Mobile UX: Five ways fintech apps are outcompeting traditional banking apps

One of the most important factors when choosing a finance app is user experience. We reveal five important UX processes that fintech apps use to remain competitive and why traditional banks should adopt these methods to minimize the loss of valuable customers.

Research has found that users now spend 10.8 times more in Financial Technology (Fintech) apps than traditional banking apps so it’safe to say that fintech apps are better at keeping users engaged. The proliferation of these Fintech apps is exponentially shifting focus from physical transactions to digital payments.

One of the most important factors, when people choose a finance app, is user experience. A survey from Adaptive Lab on the functionality and user experience of five top banking apps in the UK showed that none of the apps scored more than 75% on either functionality or usability. Most traditional banking apps have compex navigation and outdated UX, making the app painful to use, which causes a significant reduction in app sessions.

On the flip side, fintech companies understand the significance of design thinking and building an excellent mobile user experience. They focus on delivering innovative solutions to users by weaving a delightful UX into their app's design and development process. As a result, they've been able to skyrocket their customer base, with 90% of Americans now using fintech services.

Read on for the five most important UX processes that fintech apps use to remain competitive in the expanding finance industry and why traditional banks should adopt these methods to minimize the loss of valuable customers.

1. Conducting effective UX research to understand users

When developing your mobile app, it’s crucial to understand who you're building for, what problem your app is trying to solve, and how users will interact with your app. This is where UX research comes in.

Design Modo describes UX research as "The process of understanding user behavior, needs, and attitudes using different observation and feedback collection methods." The primary goal of UX research is to view your app from a user's perspective and make informed design decisions to create enjoyable user experiences.

Fisdom, one of India's leading fintech companies, conducted extensive UX research to improve its signup process. From their research, they realized the Know Your Customer (KYC) form at the beginning of signup was too cumbersome for new users and moved this form to the end of the signup process. As a result, they saw more users complete the signup process and a significant reduction in the drop-off of new users.

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Fisdom invested in user research and redesigned their signup flow to prevent users from failing to complete the signup process. Source: Toptal

UX research tips for traditional banks

Here's a step-by-step guide for banks to carry out effective user experience research:

  1. Define your research objectives: Be clear about what you want to learn from users, the goals of the research, and its impact on your app.
  2. Determine the users you want to survey: What demographics of users would you like to survey? What are their needs, and why do they use your banking apps?
  3. Choose your research method: Based on your resources, decide the means of gathering information. Research methods could be online surveys, user interviews, usability testing, etc.
  4. Design research questions: Brainstorm objective, open-ended questions that’ll enable you to gain insights into users' perspectives.
  5. Conduct research: Gather information and data through the selected methods from users.
  6. Analyze results: Examine the results of your research, and identify UX flaws and customer needs. These results will help you make a more informed decision that improves your app's mobile UX.

2. Designing an intuitive user interface to make UX enjoyable

The next step after conducting user experience research is designing your banking app user interface, or UI. Base your app's UI design on the information and insights gathered during the research while incorporating UX best principles. 

A primary UX principle is to avoid overwhelming users with too much information that’ll cause them to have a disorienting and exhausting experience when using your app. For example, if a user just needs to make a payment, you don't want to display distracting information that would confuse them and eventually cause them to bounce off your app.

Fintech apps understand this fundamental principle and only display vital information to users. For example, Revolut, UK's most valued fintech, recently redesigned its app for their new features. In doing this, they retained their intuitive user interface that enables users to manage their finances all in one place. This redesign has contributed to their increased market share of app downloads and a 500% rise in value.

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Revolut maintained a clean and intuitive user interface despite adding new features. Source: Altfi

User Interface design tips for traditional banks

Designing an efficient mobile banking experience is more than just good aesthetics. In order to make your app UI intuitive, bear in mind these design principles:

  • Keep content relevant and simple: When designing your app, keep in mind that less is more. Avoid cluttering your app with multiple banking options and buttons.
  • Use typography to prioritize content: When designing your banking app, utilize typography and fonts to your advantage. Create a hierarchy of content by using different font sizes, font weights, and font arrangements to aid readability when using your app.
  • Employ progressive disclosure: Progressive disclosure means showing only the most relevant information to users at once and only revealing additional options and actions upon request. Progressive disclosure ensures that users aren't overwhelmed by sudden cascading details when using your app.
  • Personalize notifications: Notifications can be intrusive. Mobile app users don't want to receive too many irrelevant notifications — your UI should allow users to select what they want to get notifications for. These personalized notifications will enable them to engage with your banking app more beneficially.

3. Offering a seamless onboarding process to set users up for success

Truth be told, financial apps aren't the most interesting to use. Users just want to get into the app, complete their transactions and continue their daily activities. A lengthy onboarding process is tiresome and increases users' frustration: Clutch found that an onboarding experience of more than two minutes could cause 33% of users to get frustrated. Yet, you can't skip the onboarding process; it's vital to show users how to get the most from your app, educate them about the functions, and gather profile data to deliver personalized information.

The onboarding process is even more critical for finance apps because they must comply with various policies such as Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations in their customer onboarding processes. Acorns, an American fintech for investment, was able to make their onboarding enjoyable, using engaging animation and concise text to explain what the service does for first-time users and ensure a seamless signup process.

