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Six digital trends that are changing banking

by Jennifer Kilian and Vik Sohoni

Like many digital businesses, the financial services industry is discovering the value of great design in winning and retaining customers. Based on McKinsey surveys of thousands of customers and our work with a number of banks, we see six design trends that are transforming consumers’ expectations of financial services:

Personalization. This involves using advanced analytics to tailor an experience to a specific individual. While personalization has been an aspiration for a while, it’s generally been limited to not-very-personal experiences, such as basic email communications, re-targeting (showing someone an ad on various sites based on browsing history) and tailored web pages after sign-in. Increasingly sophisticated capabilities, however, enable companies to personalize a customer’s experience on the fly, drawing on segment and behavioral preferences, browsing histories, interaction styles (e.g. a millennial continuously posting on Instagram), or other markers.

Banks can personalize a site experience based on browsing history and other sources to show content that’s relevant to the customer. One bank tailors its pages to feature products that a visitor is qualified for based on analysis of that person’s browsing and social history.

It’s worth noting that personalization isn’t just about technology; it’s about mindset too. Banks have traditionally thought about products and accounts and now need to shift to thinking about people and their needs.

Instant gratification.  Conditioned by real-time ride hailing, one-click shopping, and same-day delivery services, digital customers are coming to expect instant gratification constantly. Designers are using technology and a detailed understanding of what matters to the customer to radically cut back unwanted or unnecessary steps and procedures to deliver on that expectation. One bank in Latin America, for example, recently cut the time to open an account from 25 to about two minutes—and that included a remote “Know Your Customer” verification. Instant fraud verification response via text has become more common in financial services as well.

Some banks are experimenting with CallVu, a visual interactive voice response technology that allows call center reps to push forms or web pages to the customer during a phone interaction to resolve a problem immediately, obtain a digital signature, or upload documents needed to process a loan or claim.

The next frontier is instant and seamless integration of the digital and physical world. In practical terms, that could mean that when a customer loses his or her bank credit card, the bank is able to deliver a replacement instantly to the digital wallet on his or her smart phones.

Simplification. Everyone wants financial services to be simpler. Now designers across the industry are focusing intensely on simplifying the customer experience, while factoring in regulatory necessities and security. One review we conducted of global digital simplification practices identified more than 100 different aspects of simplification—ranging from communicating terms & conditions in simpler language to offering intuitive shortcuts to help and search functions.

Conducting a “simplicity audit” of every customer journey is something we are seeing financial institutions doing more frequently. Qualified user experience designers doing this kind of audit can often uncover massive opportunities to enhance the experience, often in easy ways.

Automation. Automation can speed up and simplify back-end processes, but it also has an important role as a design feature. From pre-populating fields on forms to automating how data is captured or how loans are processed, the design of a customer’s experience can be fundamentally reshaped by the nature of that automation. One bank in South America, for example, has set up digital kiosks in its branches that enable people to open accounts. All customers need to do is take a picture of their national ID card. Optical character recognition (OCR) technologies make sense of the information, while processes pull in other information from a range of databases. The customer then verifies the information.

Ubiquity. Just as consumers can watch a program on a tablet, turn off the device, and then resume watching later on a smartphone, banks need to enable customers to do the same thing.  Busy people often want to start a banking process when they have a little time, then finish it up later.

Delivering on ubiquity can be complex. Different customer segments use different channels for different tasks at different times.  A retiree in Florida may want to walk into a branch to discuss a suspected fraud face-to-face, while a millennial in Texas may want to do everything by text.

Fortunately, new tools are emerging to help banks understand customer preferences when it comes to device and channel. ClickFox, for example, can determine that on weekends, one group of customers tends to check account balances several times from their smartphones. That information helps a bank to target or serve customers on the device they’re using at a given time.

Financial institutions need to design each customer journey with a view toward dominant user behaviors and needs, and potentially offer a “channel of choice” when permutations become too complex.

Gamification. Some banks are designing game-like features to help customers make better financial choices through “nudges,” a behavioral science concept that uses small suggestions and rewards to affect change. In one bank’s recent foray into nudging, the bank analyzed data on user behavior over time and used these insights to trigger alerts and even prompt changes in financial behavior. For example, an analysis might determine that a customer spends 200 percent more money on Fridays than on other days. When Friday comes, the bank can then suggest via text that the customer put some of that money toward savings or make other positive financial moves.

By understanding people’s needs, motivations, behaviors, and pain points—and taking advantage of increasingly sophisticated technologies—design can help banks create and deliver the new experiences that customers are increasingly demanding.

Jennifer Kilian is a digital VP in the New York office and Vik Sohoni is a senior partner in the Chicago office.