Digital Innovation in the Banking Industry
By Thelton McMillian, Co-Founder & CEO at Comrade
A large number of fintech companies are now focused to engage customers through the use of digital technologies. Traditional banking companies and fintech start-ups have a difficult task at hand to satisfy the demands of a loyal customer base. Digital banking has the potential to change the financial industry by helping companies to deliver a highly personalized service experience.
Consider Venmo, the social payments app now owned by PayPal. In 2015, criminals were able to scam unsuspecting users out of thousands of dollars by cancelling payment after the transaction appeared to be completed. Venmo has made it harder to use this exploit, but a better messaging strategy and user experience would have prevented most of these issues.
An excellent user experience makes tasks easy to complete and anticipate the user’s needs. However, when dealing with financial transactions, one can’t assume the user understands the service or inherent risks of using it.
In evaluating your security posture, consider all aspects of the service including error messaging, policies and terms, and creative opportunities to educate customers. These opportunities may come in ways you haven’t considered before but may turn out to be popular with users— for example, we worked with a large bank to put short, informative videos about fraud prevention on their banking pages that, according to usability studies, resonated with their users.
The ‘New’ Digital World
Research indicates a shift in perception around trust in financial services. One study shows 83% of respondents visit a bank only once every six months. Millennials don’t value face-to-face banking as much as their older peers; many trust technology companies like Apple and Google over banks to handle e-money transactions.
If an online service appears to be cobbled together from antiquated systems, users will lack confidence in the system. The service provider’s technology and a seamless online user experience are components that build trust in a brand.
There are many ways to unify the user experience, even if there are multitudes of vendors and systems that make the service run. For example, we worked with a bank that had 16 separate homepage logins and used 256 different vendor services for digital banking. We helped them simplify their “front door” and created a consistent user experience that helped build customer trust and ultimately increased multi-service accounts in all areas.
Engage the Security Team Early in the Innovation Cycle
Getting innovation to market does not have to compromise security. It’s best to include security and compliance early in your design process or risk project slowdown or rework.
We worked through this with a Super Regional Bank when solving their mobile customers' biggest frustration of having to constantly sign-in to check their account balances on their mobile device. We created a Quick Balance feature, which shows balances with just a single tap. The bank was the first in the U.S. to launch this feature because we engaged the Risk and Compliance team early in the design process. This included building a prototype for the team to ensure the innovation wasn’t introducing new risks. The feature was able to launch on time and tripled app downloads.
A simple user experience and a highly secure system may seem like contradictory forces. However, with the right approach, it’s possible to improve your user experience and provide customer convenience without compromising security.