From the rise of online banking to the onset of the pandemic, financial technology has become our go-to solution to access mobile banking services. As a result, users have become more demanding in how seamlessly and efficiently these FinTech solutions meet their needs.
It’s no secret: 2020 changed everything. From how we access healthcare services and education programs to how we celebrate holidays, see our friends, and handle our banking transactions, the pandemic significantly disrupted our lifestyles as individuals and as consumers. Our relationship with traditional commerce and service providers will never be the same. Sure, this past decade was already the bringer of a new IT-powered era. Still, in the span of months, COVID brought a complete upheaval of our lives and upended millions of companies to become digital in a matter of days, with financial institutions proving no exception. The vast majority of big banks had to not only limit their in-person services but implement online protocols to keep their operations running. As a result, online banking and FinTech apps became the only way to keep meeting the world’s financial needs while in isolation. However, some of these solutions weren’t and still aren’t, as smooth and efficient as they could be. They don’t do much to improve their users’ lives, jeopardizing their adoption. Hence, the importance of understanding user experience (UX) in FinTech apps.
In banking and FinTech applications, oftentimes, users are left with nothing more than confusing navigational flows, lengthy forms, slow transactions, and glitchy apps that do nothing to fill the gap between traditional banks and their IT-loving customers. Luckily, the development industry is becoming increasingly aware of the importance of user experience in FinTech apps. As a result, we have learned enough to start helping FinTech app UX evolve and become what it should be: flawless.
So, as experienced FinTech app developers, we at Foonkie wanted to highlight how user experience in FinTech apps is evolving, what changes are being made, and how these efforts are shaping the future of online banking. Let’s begin!
The importance of UX design in FinTech apps
Think about a recent in-person banking experience you’ve had. Wasn’t it riddled with complex paperwork and interminable bureaucratic procedures? We’ve all had that happen at least once when dealing with the banking industry, and that’s because, historically, bureaucracy has been the financial sector’s leitmotif. From an unnecessary abundance of regulations to nonsensical red tape, traditional banking verticals are stressful, inefficient activities we all love to hate. The good news is that, with the advent of online banking, we’ve been making a move away from traditional banks and toward the more user-friendly world of FinTech apps.
FinTech, short for financial technology, is a versatile umbrella term that encompasses everything from simple mobile payment and transactional applications to complex blockchain-based networks, online banking, and encrypted transactions. At any rate, FinTech streamlines digital financial transactions, making them more straightforward, faster, much more accessible, and cost-effective by eliminating unnecessary middlemen and lengthy inane processes usually associated with traditional banking activities. Thanks to these, and more benefits of FinTech, users worldwide are starting to turn to this modern digital technology to meet their financial needs. In fact, one survey shows us that nearly 90% of respondents use and prefer mobile banking apps, a figure that rises to 97% when millennials are brought into the picture. These insights may come as no surprise to some, considering we’ve all turned to mobile apps for nearly everything. However, what was merely a growing trend some years ago has become a necessity. FinTechs now have the burden to prove that innovation, simplicity, user-friendliness, and finances can go hand-in-hand. And, as the financial technology industry embarks on this quest, its path toward an entirely successful digital transformation seems to be defined by whether it understands the importance of user experience in FinTech apps.
But why has user experience in FinTech become so pivotal? For one, because the world of finances isn’t easy. Most users of FinTech apps either can’t make sense of a lot of the banking and financial terms used during in-person interactions or don’t want to understand; they just need to pay and get out. Now, imagine taking the complexity of the financial world and adding fancy buttons, complicated swiping gestures, and drop-down menus that even tech-savvy users may struggle with. These added complications will only turn customers away. Remember: potential users will not become users if they find even the slightest obstacle or consider your app frustrating. So keeping things as frictionless, straightforward, and user-friendly as possible is crucial in FinTech apps.
On the other hand, today’s FinTech sector is an exceptionally competitive industry where smaller startups are creating fierce, agile, and unique offerings almost daily. In fact, as of late 2021, the US boasted over 10,000 FinTech startups, nearly half of the 26,000 registered globally. Moreover, some of these FinTech startups already have a user base that surpasses several million, representing a genuine threat to the hold that traditional banks have historically had on the financial market.
From innovative online banks and groundbreaking investing apps to decentralized lending platforms and blockchain-based transactional applications, there’s definitely no scarcity of ingenious ideas out there that directly threaten the industry’s stalwarts. And here’s where FinTech UX spells the difference between victory and defeat. First, these established and emerging startups have the upper hand of being digital natives, meaning they’re bringing forth a new status quo, a new way of doing things, namely, a new approach to user experience in FinTech apps. Moreover, these FinTechs are ninjas at implementing outstanding UX because the importance of having a stellar user experience is not only inherent to their app development practices, it is also embedded into their DNA. As a result, user experience in FinTech apps is becoming a customer-centered approach that permeates all business processes, from production to philosophy.
