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Building Digital Empathy: Solving for Simplicity without Sacrificing Security

Community banks and credit unions have an imperative to prioritize digital empathy to make everyday experiences simple while protecting sensitive data.

Blog,
Adam Miller – Experience Design, Temenos Infinity
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Building digital empathy in banking can be daunting, especially for smaller, local, regional banks and credit unions who prioritize strong community presence and in-person service to differentiate themselves. There are real concerns at stake regarding technology budgets, integrations between operating systems, data security and education for customers and members making the transition to digital.

However, the events of 2020 have illustrated that it is not only possible for community financial institutions to make strides in digital banking, but imperative for their continued survival. While there are a myriad of strategic considerations that banks and credit unions must grapple with when going digital, the foundation to a successful digital strategy is built on empathy. As Steve Jobs famously said, “you have to start with the customer experience and work backwards to the technology.”

This idea that Jobs emphasized is the core of what it means to have digital empathy: thinking critically about how a customer is interacting with a digital process and how it enables—or hinders—them to achieve their goal. Building empathy through digital banking occurs mainly by reducing friction in everyday processes that should be simpler and maintaining friction to safeguard vulnerable, valuable customer data.

Reducing Unnecessary Friction in Everyday Processes

With the rise of online account opening and management now standard in most industries, including insurance, utilities, and other core services, most consumers do not see the need to visit a bank or credit union in-person to open a new account. Increasingly, financial institutions agree with them: according to the 2020 Digital Banking Report, enabling end-to-end digital account opening was the number one digital priority for banks and credit unions. However, only 34% of surveyed organizations had actually completed the digital transformation of this priority, meaning nearly two-thirds of banks and credit unions are still not able to provide a fully-digital account opening experience for their customers.

Is a 90-second account onboarding experience possible?

See it for yourself in Chief Experience Officer, Derek Corcoran’s “Digital Accout Opening in 90 Seconds” Synergy Session!

To survive a landscape where digitally-native fintechs are creeping in on market share, banks and credit unions need to be ruthless in streamlining banking application experiences as much as possible and prioritizing back-end processes that enable simple, fast account onboarding. Many of these digital activities can be achieved faster and more efficiently through thoughtful partnerships with the very fintechs that some banks and credit unions see as a threat. In fact, nearly half of surveyed institutions had already partnered with a fintech in 2020, and an additional 20% planned to pursue a partnership in the near future. These partnerships can help improve operational effectiveness and streamline the account onboarding process by automating review processes and bringing together multiple sources of information for seamless data transfer and analysis.

Beyond new account onboarding, there are many aspects of the customer and member lifecycle that can be simplified with well-designed, integrated digital processes. Daily servicing activities, like adding account co-holders or ordering checks, can easily be completed via apps or online portals with appropriate data validation measures. Besides servicing, customers need and appreciate specific, targeted guidance on personal financial management, insight into spending and budgeting as well as a holistic view of their financial wellbeing.

In these use cases, digital empathy requires removing friction that causes unnecessary annoyances and slows down processes that customers expect to be fast and easy. But what about the friction that is necessary to protect important investments and valuable data?

Maintaining Security with Purposeful Friction

There’s a reason I earlier explored the idea that practicing digital empathy does not always mean removing every single barrier between customers and new products or accounts: certain functions of banking are linked to the biggest, most important investments people make! I am reminded of a bank we worked with in Australia: they are a design-focused bank who invested significantly in testing new ideas directly with customers, to ensure their designs were on the right path. They were so focused on removing friction from a digital mortgage application process that they made it seem too easy. Applicants were concerned about how fast they were able to apply for and receive hundreds of thousands of dollars! With this feedback, the bank was able to re-introduce an appropriate amount of friction that forced applicants to slow down and provide a more comfortable amount of information before submitting their application. Applicants then felt the experience better matched the complexity of the process to the emotional weight associated with the most important transaction of many people’s lives.

Balancing ease of use with this purposeful friction is especially important for protecting customers and members now that reliance on digital tools has skyrocketed. In digital mediums, banks and credit unions must take additional steps to build in identity verification and evaluate device reputation to help protect customers from predatory actors. Rather than time-limited, up-front identity verification activities, banks and credit unions should shift to a continuous and contextual process that relies on a deep knowledge of that person’s typical account behavior, device location and linked accounts. For example, a customer may not need to verify a transfer of a regular amount that happens monthly, but what if they suddenly request a transfer of an unusually large sum? Providing a system of checks and balances that requires a simple verification from an email, text or phone call demonstrates awareness and concern for the customer or member and helps to build trust without being burdensome.

Thoughtful checkpoints require deep knowledge and analysis of customer device behavior and reputation. Simply tracking device activity within your own website and app is table stakes at this point—banks and credit unions must really think like their customer and consider their typical patterns of use, location, associated devices and more. Even things like how quickly digital applicants move through applications and complete verification steps can point to bot-based fraud schemes. To better protect customers and members in a swiftly-changing digital fraud landscape, banks and credit unions must operate on this granular level of analysis. They must strive to design robust protections and barriers that slow down attackers long enough for intervention, or prevent attack altogether.

Simple, Secure Digital Growth is Possible

Striking the right balance between removing unnecessary process complexities without sacrificing important protections is a challenge banks and credit unions face in building digital empathy for their customers and members.  Bringing together multiple sources of truth to both delight and defend digital users, while at the same time showing genuine care and concern for their financial wellbeing, requires a thoughtful combination of technology, people, and strong partnerships. At Temenos, we provide all three to ensure banks and credit unions have everything they need to “walk the talk” of digital empathy.

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Blog,
Adam Miller – Experience Design, Temenos Infinity