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Covid 19 in Digital Banking: How to Overcome it as Winners

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Covid 19 in Digital Banking: How to Overcome it as Winners

The world is facing a unique situation that no one was able to predict. It has accelerated the importance of digitalization, taking it from a strategic priority to a matter of survival. Never before, it has been so critical to focus on the customers because they are the ones who determine whether the financial service will exist after the COVID-19 crisis or not. Everyone wants to quickly catch up and reorient to the digital format, but it's not that easy and leads to mistakes.  The advantage can’t be extracted by the ones who hastily conducted the digital transformation, but only by those who did it right.

This article was originally published on the Financial Brand

How can the FIs prepare themselves to face not only the aftermath of this situation but also what can be done right NOW to instantly improve the customer experience in the RIGHT way? Customers in crisis are not ready to forgive shortcomings and wait peacefully for the elimination of those. They are vulnerable, they are nervous, they need a solution right away, and the solution must be perfect. So, the quality of overall digital performance is determined by three factors:

1. How well the customers context is taken into account;

2. How does your organization’s culture meet the modern requirements;

3. How effective is your business strategy in terms of COVID-19 quarantine.

In this article I will consider all three factors and show you how to purposefully create an advantage in this difficult time to turn the crisis into growth.

In these circumstances when almost everyone is facing some sort of a crisis - both personally or professionally, only those businesses who will be able to react quickly and adapt to the specific needs of the customers will be rewarded with long term loyalty and trust. At the same time, financial companies incapable of adaptation will most probably face very harsh times. The daily lives of so many people have been complicated due to the COVID-19 that there's no reason why people would choose a service that causes additional trouble and headache. That's why 100% remote financial products that solve customer problems in the RIGHT way are more demanded than ever.

Customers Context: Find How to Exceed Users Expectations

Digital financial service success is directly dependent on its ability to ease users’ daily lives and solve their problems, especially, in a situation of a crisis. If the product does not live up to user expectations and specific needs, they will seek another alternative that eases their lives in these difficult conditions.

There's a common faulty belief among many entrepreneurs. They are certain that it's enough to understand the user's problem in order to create a product that will solve it. But, truth to be told, this seemingly clear problem could not be solved without taking into account the specific context of it. The people's lives have changed dramatically in the last couple of months. Since the World War, there hasn't been such global despair, frustration, uncertainty, fear and overall inconvenience.

Financial companies are trying to find ways to cope with COVID-19 and provide the best service to their customers. Unfortunately, these efforts can become meaningless if they haven't dived deep into exploring the user context, motives and actions - three elements that are crucial for truly satisfying the users and solving the problems they are facing.

To better understand these three conditions, we need to explore the problem-solution cycle from the human perspective. It's an approach to defining a problem and finding a solution through three conditions. It starts with the context that defines the motives that then lead to actions. At each point, you can use specific tools that reveal the process and give you an idea of exactly how the financial service should work in order to solve the specific problem of the customer.

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Let's take a closer look at each of these elements.

Context

First of all, a person who is facing a problem has a context. There is an external context, for example, the situation in which the problem arose, the routine in which a person operates and the lifestyle of the person in general.

Most probably, here we can talk about the different threats and restrictions that come with COVID-19 and lead to significant shifts in the customer lifestyles and daily routines. People are working from home in the best case scenarios. In the worst case - there are many who have lost their jobs or who's once successful businesses have stopped producing income, so they are facing a very harsh situation. This has a direct impact on their spendings and long-term future plans like paying the mortgage and lease. There are also government regulations that forbid gathering and significantly complicate the possibility for people to attend the banking branches to get a personal consultation, advice or get paperwork done.

Then there is also an internal context such as emotions, thoughts and hopes. There are countries that have been deeply affected by the COVID-19 taking hundreds of people's lives every day. Many are living in fear about themselves and their loved ones. There's also a lot of uncertainty about how all of this is going to evolve. Many disturbing questions arise - how many people will be affected? How soon will the virus spread stop? Will there be enough food? Is the government preparing even more strict regulations? Will I lose my job? What will happen with my family income and savings? All of these questions create a wide range of mostly negative emotions that have a direct impact on human behavior and actions.

To identify the external context, you have to collect information about the potential users of your digital financial service. Create a user profile that describes the lifestyle and habits of the user persona.

