Image credits: Austin Distel on Unsplash.
The digitization in the financial service industry has brought a greater revolution to the closed, monopolized traditional banking and financial services industry. In 2018, open banking came into effect with the aim of making financial services more competitive, innovative, and improve customer experiences. Open banking requires financial service institutions to open up customers' and payment data securely to third party providers, so they can access the users' financial data to create new financial services and applications. The user experience is of utmost importance in open banking. This blog post discusses the importance of User Experience (UX) in open banking.
What is UX?
In the context of open banking, UX is about human impressions and behaviors when using banking digital interfaces. An innovative UX design is likely to influence various aspects of user behavior on financial services. A customer’s interest in using open banking services increases only if the customer journey through the system matches their expectations; and also if the information is presented in a more intuitive way so that it helps to make reliable decisions. In other words, a solution with a correct UX design can show the users exactly what they have to do to complete certain tasks securely, quickly, and easily. Furthermore, a good UX design will lead to achieving customer satisfaction and customer trust towards the bank, and thus there is a significantly higher chance for the customers to remain loyal to the bank for longer.
Traditional Banking vs Open Banking
Traditionally, the banking industry has remained closed and secretive, monopolizing the majority of financial services. By in-person face-to-face customer service, traditional banking has gained customers' trust for years. However, the banking and financial services industry is very specific because they require more customer attention and trust. With the digitization of the financial sector, consumer trust and consumer satisfaction have become a noticeable challenge.
Unlike traditional banking, open banking provides a customer-centered thinking legacy. The ability to access accounts, financial data, and payments using a third-party financial service via open banking will give users financial freedom. Therefore the design of the solution becomes the key tool for creating a successful financial solution.
Importance of UX
According to research, the user experience includes the ease of use, layout, and set up as the most important factors when it comes to the banking sector. Trust is a core factor that financial institutions can earn by providing better user experiences. Simplicity and speed are key drivers of attracting customers. Also, customers expect a solution that provides the ability to make smart financial decisions and improve the quality of their financial life. Because people want to see more than just their balances and transactions.
Drawbacks in Lack of UX in Digital Banking Solutions
When considering the current digital banking solutions that some banks are offering today, we are able to understand when things go wrong in UX. That is not just the applications itself that give a frustrating experience to customers, but the lack of customer service as well. Every single step of the customer journey through the application adds to the customer experience. One of the main reasons for this is that most banks have made improvements in favor of the bank rather than their customers. But the major disadvantage of this is If customers are left with a bad experience, they will seek out an alternative that provides them the service and experience they need.
Therefore the UX design has a major impact on establishing a good impression on the open banking solution. A better UX signifies that the digital solution is easy, intuitive, and secure. Furthermore, UX design is not a one time process. It is an iterative process that needs to be optimized and improved based on customer feedback because continuous improvements in UX will help to improve the success of the product as well as user satisfaction.
UX plays a major role in digitized financial services. Banks must try to focus on solving the problems of customers and providing better services to customers. By investing in customer experience, financial institutions can strengthen their brand and increase revenue in the banking industry. Therefore, customer experience and satisfaction are some of the major facts that open banking solutions should address. Among today's open banking solutions, WSO2 Open Banking provides a solution with greater financial transparency, innovative services, and high quality consumer experiences.