7 Requirements for Banks to Succeed in the Experience Economy

In the digital age, ethics and responsibility lead to the best customer and employee experience. To make such efforts more effective, however, banks and credit unions must bring to the forefront of their product design and marketing the emotional experience of consumers. This will provide a clear path to differentiation.
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The pandemic has brought the fully digital economy closer with incredible speed. Everyone is talking about cashless transactions, decentralized crypto currency, e-wallets, challenger banks and online shopping. New fintech challengers are launching every month with offers that we weren’t able to imagine.

And we have NFTs (non-fungible tokens), which transform digital works of art and other collectibles into assets easily traded via blockchain technology. NFT sales volume has surged to $2.5 billion, and this is only the beginning. However, if we look deeper we find something interesting:

All of this is not about the emergence of a digital economy, but about an economy of experience. Digital created a new paradigm where economic relationships are formed by experience, taking the attention and emotions of consumers to the forefront. Experience becomes the determining factor of value.

What It Means:

In an experience economy, people buy and sell not products, services or features, but the experiences and emotions behind them.

Ordinary people now have easy access to amazing opportunities. Everyone can publish books without publishing houses, produce goods without factories and provide services without companies. All they need is a smartphone and a bank account.

We see that, in the digital age, financial interest is fueled by hype. Of course, such influence existed before, but in the context of global social networks and instant information exchange, it has become dominant. Digital banking plays a key role in the experience economy as it enables global funding, stock trading and purchases for ordinary people.

In the global experience economy, emotions play a key role. As a result, the largest companies in the digital age are focused on creating unique, innovative, rewarding and emotional experiences.

It may seem that money simply has no value in the experience economy. However, that is not true. It is because the consumer’s psychology has changed. In the modern economy, the value and power of experience greatly surpasses money.

How could financial companies better adapt to this new economy and generate experience that will attract demand, or even better, provoke hype? It requires an experience that goes beyond the usual and stands out from the noise of millions of “one-day” products. In the rest of this article I hope to help you with this transition.

Read More: 5 Digital-First Strategies That Can Turn Banks Into UX Disruptors

Breakthrough Strategy in the Experience Economy

Bank executives often say “show me the money.” Which makes sense, since business should be economically successful. But simply optimizing conversions or copying competitors’ functions — which can provide short-term benefits — does not affect the underlying source of product or company success.

For example, a company could invest heavily to copy Tesla, putting Tesla wheels and a big dashboard screen on a regular car, but they will not be able to copy Tesla’s core value and strategy — that special experience that Tesla provides through technology, design, service and brand ecosystem.

The Challenge:

Copying competitors only creates poor user experience and is part of the reason banks are considered ‘soulless.’ You need to find your own path.

Unfortunately, this imitative approach is still in use within banking. Financial institutions often put energy in the wrong direction, by looking at competitors and copying what they have. This turns digital products into Frankenstein solutions that complicate the user experience.

You need to look for your own path and your own source of strength. We believe that this source lies in creating awesome customer experiences through a holistic customer-centered approach. Only a unique brand strategy and product value will deliver a delightful customer experience and long-term digital advantage.

As we say when designing financial products at UXDA, “We need to add soul to the product.”

This could be the one of the reasons why customers still see the banking industry as soulless, focused only on making a profit. However we believe that real power lies in creating awesome experiences. But only a unique brand strategy and product value will add soul and create a long-term digital advantage.

What exactly should be taken into account? We believe there are seven key factors.

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1. Humanity

According to Forrester, 57% of consumers said they would be more loyal to a human brand. Human brands enjoy a 19 percentage point boost in how likely they are to be “loved” by customers, and outperform non-human brands by 20 percentage points on “likelihood to recommend,” the research found.

Giving back to your community and the environment are no-brainers when it comes to building your brand’s soul. The best way to show people the human side of a company is to run a responsible business. It must be committed to benefiting society, by making a positive impact on technology, people and the planet.

Running a responsible financial institution is not only crucial to attracting and holding customers. 64% of Millennials won’t take a job from a company that doesn’t have strong corporate social responsibility practices, according to research by Cone Communications.

Read More: 3 Ways to Create Digital Banking User Experiences that Build Loyalty

2. Purpose

Accenture’s global survey of nearly 30,000 consumers in 2018 found that 62% of them want companies to take a stand on current and globally relevant issues like sustainability, transparency and fair employment practices. The closer a company’s purpose aligns to their own beliefs, the better. This trend has only accelerated since.

This helps to explain why the fastest growing fintechs have reached millions of customers in just a few years. They have brought higher purpose and care to their customers, thereby finding a place in consumers’ hearts. A few examples:

  • Revolut brings freedom, with a sustainable alternative to traditional banks.
  • Chime provides accessible banking that makes a profit with customers, not from them.
  • Nubank exists to free people from the bureaucracy of the financial system.
  • Klarna makes shopping smooth and frictionless for consumers.
  • Wise delivers money without borders, saving on fees.
  • BELLA Loves Me (which UXDA designed) is a conversational banking app powered by love in a numbers-driven industry.

Key Measure:

Meaningful brands that are viewed as making the world a better place outperform the stock market by 134%, Havas found.

