The Entrepreneur’s Ultimate Guide to Fintech UX and Product Design

Table of Contents

Introduction

What is UX product design? And why it matters for fintechs

The product design process

MVP vs. MLP: Why shift from viable to lovable

Case studies: Real-life examples of how fintechs are scaling and building trust with UX

Get started with UX/UI design

Introduction

“Any bank or fintech startup that is unable to provide the service that the customer is looking for will perish.”

We live in a world of demand scarcity, oversupply, and technological rise where the consumer is ‘the king’. More informed and sceptical consumers have started to quickly gain power over brands and influence business strategy. And the financial industry is not exception.

Back in the day, people would often base their bank decisions purely on the preference of their parents due to the lack of diversity in the sector. But this quickly started to change with the surge in digital banking and fintech. Whilst digital advances have forced the financial industry to adapt to the changing consumer demands, they’ve also emphasised the major gaps in financial inclusion and the importance of the democratisation of financial services.

With customer-centric and intuitive designs, transparent and fair offerings, and exceptional customer experiences and efficiencies, fintechs have been successfully changing the rules of the game and upping the level of excellence in financial services and products.

The COVID-19 pandemic has only reinforced this trend. Social distancing and remote working have significantly accelerated the shift to digital financial services. With the massive surge in e-commerce, customers quickly moved to all type of digital products and services like digital payments, wallets, and mobile banking. According to Plaid’s latest report, The Fintech Effect 2021: Fintech’s Mass Adoption Moment, currently, more people in the US use fintech than video streaming services and social media.

As demand continues to grow, so does the competition. So, how can fintechs sustain competitive advantage in the changing economic environment? One way is by embracing the power of user experience (UX) into their company’s DNA.

In this guide, we discuss what is UX design and how fintechs can use it to drive demand, loyalty and growth. We also go through the concept of a minimum viable product (MVP), how to build a product design powerhouse, and we review some of the most outstanding success stories of fintech UX out there.

Give customers a great experience and they’ll buy more, be more loyal and share their experience with friends. - PWC

What is UX product design? And why it matters for fintechs.

What is UX product design?

User experience or UX is a popular business term that is usually used to describe the way people interact with a particular product or service. For example, when you want to digitally send money to a friend, you might interact with a money transfer provider’s online application. And certain aspects of the application’s design like accessibility, speed and physical appearance might determine your overall feeling about the interaction.

In the modern digital world, UX is often accompanied by the term “design” and it refers to the process of improving a user’s satisfaction with a digital product or service by catering to the following 4 key experience factors:

• ‍Value - Does the product provide value?‍
• Function - Does the product work as expected?‍
• Usability - How easy is the product to use? ‍
• Overall impression - Is the product pleasant to use and/or entertaining?

In other words, UX design is all about creating a series of conditions that are more likely to result in an overall positive impression or experience. The leading UX expert and authors, Peter Morville, has grouped those into a 7-trait honeycomb user experience model that includes:

Morville’s UX honeycomb model

UX design is more than good usability

The level of usability of a product is essential for creating good UX, but it’s not everything. Whilst usability can ensure a product is functioning well, it cannot guarantee that people will eventually use it.

UX design is a marathon, not a sprint

UX design doesn’t stop with the delivery of the product. As you start onboarding users and receiving feedback about the product, your UX design will continue evolving, too. Changes in consumer preferences, technology advancements and regulations might require further design improvements and amendments to your product or service.

UX design is about humans

Every good design requires a deep understanding of the end user and their exact needs, aspirations and demands. Good UX design puts the human and their emotions and behaviours at the centre of the product and the сhallenge it solves.

UX design is different from UI design

UX and UI (user interface) are often used interchangeably, ut there’s a major difference between the two terms. Although UI plays an essential part in UX, it covers just the visual / surface level of a product. UX, on the other hand, combines all product design processes under one roof to bridge the gap between the product functionality and its physical appearance.

UX design should account for business needs

There’s no point creating a product that users love if it doesn’t also help you achieve your overall business needs and requirements. Finding the balance between creating a lovable and practical solution is key for UX designers.

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Why fintechs should care about UX?

Here are 5 reasons why fintechs should invest in UX design:

1. It cuts development costs

If you spend a dollar on making an app that users like before you release it, then you won’t have to spend nine dollars afterward on fixing what they hate. Actually, the saving is between $10 and $100 for every dollar spent according to Roger Pressman in Software Engineering: A Practitioner’s Approach.

