OPEN BANKING OVERVIEW

Open Banking is a strategic shift that unlocks the banking market and provides services and functionality that bank customers expect from modern banking including instant transactions, increased safety, simplified on-boarding, forecasting, personalization and access to multiple accounts through a single service.  Open Banking is most advanced in Europe because of PSD2, which has brought with it standardization for API specifications. This has led banks down the path from private closed to public open APIs and allowed them to become functional elements of the API Economy.  In US market forces drive Open Banking with competitive pressure from rapidly evolving global fintech companies and transformed EU competitors.

NEED FOR UX OPTIMIZATION

In order to thrive in this new landscape financial platforms need to realign their UX and design vision allowing organizations and clients to mutually benefit from innovation and shared value within collaborative ecosystems.  This underlies a deeper shift in business objectives and technologies that drive innovation adoption including predictive and automation solutions. We will look at the successful approaches across multiple projects, concepts and collaborative insights that identify user goals and pain points across all touch points, synthesize, prioritize and rapidly implement customer centric solutions adaptively and consistently across all markets.  For a detailed review of the optimization process see this case study.

CHANGING GLOBAL COMPETITIVE LANDSCAPE

Client expectations are changing affecting consumer trust.  B2B Customer Experience Research confirms that many business-to-business companies, including investment banks, face heightened expectations from their clients. Among respondents to this survey:

They expect frictionless, intuitive solutions, a consistent level of service across channels, and solution providers to go above and beyond to keep their business.  The rise of global fixed-income e-trading in recent years reflects this trend. While its growth can be attributed to changes in regulation, fixed-income dealers are providing investors with an efficient and frictionless process.

Customers’ loyalty is also at risk. Banks face an expanding array of new competitors. The entry of companies like Alipay, Amazon Cash, Facebook Messenger P2P, WeChat, and other services skilled at customer ease and experience may, in the longer term, disintermediate traditional banks from customer relationships and reduce banks’ distribution margins. Another aspect is that companies outside the financial services are starting to set the benchmarks for customer experience in banking. Digital retailers and e-commerce businesses rank high in customer satisfaction with banks lagging in the lower middle.

Today customer loyalty and trust are driven by digital channel experiences. There is an increasing trend among millennials to actively seek banking alternatives due to a lack of trust in their financial institutions. They are expecting the same level of innovation and convenience that they experience with Apple, Uber or Amazon services.

HOW CAN INVESTMENT BANKS MEET CLIENT EXPECTATIONS WHEN TODAY’S SERVICE STANDARDS ARE SUPERFLUID?

Business-to-consumer (B2C) experiences build around on intuitive self-service and frictionless interactions are shaping client expectations in the business-to-business (B2B) realm as well. As investment banks transform their services and products, they face the challenge of meeting changing client expectations within new API economy that eliminates many differentiators they have relied on in the past.

Here at M-One Studio on daily basis multiple industry cases confirm that implementing robust user experience strategies and architectures set banks on the way to success in the new world of collaborative innovation and shared value.

What do customers value:

GET THE BASICS RIGHT

One of the common fallacies of UX transformations is going for a deep impact disregarding immediate user needs.  In may cases this may disengage customers and derail the transformation jeopardizing its long term goal.

We live in a mobile first world with 90% of people under the age of 35 no longer using computers. Yet most banks still lack features like  to opening a bank account, refinancing, or simply transacting on mobile. Banks need to make a priority to understand mobile platforms and their users’ behavior . For many, banking apps are too critical to be built half-stacked.

USER RESEARCH

User research is a critical fundamental for UX transformation in banking because it allows to solve real people problems by enabling the following design activities:

• Constructing persona and behavioral segments
• Identifying pain points in existing products and services
• Defining and prioritizing user goals
• Analyzing and optimizing user journeys with holistic journey maps

Data-driven approach grounded in user research will allow banks to:

• • Synthesize, optimize and rapidly implement UX solutions for continuous sustainable impact.
  • Deliver contextual fail-safe architectures and designs while working within security constraints that prevent attacks and exploits.

IN SUM

UX transformation in banking means: using design thinking to generate collaborative insights and working with clients, design , technology and data stakeholders to identify user goals and pain points across all touch points, synthesize, prioritize and rapidly implement optimized UX solutions adaptively and consistently across all products to achieve higher levels of customer centricity.

Depth and breadth of usage analysis shows that 70% of digital banking customers use only 2 to 4 of their primary bank products, focusing on a small subset of features and disregarding or not realizing the value of others.  There are several reasons for this behavior: over-segmentation, mediation, and overfitting.

The solution involves tearing down as many design, technological, data and sociological silos as possible, focusing on dynamic multi-tier behavior segmentation and increasing breadth and depth of use while being mindful about simplicity and contextual architectures.

Sometimes optimizing investment product UX means minimizing engagement by allowing users to achieve their goals faster. This is usually referred to as the engagement paradox.  This creates simultaneously a challenge and opportunity, a dichotomy resolved by the integration of customization and predictive technologies. For example, infusing contextual analytics and adding “micro-Bloomberg experiences” for portfolio managers widens and deepens engagement while supporting their primary goals.  Building intelligent workflows is challenging as is, and with added AI black box factor optimizing cognitive load distribution by reducing step/task ratio and learning time becomes imperative.  Read more about cognitive UX optimization in this case study.

Whether at the level of intelligent news feeds or custom portfolio compositions and predictive cash flow and investment layers: AI/ML technologies are becoming one of the driving factors of UX transformation in finance with many organizations implementing digital loops above and below their customers.

Customer-centered designs are the focal points of the transformation in investment and banking.  They implement predictive cash flow and portfolio services, risk and performance management customization at personal and B2B levels among other features needed to adequately address evolving customer needs and provide the experience that meets and exceeds expectations.

GAINING COMPETITIVE ADVANTAGE

By implementing optimized UX strategies and architectures and reducing over-segmentation banks and other financial services become more resilient to aggregator threats posed by rising global fintech within open API economy.

By delivering native multi-modal solutions and apps with meaningful micro-contextual (read: dimensionality and motion aware) workflows banks will fulfill current experiential expectations, and using agile iteration build sustainable collaborative ecosystems that increase shared value and win trust and loyalty of their customers.

Understanding and addressing evolving people’s needs and today’s socio-technological standards creates a solid UX foundation for developing continuous future-proof omni-channel financial experiences.