So now, thanks to the advent of new interface technology, FinTech startup proliferation, and customer-centered digital finance solutions, users are starting to demand that their mobile financial experiences are fast, straightforward, and intuitive, making user experience in FinTech apps non-negotiable for consumer engagement. As a result, FinTech UX design has come forward as a transformational force that takes onerous financial solutions and turns them into simple and enjoyable user-led experiences. But this dynamic universe that is FinTech UX design doesn’t just happen to evolve by chance. UX designers are the driving force behind the growth and modernization of the FinTech user experience space. However, the world of FinTech UX design is far from glamorous and exciting. Ask any UX designer, and they’ll surely tell you that designing for financial services isn’t at the top of their favorite-projects list. Studying compliance requirements, federal laws, and banking jargon isn’t exactly what dreams are made of. Still, with some patience, guidance, and this article, you can begin to see how fascinating and straightforward the world of FinTech UX design is.
Let’s take a look at the primary ways FinTech UX designers are helping FinTech apps evolve and how they can help the industry grow further.
Personalization
The time for generic, one-size-fits-all financial mobile solutions has passed. Now, users demand personalized FinTech products that not only meet their specific needs but also effectively anticipate those needs. So, for FinTech startups and online banks to gain their users’ fidelity and achieve a connection with them, they have to prove they understand their needs and can meet them and the way to do that is by delivering personalized solutions.
Personalization in FinTech UX design means adapting and tweaking a product’s elements to adjust to a specific user’s needs. It’s worth noting that personalization is different from customization. Customization is when a product allows users to select between different fonts, colors, sizes, and widgets, to name a few, to modify some aspects of the screen according to their preferences. Yes, personalization can include customization, but it generally goes beyond that. Personalization uses data-driven insights to give individual users a whole in-app experience that is only relevant to them, decreasing friction and increasing engagement by giving them the feeling that the app was primarily designed for them.
Using hyper-personalized elements such as custom-made ads and offers, one-on-one financial guidance, or loan recommendations based on spending patterns can help FinTechs evolve their UX design by assisting them in targeting real user needs and even meeting some needs they didn’t even know they had! What’s more, it’s the best way to gather valuable data and establish an emotional connection with their users, which is priceless for user loyalty and engagement.
Some friction is necessary.
Ok, ok, we know… didn’t we just say user experience in FinTech apps must be as frictionless as possible? Yes, that statement is true; one of the fundamental characteristics of FinTech apps is their ease of use. Nonetheless, some instances exist when intentionally making some tasks harder to complete is necessary and beneficial for good FinTech UX design. Why? Because money is a soft spot for all of us and since finance and banking apps help us handle our valuable assets, it’s essential for the UX designers of these products to take the necessary steps to protect those assets and one way of protecting those assets, aside from the obvious security measures we’ll discuss later, is friction.
In FinTech apps, actions cannot be so simple and effortless to accomplish that users can easily make mistakes with their money. And, in finance, even the slightest mistake can cause irreparable damage to users. For instance, if a payments app such as Venmo makes the money-sending process too easy, it could increase the chances of either sending money to the wrong person or sending the wrong figure to a recipient with the likelihood of never having it returned. In addition, that mistake would impact the app’s user experience immensely, and that user may never access the app again.
So, are we saying UX designers should add friction at every step? Of course not. But we do recommend adding some roadblocks before high-risk actions, so users have to confirm their actions and double-check before sending money or making payments.
Complicated terms are a thing of the past.
Do the terms FICO score, asset allocation, consumer price index, or Treasury Inflation-Protected Security sound familiar? Do you know what they mean? Yeah, me neither. One of the reasons the financial world is such a complicated place is the myriad of technical terms associated with it. While from an academic or technical standpoint, financial terms are necessary and even beneficial, when it comes to everyday users like you and me, they can be confusing and frustrating. And yet, traditional consumer banking and financial services have always been plagued with them, even when most users have yet to learn what most of these terms mean. Thankfully, FinTech exists to bring financial services down to the user level and make banking easy and accessible for everyone.
So, in modern FinTech UX, financial language has to be simple. Any text that references banking or financial terms within the app has to remain understandable for every user, regardless of their economic and educational background. However, at some point, it can be unavoidable to use terms such as overdraft or collateral, which, believe it or not, can be confusing to some users. In that case, hiring a UX writer can ensure these types of texts remain simple and straightforward while avoiding misleading the user. This last point is crucial because bridging complicated terms with common words is tricky. You can’t change the meaning of technical words because of compliance requirements and because you can’t risk misleading users. So, be very careful when writing your FinTech app’s copy and texts to avoid misunderstandings or costly fines.
Don’t leave UI design behind.
Let’s be honest; in most cases, only people who work in the field find banking and finances interesting. For the rest of us, the financial world is nothing more than a necessary evil. And, until the birth of FinTech, that was the status quo. Now, having to transfer money or pay for something is more manageable than it used to be, partly thanks to developers becoming more aware of the importance of user experience in FinTech apps but also thanks to them creating better FinTech UI.
