By Danny Piangerelli
Prioritizing the user experience in an increasingly competitive mobile app space.
What exactly is a bank’s “digital experience?” It’s more than likely that you have heard that term countless times, since by now, the term “digital” has been used (and maybe even overused) for years. Originally, banks needed a word to describe the shift from traditional, branch-based banking to a branchless model. Thus, the terms “PC banking,” “internet banking,” and “home banking” all came into existence. For 10 or so years these terms sufficed, as all three described what was actually going on—a person conducting his or her banking on a PC, over the Internet, or at home. Enter Smartphones. With their introduction came a need to describe this new channel differently, and thus, “mobile banking” was born. Again, a useful term that describes exactly what it does.
However, in addition to an excess of terminology, the development of these new channels also produced a new challenge. In the world of growing online experiences, the user experience was starting to blend across different mediums. Consider this common example: a user might want to check his email at home in the morning on a PC through a web browser. Then, on the way to work, he might check it again, but this time on a mobile device. While at work, a mobile device can be used in tandem with a PC, one for sending quick messages, the other for composing longer notes and archiving old ones. With every new channel, the question has remained: how to create an elevated, yet consistent experience for consumers.
Understanding consumer usage patterns.
As companies began to produce browser-based and mobile applications for banking, we found consumer usage patterns for logging into Internet banking and banking apps to be nearly identical to email login patterns.
Consumers might log into their browser to check a balance, pay a bill and look at a statement. While out at a store, they might check their balance on a mobile app, and potentially use the app to transfer money from savings into a checking account. While at home in the evening, users frequently log back into the browser to check that the store’s transaction had cleared. What banks and fintech providers started to discover was that what we referred to as two “channels,” the end user simply calls “banking.”
Fintech companies have since added terms such as multi-channel and omni-channel to the mix. However, each new word or phrase has really only amplified the need to focus less on the mechanism of delivery and more on the experience of the actual end user.
Defining design.
In the traditional design world, the end-user focus has been well understood. Design-centric agencies can expertly track direct feedback and data from usability groups, studies, and labs, using that insight to craft better experiences. For many companies—and now banks—that have shifted to or added digital channels, design must account for the fact that their brand representation is their product.
Banks must continually ask themselves how their brands are being represented, and determine whether the design of their online and mobile channels supports the brand image they wish to reflect. Given the amount of time (and often, years) a financial institution takes to craft its brand, it is paramount to consider how well that message is represented in its digital offerings. The case can certainly be made that today, the sophistication and design of an institution’s digital offerings, both web and mobile, are the most important and relevant representation of its brand.
Assessing the digital competition.
Banks consider their competitors quite frequently, but are they assessing their digital competition? For the sake of this discussion, I’ll refer to the core banking services—such as taking deposits, moving money between accounts, dispensing cash, and offering credit or loans—as banking utilities. Banks have a clear understanding of what their competition offers and can gauge how to differentiate their products and services. I’ve heard community financial institutions describe how, unlike their money center counterparts, they compete not primarily on products, but on service. Banks should put the same effort toward evaluating their digital competitors.
When it comes to the online and mobile experience, the competition is not just with the financial institution down the street. Rather, consumers are comparing their bank’s apps to the mobile experience of Facebook, Instagram and Amazon. The design and usability of the most commonly used apps on devices (including websites) garners a lot of attention from the user experience community. While mobile banking apps are rarely mentioned in the design world, banks certainly shouldn’t take this as a sign that digital design doesn’t matter. In fact, as consumers and even businesses grow more reliant on digital channels to shop and conduct business, the design, navigability, and experience of banking apps will matter that much more.
App usage is rising.
The average smartphone owner uses only about five apps regularly, even though the average number of apps installed on the device is often larger than that figure. During a 2015 earnings report, Facebook CEO Mark Zuckerberg said that the average U.S. consumer spends 40 minutes a day interacting with Facebook, whether through the browser or within apps. In addition, 59% of Instagram users report visiting the app at least once a day, with 35% reporting multiple visits per day. Where do banking and credit union apps fit in to these statistics? Our internal, real-time usage analytics indicate that iOS mobile banking users log into their apps around four to five times a week. This data suggests that the mobile banking app is likely within those top five regularly-used apps. As consumers increasingly interact with their banks via mobile apps every other day, it is even more critical to ensure their experience is up to par with their other most frequently used apps.
Banks should ask themselves: When our customers leave the websites and log out of the apps of Amazon and Facebook and enter our bank’s site or app, will they sense a sharp drop off in usability or look and feel? Banks should be even more motivated to ensure the answer to this question is “no” as more user-experience competitors become business competitors as well. Take Facebook, for example—it might have initially been a user-experience competitor, but as the company enters the P2P payments game, it may potentially become another emerging competitor for banks’ business. Consider these questions:
- If Facebook could give its users access to your core banking system, and allow Facebook Messenger users to submit P2P payments to other users, why would those users ever return to your P2P option?
- If the balance and transaction history was available through the same API, and Etsy could allow users to get a quick view of their balances before offering to buy something, when would they ever open their banking app again?
- Who would ever trust their banking details to a non-bank app?
For an answer to that last one, just ask Venmo, Square Cash, and Paypal.
Banks have the data to win.
The reality of Facebook is not just a great user interface. You’re on it because your friends and family are. And you bank with your bank because that’s where your money and much of your financial data reside. Even still, banks—and in particular, community banks—cannot afford to find themselves caught in design paralysis.
This doesn’t necessarily mean that banks should take months to strategize, propose, and execute digital designs. In fact, it’s quite the opposite. In the quickly-moving fintech space, banks simply do not have the time to spend in heavy design sessions that produce massive amounts of ideas. Instead, banks should aim for a proper balance between a design process that is agile, yet strives to be as complete as possible. When it comes to design, flexibility is the best approach. Too heavy of a focus on best-practices and design-methodologies can lead to rigidity. Execution of the best design must remain fluid, as priorities, marketing messages, and milestones change.
If a bank renews its focus on its “digital” competition, it can naturally produce more relevant experiences. For app creators, it is equally as important to focus on creating beautifully designed experiences that actually make it out the door on time, with built-in flexibility and a robust technical architecture. In the end, banks that can put a simple, unique, usable, and intentionally designed experience directly into their customers’ hands will be the digital competitors to beat.
Danny Piangerelli is chief technology officer at Malauzai, a developer of mobile and Internet banking solutions for community financial institutions.
Online training in digital, mobile and social media from ABA.