Research has shown that 50% of programmers’ time is wasted on avoidable work. In contrast, UX/UI designers tend to be significantly more productive as they focus on identifying users’ exact needs and wants right from the start.

2. It helps you to attract new users

Word of mouth and testimonials are the most powerful form of advertising. If someone you trust likes and recommends you a product, it’s highly likely you’d also give it a try.

Every successful company knows this, so they’re all working constantly towards making their offerings as user friendly and likable as possible. They know that more loyal fans mean more “free” recommendations for their products and services.

And the beauty of it is that any business can improve their UX to attract new customers, too.

3. It increases the conversion of leads into customers

75% of people judge a website based on how it looks, and a user-friendly interface is more likely to turn leads into customers.

An entire generation has grown up interacting with screens, and the longer they’ve been doing it for, the higher their expectations have become.

They want an interface that they can understand and use straight away with minimal instruction and interruption.

Good UX and UI designs can streamline your entire digital selling. Simple, intuitive and eye-catchy UI design combined with clear Calls-to-Action (CTAs) and user flow can help you qualify, attract and convert all the right customers in a matter of a few clicks.

4. It builds long-term user loyalty and trust

Your brand is a lot more than just a logo and a slogan. It’s the identity and reputation of your entire business. Delivering consistent and positive brand experiences across all customer touchpoints is thus crucial a business’s long-term growth and success, and you can’t afford to compromise it with non-functional and inefficient digital app, for example.

Simple and intuitive UI can easily help you turn your users into loyal brand fans. Research by Bain & Co. found that a 10% increase in user retention leads to an average increase in your business’s value of 30%. A pretty good reason to keep your customers loyal, right?

Trust is also one of the biggest challenges for fintechs. Users, especially those who are not digitally native, will be much more sceptical about adopting new financial products or apps and giving them access and control to their finances and personal information. UX designer’s ability to read human psychology can help tackle this and identify and address any user doubts at the different stages of the customer journey.

5. It reduces your customer support costs

If a product is easy-to-use and doesn’t require any additional user skills and knowledge then customers won’t need any additional support. This, on the other hand, means that you won’t have to spend any extra resources and time on customer education and support.

The product design process

“Think of design process as involving first the generation of alternatives and then the testing of these alternatives against a whole array of requirements and restraints.” - Herbert Simon

User experience is the complete process that provides the backbone for good design and UI. By using various research tools and methods, you can gather essential user behavioural data and insights that will help you come up with the right product design solutions.

End-to-end UX is therefore a quite extensive process that significantly differs across industries and types of businesses and projects. The approach to designing a fintech payments app, for example, will be different from the one used to develop a dating app.

However, most product and UX designers will generally go through the following 5 key stages of “design thinking”: empathise, define, ideate, prototype, and test.

User experience is the complete process that provides the backbone for good design and UI. By using various research tools and methods, you can gather essential user behavioural data and insights that will help you come up with the right product design solutions.

End-to-end UX is therefore a quite extensive process that significantly differs across industries and types of businesses and projects. The approach to designing a fintech payments app, for example, will be different from the one used to develop a dating app.

However, most product and UX designers will generally go through the following 5 key stages of “design thinking”: empathise, define, ideate, prototype, and test.

Empathise

Effective UX always starts with the user. Most products are developed to meet a particular user need/s. Hence, understanding the end-user and their exact needs, demands and behaviours is crucial for the success of any product design project.

There are various tools UX designers can use to study and analyse their target audience. Below we’ve listed some of the most popular ones:

Empathy map — an empathy map is a valuable tool for visualising ideas. It enables you to conceive a user’s perception about your solution or product and identify any gaps and opportunities in their behaviours. An empathy map usually captures key information aboutwhat users experience, how they feel and behave in certain circumstances, as well as their pains, gains and aspirations.

To create an effective empathy map, you would have to follow 3 key steps:

1. Identify your exact target audience;

2. Liaise with both internal and external stakeholders to exchange insights, fill any gaps and populate the map;

3. Identify user’s unique attitude and perceptions about the problems your product seeks to solve.

Define

Effective UX always starts with the user. Most products are developed to meet a particular user need/s. Hence, understanding the end-user and their exact needs, demands and behaviours is crucial for the success of any product design project.

