The Path to Disruption
Most startups at some point or another will invariably claim to be disrupting an industry. In fact, the idea of disruption is so embedded in the narrative of what every young upstart company is seeking to do that it’s right there in the name of what is arguably the most popular annual conference for tech startups in the U.S.
It makes sense, of course: If you’re a new company that’s entering an industry dominated by massive corporations with a stranglehold on every competitive advantage – money, scale, name recognition, a proven track record – you’re going to have to convince investors that you’re punching above your weight and bringing something to market that will be radical enough to change the business. The overwhelming majority of startups, of course, fail; but those that do succeed most often have at least one common thread: They actually did disrupt an industry in a way that changed how we do things by making those things more efficient and easier to accomplish.
Another common thread that all successful tech startups today share is that their product design is almost always first-rate. (We’re going with almost always because sometimes a startup succeeds in spite of its design – cough, LinkedIn, cough). After all, it’s virtually impossible as a tech startup to deliver an efficient service if your product doesn’t provide a superior user experience.
This is certainly true for startups that are looking to carve out market share in the financial services industry. This means that for designers, a financial tech (fintech) product comes with its own unique set of challenges that sets it apart from nearly any other design project you’ve worked on.
Create a Little Friction
Fintech companies have already made a significant impact on the financial services market: Firms like Venmo, Zelle, Robinhood, SoFi, Mint, Betterment, Acorns and Stripe have found success in the traditional money markets. Meanwhile, companies like Circle, Coinbase, Gemini and Ripple have been some of the trailblazers in the cryptocurrency space.
However, while Amazon’s success as an e-commerce giant has threatened the viability of many brick-and-mortar retail stores, the financial services industry is different: No matter how successful a fintech startup might be, the scale of the world’s biggest banks is so massive that none of them are really sweating the future; if anything, they’re just going to use their scale to acquire fintech startups that help them build their business for the future.
And so, the goal of most fintech startups has to be disruption on a relatively modest scale. They’re not going to overthrow an established business model, but instead move that business model forward so that it’s accessible to a new generation that does things differently than previous generations.
Consider this: While young professionals are now doing most of the same banking as their parents, many millennials can count on one hand (or one finger even) how many times they’ve done any banking inside an actual bank beyond using an ATM. And so, fintech startups are servicing this growing market of people who want to do their banking and investing via their phones and other digital devices.
But the irony of these fintech products is that while they are making all of these banking tasks much more convenient, the critical nature of what’s at stake – a user’s money and the regulatory compliance of a fintech company – means that the process of navigating the platform must be a little more convoluted, going against a designer’s natural instincts.
“The essential draw of fintech is that users can perform all their banking and money management easily, but it’s prudent to remember that that entails serious financial decisions,” notes Sean McGowan, a technical researcher and writer. “Major actions or permanent changes shouldn’t be so streamlined that they can be performed accidentally or carelessly.”
Although one of the goals of a UX designer is to normally limit the friction on a site, knowing that too much friction creates a poor user experience that can then impede user retention, “the design of many fintech applications finds itself in the rare occurrence where employing poor UX design techniques is actually a good thing,” according to McGowan. In this case, friction is actually better for the user.
“Multi-factor authentication, pop-ups confirming significant financial actions, and other roadblocks help mitigate user mistakes and prevent potentially irreversible errors,” he explains. “It impedes your users, but not their experience.”
Knowledge is Power
No one is going to expect that their UX designer also moonlights as a finance and investment savant, but you might be wondering exactly how important is it to know something about finance? We hate to discourage you, but it’s kind of important!
“The UI/UX designer market is full of great specialists, but make sure the people you hire have an understanding of finance,” explains Anastasiia Lien, a UI/UX designer at Django Stars. “Obviously, you will save a lot of time and effort if you don’t have to explain every little detail to your team. But most importantly, you will get much better results if your developers understand financial terms, the correlations between processes, and the whole concept of the service you’re providing.”
But because financial technology is such a specialized product that engages with users in a way that’s different from most other digital products, having a handle on finance might not be enough. A “user experience specialist, on the one hand, should understand the specifics of the financial industry and have relevant experience but, on the other hand, have valuable experience from other industries as well,” according to a blog post from UX Design Agency (UXDA), which specializes in banking and fintech.