Challenger banks are not afraid to show customers who they are and what they stand for. The highest customer-centricity you can strive to achieve in financial services design is a soul-driven financial product — one that really makes the world a better place for living.

More than three quarters (77%) of consumers buy from brands that share their values, according to Havas. And 52% of respondents indicate they prefer brands that believe in something greater than just the products and services they sell.

3. Connection

To establish an emotional connection, banks and credit unions need a product to stand out in customers’ hearts. This requires an emotional touch that resonates with peoples’ values and beliefs.

Emotionally connected customers generate lifetime revenue nearly six times that of highly satisfied customers, according to Motista. Credit card customers who feel emotionally connected spend 46% more annually than those who are just highly satisfied, and their lifetime value is eight times higher.

Financial institutions need to go beyond general target data and resonate with their audience based on the beliefs they care about. Get to know your customers as best you can — what they like and what they don’t: events, places, brands, TV shows, blogs, services, etc. It is important to understand their surroundings in order to connect on a personal level and understand what is important to them. This is how product ambassadors are born.

Read More: 5 Things You Must Do to Become a True Digital Banking Competitor

4. Story

70% of consumers say brands should boost positivity and share uplifting stories, according to Twitter research. This is because people live through stories and want to feel the vibe and get more dopamine (the feel-good chemical of the brain).

Key Question:

Who is the main character in your brand story? It’s not your product. The hero is your customer, and the product is just an ally, like Yoda for Luke Skywalker.

We humans are constantly trying to organize the chaotic information around us into some kind of easily understandable story. A story helps us find the right answer and deliver it in an easy way highlighting the core data in our experience. Creating such a narrative — sharing your purpose, values and personality in a clear and emotionally engaging way — will support your institution’s growth for years.

Some examples of brand stories:

  • Google has the answer to everything — algorithms and data.
  • Apple has design and creativity.
  • Nike has the power of personal achievement that encourages us to become the winner in life.
  • Red Bull empowers life, making every moment count.

These stories become the main value these companies provide to the customer, and all their communication and products are built around this.

5. Personality

Banking is under attack by clones. These are the thousands of soulless financial products lacking personality that create an ocean of sameness. To bring product personality to life, banks and credit unions need to dig deeper and discover the true essence of a financial brand.

Personality is a set of emotional characteristics through which users perceive a product. For example, Deloitte found that customers feel trustworthiness (83%), integrity (79%) and honesty (77%) are the emotional factors that most align with their favorite brands.

Another study, from Stackla research, found that 86% of consumers say authenticity is important when deciding what brands they like and support. However, 57% of consumers think that less than half of brands create content that resonates as authentic.

Differentiator:

Be different and authentic to build personality through stunning product design that expresses the values of the institution.

Products that are assembled from functions that are defined from marketing reports about abstract consumers are unlikely to evoke an emotional reaction. Every tiny detail should express the authenticity of the product. Language, design, layout, style, architecture and functions should reflect a financial brand’s true identity.

McKinsey tracked the design practices of 300 publicly listed companies over a five-year period in multiple countries and industries. They found that companies with the best design practices performed twice as well in terms of revenue and total return to shareholders.

Read More: How Bad CX in Banking Undermines Great Marketing 

6. Passion

Behind a product with a soul, there are always passionate people who fill the product with their energy. Steve Jobs said, “People with passion can change the world for the better.”

A passionate team is highly efficient and adaptive. According to Deloitte, more than 90% of passionate employees feel confident when facing any technology disruption, easily figure out how to acquire new skills or tools, if needed, and achieve a better understanding of a problem or situation, regularly challenging their assumptions and considering what else is possible.

Simple Formula:

The product vision must be so inspiring as to sustain the passion of the entire team — which the customer will feel.

It doesn’t matter who you are — an employee of a fintech startup or a bank product owner — your attitude toward the product is critical. If the owner does not passionately believe in the product, no one will believe it.

You need to align the external customer experience with the internal passion. It is not easy to bring such a passion to life. Despite the fact that digital technology is a data-driven business, users evaluate everything through emotions. If you think about your team’s current level of passion, would you be happy if that’s what your customers felt in their experience with your product?

7. Focus

One of the biggest threats to a financial institution is fragmented and uncoordinated products, services and business processes, according to Salesforce. This is especially true for large companies, since it creates a chaotic and unsatisfactory user experience.

Three quarters of customers expect consistent interaction between departments. However, just half (54%) say that sales, services and marketing teams generally do not seem to share information. At the same time, ensuring a seamless experience through all channels is a top priority for 42% of consumers, according to a U.K. study by Wunderman Thompson.

All elements of your service, both external (communications, product design, visual style, user interface, support, etc.) and internal (business processes, employees, back-office software, operating principles, etc.) must be focused on a singular purpose.

There’s absolutely no way to win this game by tampering with only rational parameters. We believe the soul-driven approach that provides both problem-solving digital solutions and an emotional user experience will to empower banking sustainability in a broad meaning. It creates an emotional connection with customers and succeeds in the long term.

Even if your competitors copy-paste your functionality, they can never copy-paste your soul.

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