back to latest articles

Digital Banking Strategy Relies on UX / CX to Find Market Need

0

Digital Banking Strategy Relies on UX / CX to Find Market Need

According to CB Insights research of 101 startup failure post-mortems, 42% failed because they lacked market need. It's not only about “inexperienced” startups, this happens even to the “best of us”. Google failed with Google+ and Google Wave, despite enormous marketing budgets and award-winning ads. We see the same happening in digital banking.  So, the question is - is it a good digital banking strategy to first create a digital financial product and then stimulate a market need with tons of advertising?

A shorter version of this article was originally published on Forbes.com

screenshot-2020-08-27-at-154352.png

The rapid development of digital technology is making new demands on financial brands.

Marketing methods that used to work perfectly only a decade ago, don't deliver the expected results anymore. There are so many alternatives available on the market that a pretty package and a catchy slogan aren't enough to convince people to buy and stay loyal to the brand and the product.

In the digital age, it's all about the emotional connection customers have with the financial brand that is formed through the value they get out of the digital financial solutions.

Making financial products and trying to convince everyone that they need those is a very expensive Russian roulette with no guaranteed outcome. A much more reliable way would be to do it the other way around - first define and then match the market need with the exact product that the customers seek.

Customer Experience transformation VS Digital transformation in digital banking strategy

Unfortunately, when it comes to digitalization many finance companies still make the same mistake - they put all of their main efforts into creating a product and thinking about the benefits it will provide to their business, instead of focusing on the value for the users.

In creating digital banking strategy, they usually think about technology, development, business goals, and marketing campaigns. This is the model of how businesses have been operating for decades, yet when it comes to digitalization, as many as 78% of companies fail at their digitalization goals according to Everest group.

digital-transformation-in-banking-uxda-73-percent-fail-newest__1504.jpg

So, if the focus on technology and product alone leads to failure in digital transformation, then what's the key to successful digital strategy in banking? The answer is simple.

Banks can shift the focus from the product to the customers. Successful digital strategy in banking means transforming the customer experience by applying the possibilities of modern technology.

Today, customers are the ones deciding product's success. What if they don't care about all of the features and technological advancements of your financial product?

Creating products reversely

In the digital world, success is achieved not by creating a selling package for a product, but by turning the product into a value that sells itself. In this case, any marketing activity becomes 10X more effective.

The secret of creating such a user-centered product is to base it on the solution demanded by customers, not on the market segmentation and competitive strategy.

This means, using reverse engineering - a top-down approach that starts with customer research to define the ultimate value for them and proceeds with an action plan of how to execute it in your digital banking strategy. As Steve Jobs said, you've got to start with the customer experience and work back toward the technology - not the other way around.

digital-transformation-in-banking-S-1.jpg

It reduces the uncertainty of whether there will be a demand for the product even before it’s launched.

digital-transformation-in-banking-m-1-1.jpg

Different gap, different bridges

In the previous Industrial age, the gap between the FMCG brands (fast-moving consumer goods) and the sales was about lack of market distribution and promotion. Times have changed and for digital products, this is not the issue.

digital-transformation-ux-design-for-banking-bridge-the-gap-M.jpg

In the digital age, it's possible to reach almost anyone, without any marketing budget, using social networks, blogs and SEO (search engine optimization).

The main gap today is - can you provide something the customers actually need? A product that would solve people’s problems and make their lives easier?

Those who can reply with a confident “yes” will be able to succeed even without huge marketing budget. That's because in the digital age you can bridge the gap between your financial app and the customers only by providing an exceptional customer experience in banking. Huge advertising budget, nor nice packaging won't help here.

A user-centered mobile banking app that's based on the customer wants, needs, and expectations will always be able to market itself without almost any marketing budget.

For example, we can probably all name some local restaurant that offers unforgettable experiences to its customers and creates a ton of positive emotions. After visiting, everyone tells their friends about it, post about it on Instagram, and it's not long before it's almost impossible to book a table because it has become SO popular. And it's not thanks to intensive advertisements but the word of mouth because people were so happy and satisfied with it.

It is no miracle, anyone can integrate this into their own financial business, whether it's a huge bank or a tiny fintech startup. All it takes is a true dedication to satisfy customers in the best way possible by creating an unforgettable digital banking customer experience.

So, the only way to successful digital banking strategy is to go big on delivering outstanding customer experience. And people will pay you back by becoming the ambassadors of your financial brand, happy to recommend it to their friends.

banner-process-1612347143.png

Did you enjoy this article? Share your thoughts!

If you are seeking an exceptional competitive advantage in the digital age, contact us! With the power of financial UX design, we can help you turn your business into a beloved financial brand that has a strong emotional connection with your clients, resulting in success, demand and long-term customer loyalty.

Share:

Listen to our podcast:

More from our blog

UXDA Amongst the Best Companies in the European Business Awards

UXDA Amongst the Best Companies in the European Business Awards

We are proud to announce that UXDA is named ‘One to Watch’ in the business excellence list published by the European Business Awards 2019 - one of the world’s largest and longest-running business competitions.

Core Banking Case Study: Digital Transformation of Financial Service

With ITTI Digital’s permission, we are sharing an exclusive step-by-step case study on designing a next-generation banking back office that will definitely become a game changer in the industry.

UXDA Awarded at the World's Largest Design Competition - A'Design Award

UXDA Awarded at the World's Largest Design Competition - A'Design Award

UXDA has become the Silver A'Design Award winner at the world’s largest and one of the most influential design competitions, gathering designers from more than 100 countries.

UXDA Launches Financial UX Design Podcast (and Becomes No.1 on the First Day!)

UXDA Launches Financial UX Design Podcast (and Becomes No.1 on the First Day!)

We have launched our Financial UX Design Podcast on ALL major podcast platforms. Now, our followers from all over the world can get the latest insights and knowledge about creating demanded digital products, not only on our blog but also in a lively audio format.

Banking Future is in Digital Experience, Not in Marketing

We need to remember that banking future depends on digital channels and UX strategy, not on marketing.

🎧 Fintech Design Trends: CX / UX Driving Banking Disruption

10 digital Fintech design trends that reveal the approach of disrupting the banking business. Check out your ability to integrate user-centricity at all levels of the company.

UX Case Study: Mixed Reality VR / AR Banking Design Future Concept

The first mixed-reality banking concept that includes virtual reality banking, augmented reality banking, tablet, desktop, wearable and mobile banking.

🎧 The Financial CX Design Formula for a Digital Breakthrough

Spending 15 years in business, creating hundreds of different kinds of digital products and studying their growth, I have extracted a straightforward formula that explains what determines the success rate of any digital product.

🎧 Get an 'Experience Mindset' To Humanize Digital Transformation in Banking

We highlight the differences between thinking in a “new way” versus “the old one.” These differences can explain why some products are successful in the modern digital environment while others are not.

ABOUT THE AUTHOR

Alex
Alex, Founder/ CEO/ UX Strategist

Alex has dedicated half of his life to studying human psychology, as well as business success, developing 100+ digital projects and 30+ startups. He spent 10 years researching UX and finance to create UXDA's methodology. Alex is a passionate visionary who's capable of solving any challenge to improve the financial industry.