The next stage of the UX design process is define. The goal of this stage is to identify key user groups who might benefit from using your product or solution in a similar way and the major problem/s they face. To do this, UX designers usually use the following two tools:

User personas — The user persona model can help you gain even further insight into who your target audience is. The model is based on the principle of profiling and involves categorising users into various groups with common personal traits like background, beliefs, feelings, pain points and interests.

Problem statement — After completing the persona profiling, UX designers will often use the insights collected during the process to come up with a clear problem statement. The problem statement is considered to be the key to creating a successful product because it helps developers spot any gaps between the problem itself (the user needs) and the purpose of the product and its design (the solution). Generally, the statement aims to explain / demonstrate what the expected experience will look like once the solution / product is delivered.

Interview of key stakeholders — The define stage usually ends with interviewing key stakeholders of the business to make sure all business goals and objectives (e.g. revenue targets) match the user needs.

Ideate

The ideate stage of the UX product design process is all about brainstorming the best ideas and solutions to solve the problem. Among the most widely used tools at this stage are the “How might we” Q&A method, sketching and storyboarding or illustrating.

Prototype

After selecting the best ideas or solutions that meet both the user needs and business goals, UX designers move to the validation stage or prototyping. Creating a prototype is essential to ensure the viability of a product. A prototype is an experimental model of an idea that allows you to test it before building the complete solution or product. There are multiple ways for creating a prototype like drawing a sketch on a piece of paper or developing functional simulations that look and feel like a real product.

Test

The last stage of the UX product design process is usually the testing. The main objective of testing is to ensure that the product design works as intended. Running internal tests, also known as dogfooding (“Eating your own dog food”), and/or external guerrilla testing that involves gathering feedback from the general public are among the most popular testing tools among UX designers.

Key challenges for implementing product design in fintech

Generally, from a technical perspective, the UX/UI designing of fintech products and solutions is not much different from the process of developing other types of digital products and applications. Regardless of the type of product or industry, UX/UI design is all about creating a positive and unique user experience that will eventually increase user engagement, product satisfaction, and customer loyalty and retention. However, in practice, UX/UI designers face a number of unique challenges and factors that can have a major impact on the efficiency and adoption of the final fintech product.

In the following section, we’ve outlined the top 5 challenges for UX/UI designers of fintech products.

1. Compliance and security

Fintechs, just like traditional financial service providers, are facing an increasing burden of regulatory and compliance requirements and restrictions due to the high risks of fraud and financial crime in the sector. There are 3 key areas UX/UI designers need to consider and take extra care when creating fintech products and applications, especially in the retail banking space: cybercrime, KYC and AML.

Cybercrime — Fintech apps are among the most tempting targets for cyberattacks and criminals. Whilst one of the biggest benefits of fintech is that it democratises finance and gives customers greater accessibility, it ironically does the same for cyber criminals and hackers. Cashless payments, online banking and digital transactions have opened a series of new opportunities for hackers and cyber criminals to exploit the system and gain access to sensitive user information.

In addition to financial loss, cybersecurity breaches and criminal offences can significantly damage a fintech’s brand reputation and customer trust. Inspiring confidence and trust in a fintech product are thus proving to be a real challenge for organisations, but it’s also an area UX/UI product designers can add a tremendous value. By simply adding some extra security product features like password verifications, login limitations, card number view restrictions, etc., UX/UI designers in fintech can provide that extra piece of mind for the end user and in this way facilitate the overall customer conversion process.

Know your customer (KYC) — KYC is standard in the financial services industry that ensures financial providers know their customers and fully understand their financial profiles that includes obtaining key information about a customer’s individual financial position, risk appetite and financial literacy. KYC’s ultimate goal is to protect both the end client and the financial provider. So, embedding effective KYC validation features and tools in the product is yet another key consideration UX/UI designers in fintech should take into account. Some of the most popular KYC features include AI-driven identity checks,proofs of address, and live photo or video streaming facial recognitions.

Anti-money-laundering (AML) — AML refers to all laws, regulations and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income. Although AML laws generally apply to a limited range of transactions, the implications of a failed AML system can be far-reaching and affect a fintech’s financial stability, growth and brand reputation. Similar to implementing KYC, AML usually involves adding a series of validation steps and checks to the onboarding process of a fintech app or product. But an effective AML procedure doesn’t end with the opening of the account — AML is a continuous process that requires constant monitoring of the account’s activity throughout the user’s entire client lifecycle.

