The banking industry has rapidly digitized, leading to a significant increase in online transactions and a diverse ecosystem that extends beyond traditional banks to include fintechs and neobanks. This shift is highlighted by the fact that 57% of millennials and 64% of Gen Z have financial accounts with nontraditional institutions. In other words, fintech is not the same.
In this evolving landscape, delivering an exceptional user experience has become paramount. As consumer preferences lean towards innovation and convenience, the success of financial institutions now hinges on their ability to adapt and prioritize customer needs.
How does one do that? – This is what this article is about.
High-level banking UX
Banking UX, or UX for any kind of product for that matter, boils down to three essential elements. Those are utility, usability, and desirability. Let’s cover all of those.
Utility: Essential but Standard
Utility in banking apps covers essential functions like transfers and payments. Although these features are critical, differentiating based solely on utility might not be viable in the long run. While there are still useful features that haven’t yet received universal adoption, it’s a matter on time. More on that later.
Usability: Critical for Success
Usability is crucial for customer retention and satisfaction. Non-bank entities have gained significant market share by focusing on streamlined, intuitive user interfaces. This is the primary reason non-bank finance solutions have gained so much traction.
Traditional banks must continuously enhance usability to compete effectively in a market driven by convenience and efficiency. The only alternative is a steady decline.
Desirability: The Differentiator
Desirability extends beyond functionality, focusing on creating an engaging and enjoyable user experience. Features that personalize the user experience, combined with a visually appealing design and lifestyle integration, can make a banking app stand out.
This emotional engagement is key to building loyalty and distinguishing a brand in a competitive landscape. Again, a much higher desirability is among the key differentiators that enable neobanks to thrive.
UX Principles
Most of the principles below have to do with usability. However, good utility is also important. There’s a strong tendency for banking apps to go beyond p2p transactions. Features such as splitting payments, sharing subscriptions, etc. have become more and more common.
Here are a few features that haven’t yet become mainstream, but are very important:
- Convenient expense categorization
- Various tools for savings
- Account management for junior users
- In-app budgeting tools
In other words, a banking app should strive to cover all financial needs in one place. That way, you’re increasing the likelihood of forming a habit around your app.
That said, let’s go over the core principles.
Simplicity
Simplicity is key in banking UX, where minimalist design and intuitive interfaces significantly enhance the user experience. By focusing on essential functionalities and reducing clutter, banks can create more user-friendly environments that reduce cognitive load and streamline decision-making.
This approach not only makes banking less intimidating but also improves satisfaction. Embracing simplicity helps banks attract a broader audience, ensuring their services are accessible and appealing, ultimately fostering stronger customer loyalty.
Below is an example of a fintech app we designed with simplicity in mind.
Transparency
With mobile app fraud transactions rising by over 600% since 2015 and account takeovers causing 89% of digital fraud losses, clear communication and transparency in banking processes are essential.
Banks need to emphasize straightforward information sharing and real-time transaction visibility to build trust and enable users to identify and report suspicious activities quickly. Integrating robust security measures with clear, user-friendly communication can significantly enhance user confidence and security in digital banking.
Humane analytics
Analytics in banking apps must be both actionable and accessible, especially since most users lack a finance education. Insights provided by these tools should be clear and understandable, enabling all users to make informed decisions without complexity.
Below is an example of a mobile dashboard to help users track the balance between income and spending. At a single glance, users get access to a year’s worth of data.
Accessibility
Inclusive design is essential in ensuring banking apps are accessible to all users, including those with disabilities. This approach adheres to the Web Content Accessibility Guidelines (WCAG), which provide a framework for making digital content usable by people of all abilities.
By integrating these principles, banks can create experiences that are not only compliant but also genuinely accommodating, ensuring everyone can manage their finances independently and securely.
Below, is a little overview of what WCAG standards are all about.
Building habit loops
Beyond principles, it's crucial to understand habit loops, which are instrumental in creating products that users return to repeatedly. A habit loop consists of three key components:
- Trigger: The cue that initiates the behavior.
- Action: The behavior itself, prompted by the trigger.
- Reward: The benefit received from completing the action.
Incorporating these elements effectively ensures that users not only use the banking app but are also motivated to continue using it, fostering a cycle of engagement and satisfaction.
Habit loops come in three forms: organic, manufactured and environmental. For the sake of retention, you should combine all loops to form a lasting relationship between the product and users.
Standing out
Most of the strategies below have to do with desirability. Without desirability, much less people will get to experience the usability or utility.
That said, here are a few approaches that we use with our clients to boost desirabiility.
Exciting branding
Branding plays a pivotal role in shaping a memorable and distinctive identity for banking apps. It's not just about visual aesthetics but also about infusing the brand personality into every aspect of the user experience.
Effective branding captures attention and differentiates the app in a crowded market, making it not only recognizable but also preferred by users. By emphasizing unique design elements and a consistent brand voice, banks can create a strong emotional connection with their customers.
Social Media presence
Maintaining an active presence on social media platforms is crucial for banks seeking to engage with customers, build community, and enhance brand visibility. These platforms provide a dynamic space to interact with users, address their concerns, and showcase the bank's services and innovations.
By leveraging social media, banks can foster a sense of community and openness, making customers feel valued and connected to the brand. This approach not only boosts customer loyalty but also amplifies the bank's reach and reputation in the digital age.
Loyalty aside, social media have become a place to tackle customer complaints and form more personal connections.
Micro animations
Micro animations are subtle yet powerful tools in enhancing the user experience of banking apps. These small, engaging animations add polish and delight, improving usability by visually conveying feedback and guiding user interactions.
By animating transitions and responses within the app, banks can create a more intuitive and enjoyable interface that not only captures attention but also helps clarify the functionality, ensuring users feel more confident and engaged while navigating their financial activities.
Gamification
Gamification involves integrating game elements like challenges, rewards, and progress tracking into banking apps to make financial tasks more enjoyable and motivating.
By adopting such elements, banks can transform routine transactions and savings behaviors into engaging experiences that encourage continuous interaction and loyalty. This, in turn, helps foster habit loops.
This approach not only enhances user engagement but also promotes financial literacy and healthier financial habits through an enjoyable and interactive format.
A good example is a crypto management app we designed Verida. The product utilizes multiple gamification approaches such as badges, collectibles and an in-product currency – XP. For instance, the XP can be later converted into crypto currency. This approach utilizes both triggers, desired actions and rewards.
Educational content
Educational content is vital for empowering users with the financial knowledge necessary to make informed decisions. By providing accessible resources and tutorials, banks can promote responsible banking practices and deepen user engagement.
This approach not only enhances the user experience by adding value beyond traditional banking services but also strengthens customer relationships and trust by demonstrating a commitment to their financial well-being.
360 good visuals
Consistent, high-quality visuals across all platforms, including websites, app store pages, and social media, are crucial for maintaining a strong brand presence. A well-designed app can lose potential users if it's not backed by equally appealing visual content on other channels.
Banks need to ensure that every digital touchpoint reflects the quality and professionalism of their services, as inconsistent visuals can lead to a disjointed user experience and diminish brand credibility.
Conclusion
As the banking industry becomes increasingly competitive, staying ahead requires a keen understanding of how to enhance user experience and engage customers effectively. The strategies discussed in this article—from embracing simplicity and inclusive design to leveraging gamification and educational content—provide a solid foundation for creating a more enjoyable and user-centric banking environment.
However, if you find yourself needing further guidance, we are here to assist. Our expertise is aimed at ensuring your banking solutions not only meet but exceed the expectations of today's savvy consumers. Reach out to us for deeper insights and tailored strategies that can propel your brand to the forefront of digital banking innovation.