Then, you should create an Empathy map to uncover the deepest understanding of the internal context. This uncovers the limitations and/or opportunities associated with the product use context.

There is no way to research user expectations without investigating both the internal and external user contexts. Truth be told, if you do not get to know your user's habits, lifestyle, environment, emotions and cognitions, you cannot understand how your product can help solve their daily tasks and problems.

This applies to ordinary everyday circumstances but in a situation like this, the financial institutions ability to truly get to know their users, their deepest fears and struggles, is a matter of survival. The companies that will be able to do their homework and find out how their customers feel and what kind of help they need from their financial institutions, will be the ones who will maintain their customer base and even attract new clients.

Motive

The identified context determines the person's expectations in searching for a solution to the problem. How customers perceive the problem, where they will look for the solution, and how they will evaluate the effectiveness and quality of it. This defines the motive for using your banking product or financial service. In fact, this is the job for which users hire the product.

In the case of COVID-19, there could be plenty of motives that the customers would hire your financial product for. For example, get a credit card without leaving their home. Or maybe deposit some cash to account for online purchases. Just ask your users, what are their main issues at the moment.

Then you can specify this job using the Jobs To Be Done framework (JTBD), and set the key priorities through the Red Route Analysis. You need to look deep enough to find the true motives that affect the actions of the users and their mental models.

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Actions

Next, the user takes action to achieve the needed solution. Customers use the product and interact with it. Your task is to ensure that the product provides the user with a clear, enjoyable and effective solution to their initial problem.

This is where the User Journey Map (UJM), user flow map, wireframes, UI design and testing come in as user experience design (UX) tools.

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For example, we all try to stay at home to defend ourselves from COVID-19, especially if you are old or with a weak immune system. And sometimes the only way to get food is online purchase. Online shopping does not accept cash. But what if someone doesn't have enough money in the account? Or even don’t have a bank account. How can the person deposit money without leaving his or her home? If such a problem exists banks could offer a solution as Home Deposit service, which is prepared to visit and take money in a safe way.

When you have found out and defined why people will choose your digital financial service in these circumstances, you have to be aware of the proper approach that allows materializing all of this knowledge. This leads us to the second important step of striving in the digital banking reality of COVID-19 - the Organization's Culture.

Of course it is a must to know your customers and their expectations well to survive COVID-19, but it’s not possible if your inner culture sabotages all of this and makes your customers mad. Let’s find out if your culture is ready for the challenge of COVID-19, and what can be done if it's not.

Read more about the problem-solution cycle from the human perspective

Organization’s Culture: Become Disruptor to Win the Crisis

In conditions of total uncertainty and financial pressure caused by the pandemic and the global economic crisis, millions are not adapted for a new and fast digital world. Looks like the economy will no longer be the same, business processes and life will develop according to unusual and new scenarios, for which many are not ready. In such conditions only disruptors can ensure success in the long term - even well after the COVID-19 crisis will be over.

To identify what kind of company culture your business executes and how it's possible to change it in order to become a Digital Disruptor, I'm introducing you to the Financial UX Design Matrix.

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In the digital world, companies that are disruptors have the greatest potential. Those are the businesses that have entered this crisis calmly and with no worries of going bankrupt. The secret of their success is to base all of their operations on two basic components: Value and Design.

Both of these elements significantly affect the formation of customer experience within any business. Let's take a look at how the use or the lack of the use of Design and Value distinguishes four different company types. If you spot your financial institution as one of them, I'm offering you practical steps that you can take right away to get closer to becoming a Digital Disruptor mastering this crisis with confidence.

Manufacturer

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This is a company that cares more about its production process than its customers. Against the backdrop of the efforts invested in product creation and standardization of production, the interests of consumers do not seem so important.

Therefore, the management of this company is convinced that basic functionality is enough for users. Design,in this case, is a tool that is needed to create packaging, to bring the product to the market in an attractive way.

The manufacturing company is an outdated type of organization that excelled in the industrial age. Today, facing the COVID-19 crisis is extremely difficult for such a company.

Steps for transformation

  • Switching the mindset from profit-oriented to user-oriented.
  • Reviewing the role of design in the company in order to turn it into a customer-centered growth factor that improves product quality.
  • Reinventing the company's product or service according to an advanced value proposition.