Great products to ensure the security of your fintech App

2. Financial complexity and jargon

Communicating complex financial products and concepts in a human and simple way is one of the biggest challenges for UX/UI designers in the fintech sector. The financial industry is full of jargon — think of terms like cash flow, invoicing, ETFs, financial statement, etc. Using the right language to explain a financial feature or tool can make or break the entire user experience. This is where UX research becomes particularly important. By studying and understanding the exact profile of the target end user, UX/UI designers will be able to identify the most suitable communication style and language for the product. Presenting complex financial information in a visual and interactive way with relevant graphics can further streamline and improve the user experience.

3. Friction balance

In most UX/UI design cases, eliminating friction is designer’s ultimate goal. In fintech, however, a certain level of friction is often required, especially when a user’s personal finances are on the line.

According to technical researcher Sean McGowan, “Increasing user friction for specific tasks is a pillar of fintech UX design. The inherent appeal of fintech is the ease of use, but it cannot be so effortless that it is easy for users to make mistakes with their money.” By adding just the right amount of friction at the right time, fintech UX designers can ensure users remain satisfied with the overall product experience whilst instilling a sense of reliability that their finances are protected against any unwanted accidents.

4. Lack of trust

The trust factor is another major challenge for fintech UX/UI designers. For most users, money and personal finances are quite a delicate matter. Gaining access to user’s personal finances and data usually requires much more rational thinking and behaviour. As discussed earlier, fintech UX/UI designers can tackle this by adding some extra layers of validation and reassurance that can further boost their confidence and trust in the product.

5. Finance is boring

Traditionally, finances are considered to be dull and boring. One of the key challenges and opportunities for fintech UX/UI designers is to make traditional financial products more interesting and engaging. There are multiple tactics that designers can use to overcome this issue and add touches of excitement to fintech products like incorporating sound effects, motion graphics and personalised, conversational language.

But probably one of the most popular ways to make a fintech app more interactive and fun is gamification. Gamification is simply the process of using game mechanisms in non-gaming scenarios. Including game elements like waiting lists, rankings and reward systems can help fintechs increase user satisfaction, conversion and loyalty.

MVP vs. MLP:Why shift from viable to lovable

What is MVP?

MVP stands for ‘minimum viable product’, which is shorthand for a working prototype that includes all of the ‘must-haves’ that your final product version will include. As such, it gives you the opportunity to gather insightful information from users about how they would interact with your product. The main goal of MVP is to validate your product concept by allowing you to test its functionality and uncover any potential UX problems and frictions, in advance, before you enter the full production phase.

Nowadays, MVPs are considered best practice in product design, and it’s easy to see why. Getting everything right before rollout can save you a lot of valuable time and resources. Building a release version of your product can easily take more than six months and burn through $150,000 of budget and more. Without a minimum viable product, you might end up in a situation where your final release product is not what you initially intended it to be, or even worse — it doesn’t fit the market.

MVP can thus provide an essential sanity check and safety net for fintech entrepreneurs and their innovative, challenger products. Moreover, from an investor’s perspective, spending $10,000 over 1–2 months to test your idea and make sure that it works is much more sensible and responsible than wasting six months and $150k with your fingers crossed.

So, the main advantages of creating an MVP compared
to working towards a fully-functional release product are:

• it’s cheaper
• it’s less risky
• user feedback helps you shape a more marketable final version
• increases investor confidence

Why shift from viable to lovable: The essentials of MLP

The ultimate goal of an MVP is to build a viable product (that drives revenue from customers) and be somewhat feature complete. Although the model makes perfect sense in theory, over the past few years, there’s been an increasing debates and criticism about its validity in the real world. According to Laurence McCahill, co-Founder of the Happy Startup School, “too many take Minimum too literally and skimp on the design as well as the scope” of a product, which on the other hand fails to deliver a sufficient first impression with the end users. And in today’s highly competitive and digitally savvy world, being viable or functional is no longer enough to attract customer’s attention.

So, here comes the MLP or Minimum Lovable Product. In contrast to MVP, MLP may not be viable at all and is often not feature complete. MLP is all about creating a version of the product that generates the maximum amount of love from early adopters with the least effort — its core objective is to drive user growth and scale rapidly.