For FinTech apps, going with a clean and minimalistic UI is the best way to guarantee a positive user experience. In that sense, FinTech apps need to combine any complex functionality they may require with a user-centric design that helps give users an enjoyable experience. Also, unlike traditional banks who tend to believe the more features, the better, FinTech companies know that too many features can overwhelm and confuse users. Remember, users don’t turn to FinTech apps for functionality; they need quick solutions for their banking needs. They usually have a simple, specific goal, such as transferring money, and they need a FinTech app to help them achieve it. No more, no less.
Security enforces user experience in FinTech apps.
Security is the foundation of any FinTech UX initiative. You simply cannot ask users to trust you with their finances if you don’t provide them with robust security measures. And while this may seem obvious, you’d be surprised at how hard it is to strike a balance between strong security measures and simplicity. For one, FinTech UX requires an onboarding process that is simple and seamless but also highly secure. This part is crucial not only for FinTech UX but to meet regulatory laws such as the KYC or the GDPR, which require FinTech companies to take measures that ensure the identification and verification of all users’ identities when opening and accessing an account. In other words, secure login credentials are mandatory, but they’re also pivotal for user experience in FinTech apps. Or would you feel comfortable with a FinTech app that doesn’t ask you for your password when logging in?
But there’s a catch. For FinTech apps to stand out, they must enforce credibility and deliver robust security measures with features such as two-factor authentication, biometrics, and encryption. They also must ensure that these safeguards don’t negatively impact the onboarding process. Since around 74% of users will drop an app if the onboarding process is too complicated, it’s crucial for FinTechs to provide smooth and quick login and sign-up processes while ensuring that all safeguards are continuously held in place. No one wants to spend time, not even a few minutes, trying to access their payments app. We want fast but also secure access. Thankfully, most FinTechs already offer sophisticated authentication processes based on customer-centric and innovative solutions that guarantee a flawless UX with high-security protocols that users can access in less than a second.
FinTechs don’t neglect fun!
One of technology’s most extraordinary things is making life more interesting and interactive and completing most daily, mundane tasks, like making financial transactions, more fun. So, if FinTech is the marriage between finances and technology, why should it be boring? Traditional banking can be tedious, and it will probably stay that way. I mean, going to a bank is a tedious task, and there is not much we can do about that. FinTech, however, gives us developers a chance to take technology’s assets and make online banking more interesting; so why not do it?
FinTech apps make finances significantly less tedious. They leverage positive reinforcement, social media elements, and personalization to add excitement and self-assurance, creating a simple, fluid, and motivational UX. Similarly, adding gamification elements makes FinTech apps more interactive and fun, helping users engage and interact with the financial world in a way that goes beyond just using it to pay for stuff. Venmo, for instance, leverages social media elements to increase engagement and propel its user experience forward. As a result, the popular FinTech app has successfully managed to include social media features and components such as likes, emojis, comments, and messages that users can attach to each payment.
Gamification is one of the elements that most clearly separates FinTech UX from traditional banking. It is a simple yet effective way to lower entry barriers into the mobile finance world while also raising users’ loyalty and engagement. On this last point, research shows that gamification helps increase user loyalty and makes it more likely for them to recommend the app to others.
Popular FinTech apps with outstanding UX
Moneylion
Moneylion is a US-based FinTech company founded in 2013 that gives users access to banking services in an approachable, user-friendly way. It offers financial advice, loans, investments, wealth management, and other banking services via a very innovative application with a great UX.
Robinhood
Robinhood is a famous US-based FinTech company that offers stock investment options in ETFs and cryptocurrencies with a 0% commission. In addition, Robinhood provides integration services with over 3500 US banks, including Chase, Wells Fargo, and Bank of America.
N26
N26 is a German neobank and finances management application that allows users to take charge of their finances in a user-friendly, straightforward way via a simple, innovative application.
Chime
Chime is one of the most popular FinTech apps in the US. It acts as a mobile-only bank that allows users to manage their accounts and monitor spending and other transactions hassle-freely via their application.
Mint
Mint is a US-based FinTech company that allows its users to send and receive money, pay bills, make purchases, manage their finances, create budgets, and monitor their spending patterns.
Long gone are the days when traditional banking was the only way to access the financial world. Now, thanks to modern technologies, things have changed, and FinTech has emerged to promote customer-centered banking and financial services that place the client at the center of most companies’ DNA. This way, the dynamic universe of user experience in FinTech apps has not only evolved immensely but has also brought a digital revolution where user-centricity is no longer a by-product of technology; it is an obligation. As a result, the importance and the impact of good user experience in FinTech apps cannot be underestimated. Providing seamless experiences and placing the user at the heart of all services is the only way to remain relevant and stand out in a fiercely competitive sector.
If you are looking for a development company that can make your FinTech app a reality and has ample experience in the sector, contact us!