly two in three (63%) UK residents do their banking online (a 33% rise since 2007). This move to online means that it has never been more important for banks to embrace inclusive design, thus ensuring that nobody is discriminated against or unable to access vital money management services.

We’ve already touched upon the great work being done to cater for those living with mental impairments, but this is a field in which we think further strides could (and should) be made in the near future as more brands begin to design with the user at front of mind.

Another area in which banks could be more inclusive is in how they communicate with their customers. We live in a multichannel world, and customers will have their own unique preferences (whether this is driven by choice or by necessity) as to how they engage with businesses. Brands must therefore be equally accessible via multiple communication channels, whether this by more traditional methods such as phone, email, or even newer methods such as instant messaging apps or social media, if they are to effectively reach their customers in the digital age.

 User-centred providers are set to thrive in the new banking landscape

 The rise of user-centric design has already had a substantial effect on the banking sector. In the wake of open banking, switching providers will now be easier than ever before, creating a greater focus on engendering and retaining customer loyalty among banking providers.

While on the surface, this loyalty may now be more difficult to achieve, there is the opportunity for stronger customer relationships than ever for banking providers who are able to innovate and offer these user-centric solutions.

Regardless of current size, those who will thrive in the new banking landscape will be those who strive to innovate and create exceptional experiences for their customers.

Ultimately, this will forever reshape the relationship between banking provider and customer, moving away from a purely transactional relationship to one which is truly customer-centric. This means that the successful banking provider of the future must place the customer at the heart of the design process, working from the outset with the customer at front of mind.