Seller

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Unlike the Manufacturer, Seller is more focused on promotion than on production functionality. The Seller collects data about customers, finding out their preferences and needs. Then this information is further used by a marketing department that develops advanced communication strategies according to the customer expectations to address them on an emotional level.

Sellers are well aware that, in conditions of high competition, it is necessary to use something more attractive to users than boring and standardized functionality. Therefore, they use an advanced value proposition and user interaction design as powerful promotional triggers.

Despite all the client-centered slogans of such companies, their customers don't feel they are concerned about their interests, face formal attitude and poor service. This kind of company would have actively advertised their high level of customer experience, as well as digitization efforts but when faced with the reality of the COVID-19 crisis most probably they are not able to ensure the promised quality of their service.

For the Seller’s company, a user-oriented mindset is a blind spot, and that becomes a key weakness. The problem is that, instead of sincerely understanding how to help customers and how to improve their experience, Sellers perceive a customer-centered approach as a magical way to increase profits. So, in a crisis they cut service expenses to keep profit, thus ruining customers loyalty and relations.

Steps for transformation

  • Changing of the basic guidelines of the business, the culture of the organization and goal setting, making customers a top priority.
  • Making the customer-centered design approach the number one priority by integrating it at all levels, starting with business processes.
  • Hiring or providing authority in the team to UX specialists who are experts in applying the design approach for the digital products to meet the customer needs.
  • Having business executives and key leaders that share the same understanding and facilitate the importance of user-centricity and Design approach throughout every process and employee.
  • Rethinking of the performance indicators and bringing to the forefront metrics related to customer satisfaction, as customer feedback, ratings, reviews and comments on social media.

Innovator

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Innovators in our frame are user-oriented entrepreneurs who make technological improvements. These are usually engineering companies looking for technical solutions that will better meet the needs of consumers to provide them with extra functionality.

They use Design thinking as a creative process aimed at finding new solutions. Innovators are sure that the functionality of a new level provides high value for consumers. Therefore, they are much more interested in researching and developing a new technology than caring about the customer experience.

The difficulties of Innovators are related to the fact that the development of new functionality is a key process for them, and they are not ready to delve into the psychology and consumer behavior. As a result, the products of the Innovator’s companies are often inconvenient and interesting only to a narrow circle of specialists and technology geeks.

Steps for transformation

  • Getting rid of the idea that functionality is enough.
  • Adapting a deep understanding that the main value for people is the experience.
  • Using the existing consumer orientation, it is necessary to take an additional step and orient the new technology, primarily to create a better experience for the customers.

Disruptor

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Disruptors are companies that leverage the maximum potential of all four vectors and are extremely customer-oriented. Very often, they are perceived as companies changing markets or even creating new markets through disruptive innovations. These are companies that reinvent experience, offering something new that is much more convenient, efficient and enjoyable than the boring alternatives already available on the market.

Disruptors see profit as the result of maximum user satisfaction, and as a result of realizing the meaning of the company mission that is focused on customers’ benefits.

This provides them with long-term competitive advantages, customer loyalty and community support, all of which results in above-average profits. Which is vitally important in such a crisis as COVID-19.

Disruptors often use the functionality that Innovators have created but develop it at the higher levels of the Value Proposition. Being obsessed with execution, they bring every element of the user experience to perfection. Their task is not so much to create innovative technologies, but rather to rethink the habitual way of life. And, that is what makes them true Disruptors.

They realize the maximum potential of their business model, product and market offer through the integration of a Design approach into the company's DNA. Thanks to this, Disruptors are able to build the most trusting relationships with their customers, and, in case of any business difficulties, they receive support and assistance from their fans.

Read more about the Financial UX Design Matrix

Business Strategy: Use the Appropriate Formula for the Digital-Only Covid-19 World

COVID-19 has put restrictions to our lives. This is the time when relying on people to adapt to the inconveniences of the product leads to a solid disaster. In the situation we are facing, the financial companies have to adapt to their customers and their requirements, not the other way around. Only those who will be able to serve their customers better than ever, will be the ones who will walk out of this crisis like winners.

Quick and effective adaptation strategy to the digital age is the key factor that will determine whether a financial company will lose it all or strengthen their position in the market. At the moment, a product that doesn't carry any value or benefit to facilitate the daily lives of people will not be viewed as a necessity. People are busy with sorting their daily lives out while working from home and helping their children with remote studies, this is not the time for spending money on some extra stuff that's advertised all around the media.