In practice, MLP means taking your MVP and focusing on design, UI and user experience. In this way your product can still provide a solution to a user’s problem, but it’ll also be delighting them whilst doing so. Below we’ve summarised the essentials to implementing an MLP:

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Case studies: Real-life examples of how fintechs are scaling and building trust with UX

Acorns: The power of metaphor

Acorns is a US micro- and robo-investing fintech app. The primary goal of the company is to make saving and investing for users so effortless that they don’t even realise doing it.

Generally, a fintech app’s content must reflect the complexity of the provided financial product or service, and resonate with high and low literacy users alike, without losing their streamlined aesthetic — a seemingly impossible balance. Most fintech UX/UI designers aim to solve the issue by:

Using a gradual structure, using tabs, mouse over events, and the like to display complex data only when needed.

Simplifying complex information through easy-to-understand prose.

Using predictable interfaces so that users don’t need to engage with unnecessary complexity.

Saving the long-winded forms required by law for the end of the sign-up process.

Acorns brings a new solution to the table: metaphor. Its concepts are introduced by simple definitions that are explained through visual imagery instead of text. The growth of an oak tree is reflected on a page-by-page basis to erase friction and minimise the need for lengthy wordy explanations. It uses unambiguous layman’s terms and animation to cater to both inexperienced and expert investors.

Revolut: Create a core product that is easy to scale and adapt across markets

Revolut is a UK-based challenger banking app that has grown to more than 3,000 people in more than 20 countries. The key to Revolut’s quick international success was the scalability and agility of their product offering. Right from the beginning, the company realised that in order to quickly adapt to various local markets and ensure product market fit, it had to focus on developing a single, core product. The key elements to Revolut’s design process were:

• Understand the environment
• Create a process and leverage in-house expertise
• Great execution is better than great strategy — sometimes it’s as simple as that .

Lemonade: Behaviour prediction

The UX award-winning insurtech Lemonade uses artificially intelligent chatbots to navigate the user journey. Each screen is accompanied by a question, letting users engage with micro-copy only when they need to.

Lemonade’s anti-fraud algorithms support instant approvals, but the app is best known for its use of behavioural science. Unlike most insurance apps, it asks its users to sign an honesty pledge at the beginning of the claims process rather than at the end, thereby reducing the temptation to pad claims. The order of registration has a dramatic effect on adoption rates, too, so Lemonade lets users begin with an email sign-in that requires a single click. The claim button, chatbot, and coverage data precede lengthy forms, so users are less likely to abandon the process.

Get started with UX/UI design

At Pixels and Sense, we’ve spent the last 10 years helping early-stage fintech startups and scaleups elevate their brands and value propositions with digital products and experiences that are both viable and lovable.

Whilst doing so, we’ve developed and refined our 3-phase design framework that includes a Discovery, Strategy & Design and Delivery & Support stages. At Pixels and Sense, we believe in giving away, so below we’re sharing our tried and tested design process and best practices.

Discovery

The first step of our design process is to run product discovery and market orientation. Following the initial introductory call, we implement a series of discovery sessions with key internal and external stakeholders. Depending on the complexity of the project these could vary from one to three 1-hour discussions.

This is a mutual process of discovery — we start with defining the target audience through demographics, context, tech or financial savviness, their goals and pains. We then discuss the long-term vision of the product to make sure we lay a solid design foundation right from the start.

Strategy and Design

After collecting and analysing all the relevant market and company information, we take the time to evaluate all the insights and come up with a comprehensive product strategy. This involves defining and profiling ideal users with empathy maps and personas, and putting their needs and pains into context with customer journey maps and storyboards. We also study the existing market and competitive environment, and frame the problem using POV statements.

Sample user workflows and product ideas are then discussed and modified, before finalising the stage with a formal design strategy.

Next is the design and prototyping. Based on the sample user scenarios, we map the informational architecture of the product, using wireframing and interactive prototyping.

Based on the wireframing, we then come up with a distinct and relevant visual brand identity that is presented via high fidelity mockups, an interactive prototype, a UI kit and patterns libraries, specs and metrics. Finally, we deliver all the finished visual assets like graphics and icons, so developers can create the product.

Delivery & Support

Once we’ve delivered all assets within the project scope, we continue to provide support to the development team in case something changes or they need any additional help.

The reality is, developers are almost never able to accurately implement the designed layouts and make them pixel-perfect. They may use wrong fonts, margins, sizes, implement incorrect interface behaviour, etc. This isn’t because of laziness or poor skills — they’re just not designed for this. That’s why we help them make sure that the final product looks and works like it was meant to.

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