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Onboarding flow for Acorns describing what the app does. Source: Sparkpost

Onboarding tips for traditional banks

When designing your banking app, adopt the following onboarding best practices to help smooth onboarding and get users up and running quickly:

  • Use splash screens to make a great first impression: Splash screens should welcome users with a friendly message and excite them about the features of your banking app. In addition, make sure the "Sign-up" or "Sign-in" buttons are present on the splash screen so users can log in or create new accounts.
  • Keep steps simple: First-time users are keen on exploring your app immediately after download. The last thing you want is to onboard them with too many details on a screen. A general rule is to show a key functionality or benefit on each screen instead of crunching so much information per screen. This approach makes the users quickly absorb the information.
  • Keep signup forms short, sweet, and relevant: During onboarding, it's tempting to ask new users lots of questions and details. However, doing that at this stage will bore users, and you'll end up losing them before they even register. Ask only for relevant information and use multiple short forms, instead of a single long form.

4. Prioritizing accessibility for everyone

With over 1 billion people living with some form of disability, mobile app accessibility isn't just a nice to have — it's the right thing to do. In mobile UI design, accessibility can mean ensuring your UX is customizable based on the user's visual ability or using tactile cues to guide the user from one screen or action to the next.

Studies show that digital retail loses $6.9 billion a year due to poor accessibility practices. Accessible fintech apps allow clients with disabilities to manage their finances from the comfort of their homes. Users can now use assistive technologies to invest money, transfer funds, pay bills, deposit checks, and more.

Accessibility tips for traditional banks

Accessible UX design involves designing for intuitiveness and simplicity. To achieve accessibility in your banking app, we suggest the following:

  • Ensure adequate color contrast: Consider the contrast of text against the background as it affects readability. Poor color contrast can cause those with visual impairments to make transactional mistakes when using your app. According to Web Content Accessibility Guidelines (WCAG), fonts smaller than 18points need to have at least a 4.5:1 contrast ratio against the background.
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Comparison between good and poor contrast for accessibility. Source: Business2Community
  • Design for user-friendly touch targets and interactions: Design touch targets like buttons to be at least 9mm x 9mm. This way, users can adequately interact with your banking app without the fear of errors when performing transactions.
  • Don't use color alone to convey visual information: Color is an excellent tool for distinguishing interface components and communicating information, but using color alone has limitations and is never enough. For example, those with color blindness will find it challenging to recognize actions. Instead, convey information by using shape, text, and size.
  • Test for accessibility: Automated tests help you discover accessibility issues and correct them. Bitrise allows you to automate accessibility checks for your banking apps and confidently push out apps that match accessibility standards.

5. Assuring security to build and maintain users’ trust

In January 2021, The Reserve Bank of New Zealand experienced a data breach when hackers accessed information through one of its third-party file-sharing services. User data is exposed to potential cyber-attacks and identity thefts due to poorly implemented cloud processes. According to a McAfee report, the global cost of cybercrime is nearly $600billion.

Financial app users are at an even higher risk of cyberattacks because of their increasing dependence on mobile devices for maintaining bank accounts and making transactions. By the end of 2020, trojan attacks rose by 15% — it's no surprise why security is such a concern for financial apps.

Meeting security standards is a primary way to ensure a reliable mobile UX and allow users to feel safe without worrying about having their information within the app. Fintech companies utilize reliable security protocols and emerging IT infrastructure to protect users' sensitive data while ensuring compliance with security standards like ISO-27001 / ISO-27002.

Security tips to boost UX for traditional banks

Your banking app must make users feel safe, knowing their information won't be mishandled. We recommend you consider these security practices for improved mobile UX:

  • Let users know how you use their data: Communicate to users about how your app will process their personal information and how you make sure it’s stored securely. You can do this during the onboarding process and also add a separate screen that explains this.
  • Use of biometrics for authentication: With passwords becoming an increasingly unreliable authentication method, biometrics serves as an ideal and secure alternative. Biometric security verification, such as face recognition, fingerprint scan, and iris recognition allows users to identify themselves within seconds and reduces the hassle of stolen or forgotten passwords.
  • Implement Two-factor authentication: Two-factor authentication, or 2FA as it is commonly called, adds an extra level of security besides using a phone password to log in. Some common ways to implement 2FA are using time-based OTPs, sending emails, SMSs, or even push notifications. Integrating 2FA into your banking app's UX will go a long way in gaining customer trust and building security.

Traditional banks need to prioritize UX to ensure that their app remains competitive

Banks and fintechs both offer digital solutions to customers. What sets the two apart is the method of delivering these solutions: generally speaking, fintech companies understand design thinking, prioritize user experience, and leverage cutting-edge digital transformations to deliver accessible financial solutions.

Traditional banks that want to catch up with fintech apps and meet the constantly changing customer expectations need to put more emphasis on user experience and put users at the center of their app design. 

By saving valuable hours thanks to automation and ensuring the highest-levels of security, mobile-specific CI/CD solutions like Bitrise you can help teams shift the focus to what matters most in app development: improving the user experience. 

If you'd like to learn more about building better mobile apps in the heavily regulated finance and banking space, download our latest report, Mobile product success in finance and banking, 2022 or sign up for our upcoming webinar How to win in mobile finance: A panel discussion.
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