The global digitalization and the current situation with COVID-19 has completely changed the rules of the game in the financial industry. When the main goal was to make profit, it was enough with a product, business model and market distribution to ensure the company's success. Now it doesn't work that way any more.

In digitalization, what differentiates successful digital products from failures is the experience, benefit and value that the digital product provides. That's why the Digital Product Success Formula that was created in UXDA is based on the traditional operational model but adds some very important elements to the general business strategy. The scale in which a financial business integrates these key factors define the success potential of the financial company and its digital financial products.

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So, when it comes to the digital age or especially to survival in the tense circumstances, I define the business success potential by the following formula (in the brackets): product quality raised to the power of experience times business model raised to the power of design plus market distribution raised to the power of value (brackets closed), multiplied by the experience mindset.

If you want to evaluate your company, estimate each component by a value from zero to 5, taking, as a basis, the relevant characteristics of leaders and outsiders in the industry. Let's explore each of these elements.

Success potential

Success potential is the ability of a business to efficiently produce and deliver to the market a product or service that will be in such high demand that it will ultimately generate a positive financial flow in the long term. In the specific case of COVID-19, the Success potential could be the ability of the financial institution to overcome this crisis with gains. So, what are the elements that the Success potential depend on?

Product Quality raised to the power of Experience

First of all, it depends on the business offer to its end customers, i.e. product or service. In the digital age, it's not only about the quality characteristics of the product or service, but primarily about the whole experience it provides to the customers. This means that if you want to increase the success rate of the product, you must purposefully create a delightful customer experience. By increasing the degree of experience, you could significantly increase the chances of success and your company's survival rate in a situation of crisis.

Action plan

In order to create a great experience, we need to take into account the user's needs, wants, expectations, pains and motives for using the financial product. We can explore those through the already mentioned Problem-Solution cycle, the Design Thinking approach, business, user, product frame (BUP) and different UX tools and methods.

Business Model raised to the next level with the power of Design

The second parameter of the formula is the business model. It determines not only the type of business, but also the basic principles of its functioning, development strategy and organization features.

In this case, we are not talking about the visual aspect of design, but about a generalized design approach to create and develop human-centered business at all operational aspects and in business culture. This approach allows business adaptation to modern market realities, which will significantly increase its effectiveness.

Of course, an effectively built and well-functioning business has a very high chance of success. Working with banks, I see huge organizations with precise functioning rules. But as the situation with COVID-19 clearly demonstrates, competitiveness in the digital age requires extra flexibility and ability to adapt quickly. Switching focus from bureaucratic legacy to flexible customer-centered company development is critical.

Action plan

To increase the focus on customer satisfaction and accordingly ensure the ability to walk out of this situation as winners, financial companies should integrate Design thinking at all levels of their business with the aim of searching and executing more disruptive and effective ideas.

Market Distribution powered by Value

The third component of the formula are the operations of the business with the outside world. In the market distribution term, I include both the chosen market niche with a positioning strategy and the activity of promoting and delivering information about a product or service to customers or potential partners of the company.

In the so-called marketing age, it was enough to boost the marketing budget to reach more people and convince them to buy the product. But, today, it no longer works like that. We have the network effect, and anyone is able to post a bad or a good review on the internet. This determines whether a person will trust you enough to buy your product or quickly learn from his or her peers that it's just a pretty advertisement.

For the market distribution, the success multiplier is the value provided to the customers. As I already mentioned, in the situation of crisis, everyone is concerned about themselves and the well being of their families. Here the value and care that a product can provide by easing people's daily lives is the key factor for choosing it. We can see that in the circumstances of a quarantine marketing motivated mass sales suffer. People don't buy that much stuff they don't need, just because it was nicely advertised. Today, more than ever, it's about value and the ability of the business to help people in the situations that each of them are facing.

That's why I am adding, but not multiplying, market distribution rate to the formula, since, even with zero distribution efforts, business success still can be achieved by word of mouth, for example.

Action plan

It's possible to create value if, besides basic functionality, the product also provides pleasant usability and aesthetics that cause positive emotions─status or personalization according to the specific needs of different audiences and the possibility to create a feeling of being a part of a bigger mission that has an impact on the world.

