Enhanced customer experiences, reduced churn, increased efficiency, innovation and fewer risks – these are the 8 powerful reasons why you need design thinking in banking and FinTech
Are you using customer-centric methods like design thinking to develop financial products?
The financial sector is losing customers to disruptive technologies and brands – some 78% of financial decision-makers have already experimented with disruptive brands and 58% of consumers are willing to switch to a “riskier” platform purely based on it offering a better experience.
It’s estimated that some banks lose up to 20% of customers (one in five) as of 2023 and the core reason is that over-regulated and bloated financial institutions are unable to keep up with evolving customer needs.
A powerful measure to counter this is to employ the exact same business processes disruptors are using to attract customers – empathy. Though surprising to traditional banks, agile FinTechs know that by adopting a customer-centric approach, you can structure your entire business around understanding and meeting customer needs.
It’s called design thinking – and here’s why you need it to thrive in banking and FinTech...
In traditional business, we were all schooled to think linearly, in silos and focus on internal processes. That means, when you as an individual have a “problem” that needs fixing, it’s your sole responsibility to sit and grapple with it and try and figure it all out by yourself – the focus is on perfecting things before you make them public.
The problem with that is, at scale, it really stifles innovation and slows things down (like what financial institutions are experiencing right now).
Design thinking is an approach that flips that on its head – it’s not your responsibility to find solutions, your job is to use other people’s (your customers’) insights to develop solutions and drive the business forward by delivering what they want and need.
It’s a user-centric approach to problem-solving that involves understanding their needs, redefining problems, and creating innovative solutions to prototype and test, so you gradually build up the proper solutions using “external” help (feedback from customers).
In finance, Design Thinking can be implemented through several stages by building processes specifically designed to help you:
We are busy creating a complete guide to design thinking in finance and will make it available soon.
Design Thinking starts and ends with the customer. By making it part of your business’s methodology to identify (through feedback loops, surveys etc.), understand and empathise with your customers, financial institutions can learn to adapt services and create new ones that are truly needed, avoiding the common trap of solution-based development.
This way you know that you are creating products/services that your customer actually wants – the best way to retain a customer.
By designing and developing solutions with an understanding of customers' lives and financial needs, you can enhance user interaction at every touchpoint. This leads to a more personalised, seamless customer experience that can foster loyalty and satisfaction.
See the latest UI trends in banking.
Is there any better way of serving someone than by listening to them and solving the problems they say they are facing? With its iterative process, Design Thinking allows financial institutions to refine solutions continually based on real user feedback, leading to more effective and adaptive solutions to complex problems.
The ideation phase of Design Thinking encourages thinking outside the conventional frameworks and norms. This can lead to groundbreaking innovations that can redefine market standards and expectations.
See how to use big data to understand cusomer needs.
By focusing on user needs and streamlining solutions, Design Thinking can significantly cut down on unnecessary features and functionalities, thus optimising operational efficiency.
In the digital age, customer expectations are constantly evolving. Design Thinking helps banks and FinTechs develop more agile, user-friendly digital solutions that resonate with the tech-savvy consumer.
Learn to do customer journey mapping for finance.
Testing prototypes on a small scale before full deployment allows banks to identify potential failures and user issues early, thereby reducing the financial risk associated with new initiatives.
In a competitive market, continuous innovation and customer satisfaction are key. Design Thinking equips financial institutions with the tools to stay ahead by continually adapting to changes in customer preferences and market conditions.
See what's possible with Blockchain in banking.
Need help with a more customer-centric approach to FinTech?
Ask our technical consultants about implementing it correctly in design and product development.
