Industry Stories

How Banks can Transform User Experience

HSBC Bank had a great mortgage product, but back in 2015, a litany of customer complaints showed a high level of dissatisfaction with the product. Interestingly, 73% of mortgage complaints were regarding the application process and processing of new mortgages. Customers complained about being kept in the dark on the status of their application. Based on a thorough root-cause analysis, the bank worked on a process overhaul to improve customer experience. Sure enough, in two years, the bank was able to bring mortgage complaints down by 40%, which meant 15,000 fewer complaints per year.¹

As the example demonstrates, user experience has emerged as an important focus area for banks. Customers today are exposed to Amazon- or Uber-like experiences that are highly intuitive and user-friendly. It’s only natural that they expect similar emphasis on user experience from the banking sector as well. Of course, banks need to deal with greater regulatory and compliance requirements compared to most other sectors, which limits them to some extent. But having said that, it will certainly serve banks well to put more emphasis on the user experience and map the user journey. For instance, when a customer interacts with a bank, whether remotely or in person or over the telephone, it is important to ensure a seamless experience.

As in the case of HSBC, the entire process for closing a mortgage should be as easy and quick as possible. From the information capture stage to “know your customer” (KYC) to determining the amount of mortgage that the person is eligible for to closing the deal, the entire process should be seamless and quick. For most banks though, the current processes they use is quite cumbersome.

Ease of doing transactions means that even customers who are not digital natives or digitally savvy should also be able to conduct transactions intuitively, as long as they are connected. In India, mobile wallet providers such as Paytm are disrupting the market by enabling users to conduct monetary transactions with ease using simple steps on their smart phones. In the process, they are also collecting huge amount of data on spending patterns – something that only banks were privy to earlier.

For banks, this presents several challenges. How do they ensure that they deliver the best possible user experience to their customers and own the customer relationship? In short, how do banks prepare for the new generation of customer?

Below are a few suggestions:

Agile approach

In the age of rapidly evolving customer preferences, taking an incubation or pilot-based approach to launching new offerings makes immense sense. An Agile approach to launching new services, such that they have short completion cycles with plenty of opportunities to collect feedback, works best. Banks can make some iterations, build surveys, check on how they resonate and then bring new services to the mainstream, rather than going full-steam ahead.

Be cognizant of privacy regulations

While user experience is important, it is crucial that banks do not lose sight of data privacy and regulatory regimes. Ensuring that best practices are strictly adhered to is key. For instance, banks need to get explicit consent from customers to use their data for analytics purposes.

Avoid a big bang transformation

When it comes to user experience transformation, one size does not fit all. Given the dynamic nature as well as diversity of customer preferences, taking a big bang approach to user experience transformation rarely works. Instead, a more evolutionary approach of defining detailed user journeys or journey maps for each offering or product, and looking at transforming each of them individually might be the way to go.

At a macro level, there are likely to be not more than 15 to 20 of these journeys. What’s applicable for wealth management wouldn’t be applicable for investment banking or retail banking. The way that consumers interact in each of these segments will be very different. In many cases, the underlying components may be the same, but from a user experience point of view, the treatment needs to be different.

In the end, it helps to remember that UX is not all about jazzy screens and fancy features. Any attempt at user experience transformation will be impactful only if you have the underlying data analytics to support it. Therefore, taking a holistic solution-centric approach to user experience that balances customer preferences with regulatory requirements will be the key to success.