Despite the closure of borders, the whole world has united in the fight against coronavirus, and participation in this mission may become a powerful community builder for every socially responsible business. For example, Facebook asks to mark your COVID-19 status to detect infection pathways. It’s a great idea to step out of the box and use your infrastructure to help people.

The Experience Mindset

The final and fourth element in the framework of this formula is the Experience Mindset, it's associated with our thinking. Thinking is a filter through which we perceive the world around us and the basis for which we set goals and make decisions.

Instead of an outdated mindset focused only on sales, you should implement a mindset that is focused on finding all possible ways to help your customers. This is the only way to survive in the age of digital disruption and in the difficult times that the unexpected COVID-19 outbreak has put us in.

Action plan

To ensure the financial institution can handle this crisis, a sharp focus on customers’ expectations and behavior is critical. It is your customers’ needs, perceptions and experiences that play a key role in the digital economy. Don’t try to manipulate them. Use empathy to become really useful to your customers, and they will provide an unexpected power for the growth of your business even in a situation of a crisis.

Read more about the Digital Product Success Formula

Building a Better UX and Tackling the Crisis 100% Remotely

Even though the situation we are facing, reminds us of a state of the war, the technological advancements of today can give us superpowers. This doesn't only apply to maintaining some processes remotely through digital channels. This also includes the possibility to execute a thorough transformation that would save your financial company from the COVID-19 crisis.

If you look closely at the frame of the four business cultures, you will find that the four coordinates - Focus, Proposition, Priority and Application correspond to the four extra elements of the formula, respectively Mindset, Value, Design and Experience. So, using the formula to enhance your business strategy will help to transform your culture into a disruptor and win the crisis.

Every financial institution who is willing not only to survive but to succeed in the digital age, was well aware of the need to digitize - long before the COVID-19 appeared. Some managed to do it fully, some did it partially, but some gave in to different kinds of excuses, most often related to the deeply rooted legacy and bureaucracy. Telling themselves that there is still time left and they don't need to hurry with improving the experience and development of the digital channels.

We can see that the situation with COVID-19 has fast forwarded the finance industry several years ahead. Those who started with a deep transformation of their mindset and inner culture, shifting it towards user-centricity and exploring the need of the users to get served remotely from the comfort of their home are tasting the sweet fruits of victory - probably much sooner than they had expected these investments to pay off. Meanwhile, those who failed to understand the importance of user-centricity and chose to make only a superficial visual transformation on the top-coat level, are facing a wide range of difficulties, as their digital products are pretty but unusable.

My financial UX team is working fully remotely. At the moment we have taken on the maximum amount of financial institutions that can be served in the best possible quality and we already have several companies waiting in the queue to transform their services.

Being present at our office has always been important for us, as then we have the whole team together in one room and we can really feel the synergy and inspiration flowing. But other than that we are a fully digital company and right from the start we have been working with financial institutions from all over the world remotely. Yes, in some cases we travel to meet our clients or conduct workshops, but mostly all of our work processes, that have been mentioned throughout this article, are conducted 100% remotely. So as a fully digital company we maintain the highest quality of our services for all of our clients totally remotely, no matter the external circumstances. We are delivering through UX transformations one by one and preparing these companies to walk out of this crisis not devastated but as winners.

This is the Time to Build Relationships with Your Clients that will Last

A financial company that's fully digitalized is independent of the external factors and gains an instant market advantage over competitors who lag behind.

In the moments of crisis and hardships people usually show their real face. Situations like these determine whether a relationship will break or it will grow stronger than ever. Exactly the same applies to the financial institutions relationship with their customers. This can be viewed as the lowest point OR as an opportunity to bond with the customers and prove to them that they have chosen the right financial institution that won't let them down.

If financial institutions integrate customer-centricity deep into their DNA, they will be able to stand strong, despite any circumstances. While if the main goal is still to make profit, not to help people, it's nearly impossible to survive with such an attitude in the situation of a crisis.

The key differentiators right now are value, best possible experience and relationships. If the customers understand that their financial institution has their back, cares about them and is actively looking for more and more ways to help them, I can guarantee that the company will receive trust, loyalty and respect from their customers. In such a scope and intensity that would be impossible outside of the context of the crisis.

So, it's up to you to decide if you are standing together with your customers or going against them in times when they need your courtesy more than ever.

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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.

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