Data-driven design thinking helps banks drive revenue

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As digital banking gained traction at the end of the last decade, in-person branch use started declining, even before COVID-19 upended life in the US.

With the pandemic keeping people at home, more clients than ever before are using their mobile, tablet, and desktop devices to complete everyday banking tasks, such as depositing checks, paying bills, and applying for loans. Experts believe that these online banking trends will continue after the pandemic ends, which means that enhancing the digital customer experience should be top of mind for banks and other financial institutions.

To deliver standout customer experiences across their digital portfolio, banks and other financial institutions can engage in data-driven product design thinking to understand how different client segments interact with each digital channel, especially desktop websites and native mobile apps. The challenge, then, is to build products and offer services that meet the needs of each unique user. To accomplish this banks and financial institutions should engage in data-driven design thinking, which focuses on how organizations can optimize specific elements of the user experience to drive conversion rates and revenue.

Banks and other financial institutions can engage in data-driven product design thinking to understand how different client segments interact with each digital channel.

Understanding each unique customer journey

Nowadays, clients are engaging in cross-device customer journeys to accomplish more difficult tasks, such as applying for home loans, completing first-time deposits in a business account, or opening an estate account. Clients might start the process of applying for a loan by reading a guide on a bank’s mobile app, but feel more comfortable completing the process on their desktop browser. Data-driven design thinking focuses on optimizing the user experience every step of the way in order to drive both macro and micro conversions.

It’s also important to segment users, which means breaking them down into groups based on key demographics, such as age. Gen X’ers and boomers are more likely to bank with desktop devices, whereas Gen Z’ers and millennials are more inclined to use their mobile devices to accomplish similar tasks. This means that digital teams should tailor the user experience on desktop devices for an older audience, who are not digitally native.

With some tasks, like depositing a check, almost every client uses the same type of device–in this case, mobile. Extra care should be put into building features like these, since they must be intuitive and easy-to-use for every single user.

Addressing and leveraging customer friction

Retail banks and financial institutions don’t have much room for error, especially given that they deal with transactions worth thousands of dollars on a regular basis. The financial service industry is highly regulated, which makes sense given that banks are responsible for keeping your identity and financial information safe, secure, and private. That said, technical errors, glitches, and design problems occur, and banks must be ready to rescue a customer from these moments of friction.

To do so, digital teams might consider setting up features such as a chat window with a live rep that pops up whenever clients encounter a technical problem and can’t complete a transaction on their own. Features like these remind clients that an actual human working for the bank cares about their well being, offering a stronger sense of security as well as empathy.

But customer friction should also be a standard part of certain workflows with sizable financial consequences, such as applying for a mortgage or making a large payment. For clients, simple forms of friction such as re-entering a password, filling out a captcha, or confirming a transaction can be positive signals that establish trust with nervous clients.

Now, just because customer friction can be a positive signal for customers doesn’t mean that organizations should add unnecessary steps to workflows, such as filling out superfluous forms or navigating through extra features for low stakes transactions. Each workflow is unique and should be optimized accordingly.

Empathizing with the customer, but taking their direct feedback with a grain of salt

It turns out that the user experience problems with the greatest impact on a business’s bottom line might not be the most obvious. In fact, they might be completely obscured, especially if the problem is related to a clumsy or confusing design, which, unlike technical errors, go unnoticed by most traditional analytics platforms. For this reason it’s important to quantify how much each design flaw or technical error is costing the company before tackling the product backlog.

To understand why something isn’t working as planned, teams need to relate each design element to key performance indicators (KPIs), which are determined by data analytics, not gut instinct. A seemingly unimportant button in the middle of a workflow might be negatively impacting overall revenue and costing the bank millions in yearly revenue, even if that specific button isn’t solely responsible for completing an important task, such as making a deposit or buying securities.

By measuring conversion rates for each step of a workflow, teams can pinpoint when something goes wrong and diagnose the issue by using session replay technology, an essential tool for teams practicing data-driven design thinking. Watching user replays enables digital teams to step into the client’s shoes and understand what exactly went wrong. Traditional analytics tools can’t tell you where a user rage clicked for 1 minute, or that placing a crucial button beneath the website’s fold made it too difficult for some users to find.

This approach to building digital products, known as Continuous Product Design, helps teams align on issues that are frustrating customers the most. Practicing Continuous Product Design, which incorporates data-driven design thinking, leads to improved digital products, happier clients, and a better return on investment.

By taking a data-driven design thinking approach to building digital products, banks and financial institutions will start to reap the benefits of their investment in digital channels. And clients, who benefit from superior digital experiences, will be happier, too. It’s a win-win.

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Originally posted at AnalyticsWeek