“Financial UX engineering is not only about design and finance, but also about business, marketing, psychology, behavior and technology,” UXDA adds. “This is the only way to achieve the required expertise and a comprehensive approach to find the best UX solution for financial services.”
Again, because this is such a specialized field – “a designer’s skills and knowledge are not enough to architect a financial product,” according to UXDA – the reality is that not every designer or design firm will be the right fit for building a fintech product.
“This process requires other critical roles such as business analyst, UX researcher, UX architect, information architect and, most importantly, a UX strategist who will help generate the correct vision and product strategy based on all the collected data and insights,” UXDA adds.
Keep it Simple
When it comes to actually building a fintech product, keep in mind that the reason most UX designers might not know enough about finance to feel comfortable taking on a fintech design project is because finance and investing can be really difficult to understand. This is why Robinhood, Acorns, Betterment and other fintech startups have been successful with both users and the investors who are pouring money into their fundraising efforts: They are making tasks that can often feel impenetrable to the average person much easier to understand and accomplish.
And the way their products have simplified these processes for users is largely through UX and UI designed to help guide users through each step.
“The financial industry is notoriously convoluted, and the average user is unlikely to be well-versed in key money management principles,” Sean McGowan writes. “It’s imperative that user-centric fintech platforms are able to translate complex financial data into meaningful or actionable information.”
When thinking of how to design the user experience for a fintech-related app, it’s important to consider all users who might be using it, “from Wall Street bankers to the ballerinas of the Bolshoi Theater, from West Coast college dropouts to Texas farmers,” according to Anastasiia Lien. So, yes, some of the people who use the product might actually be Wall Street bankers who are well-versed in finance; what this means is that when you think about simplifying the user experience, it doesn’t just mean making the process easy to understand for a Texas farmer, but making the process simple to accomplish, whether they’re an expert or not.
“For these apps to become popular, they have to be more than just safe,” according to Talia van Everdingen, a content manager at Taplytics. “Their UX should be simple, requiring little effort from users, and should avoid the technical, intimidating elements of personal finance. Designing to create this seamless UX compensates for the unavoidable friction of fintech apps.”
Easier Done Than Said
Designers know they can never assume that a user is going to be as tech-savvy as they are, which is why the best UX designs are always intuitive and not overloaded with so many features that it becomes confusing to navigate. This approach is especially important when designing for an industry that’s “notoriously convoluted,” as McGowan referred to financial services.
“When a person is communicating with others, he/she usually unknowingly assumes that they have the same background for understanding,” UXDA notes. “The simplest example is the use of special terminology in digital financial services designed for mass users. It’s too difficult for ordinary people to understand them."
Anastasiia Lien points out that because “you may face the challenge of transforming something complicated into a tiny, simple tool that fits into an average person’s phone,” you have to be careful that the copy and microcopy is easy to understand regardless of the “financial and educational background” of the users.
“Remember, as we said, finance is a rather complex field, which means that all the text you use in your app should be clear, simple, and straightforward,” Lien adds.
Of course, because complex terms can be unavoidable on a banking or investing app, Lien suggests figuring out “a simple way to explain these terms to your users without overloading the app with text,” which is where your design skills come into play.
“To make sure everyone’s on the same page about the terms your app is using, compile a glossary with all the definitions and related terms in the app,” Lien writes. “Make sure the UX developer and the UX writer are constantly in touch – if your app uses multiple languages, some translations may need more space or larger fields than the original language required.”
One last tip when it comes to product design for fintech: It’s imperative that you build a product that is adaptable to future changes in the industry – whether it’s through technology, regulations or just new approaches to doing business. This “industry is in a near-constant state of flux,” according to Sean McGowan.
“We are in the midst of a digital revolution in the banking and investment sectors as they attempt to catch up to other, much more rapidly modernising spaces,” he explains. “Banks, credit unions, and financial institutions experience fast, and sometimes volatile change as their relationships to one another are reshaped by new technology.”
What this means for you is that your work might never be done; your design will have to evolve to match the evolution of this rapidly changing industry.