Category : Enterprise Applications

Customer Experience Digital Transformation Enterprise Applications Fintech Insurance

FinServe trends post COVID-19: Multiexperience, Embedded banking, Platformification, Personalization & More

Nov 10,2020 / By / No Comments

Like many other industries COVID-19 significantly impacted the Banking & Financial Services Industry too. Though the lockdown norms are being relaxed slowly, customer behavior has changed drastically. Customers no longer visit offline branches to conduct their financial transactions. They are wary of venturing outside their homes and for them to regain confidence in the in-person branch visits will not happen soon. As a result, financial institutions are forced to focus their customer targeting efforts on channels that are readily available via digital mediums.

The fact of the matter is for banks, financial institutions, and insurance companies, the face to face interaction that worked well in offline branches has to be maintained online. This is seen as a huge challenge for them. Hence, there needs to be a total shift in company tactics that can somehow retain that human connection with customers. The financial sector is poised to undergo a drastic change in the near future and customers should be ready for that change.

Let us take a look back in the pre-COVID19 period as a tipping point between the new normal and the post-COVID era. In a recent research conducted by the Digital Banking Report around digital transformation, customer experience, use of data and advanced analytics, innovation, and technology, it was clear that the financial industry leaders already knew what needed to be done, and in many cases, how to proceed. With COVID19 the pace of adapting and digitally evolving has accelerated, bringing a new opportunity as well to build loyalty among consumers.

In the new normal, financial institutions witnessed an environment where the way work, how consumers bank, how employees learn new skills and how brands are perceived are all different. The degree to which these changes take root is driven by both business and societal dynamics as well as how long it takes to move to a new equilibrium.

In a special report, After the Virus, Cognizant’s Center for the Future of Work examines the implications of COVID-19 five years from now as it relates to work, education, entertainment, e-commerce, human engagement, and the environmental agenda. The report presents some interesting insights to lay a foundation of what the banking industry must do to fast forward their business strategy and keep abreast with the changing consumer behavior and better position themselves as future-ready.

In this article, we will take a look at some critical factors that financial institutions and banks need to take on an immediate basis to adapt to the new normal and remain competitive.

Critical factors for financial institutions and banks to adapt to the new normal and remain competitive

Multi-experience for financial services will remain to be top technology trends in 2020

As per Gartner reports, Multiexperience remains to be amongst the top technology trends of 2020 and is poised to replace technology-literate people with people-literate technology. Instead of people getting accustomed to the evolving technologies, it will so happen that the technology will evolve to understand the people better.

Multi-experience is all about leveraging various modalities, digital touchpoints, apps, and devices to design and develop a seamless experience for the customers. The idea is to interact with the customers at as many touchpoints as possible to offer a consistent customer experience across the web, mobile, app, and other modalities.

We need to take note that multi-experience is not omnichannel. While omnichannel involves tapping the user touchpoints across all the channels, multi-experience is about developing effortless customer experiences across apps, websites, and modalities of voice, touch, and text, irrespective of the channel.

The key difference between omnichannel and multi-experience is the core. Omnichannel is all about technology, whereas, multi-experience is all about people. This difference marks the shift from technology-literate people to people-literate technology.

Here’s a four-step multi-experience model proposed by Jason Wong, Research Vice President to apply multi-experience to a digital user journey:

  • Sync me: Storing a user’s information, which the user can find and access anytime.
  • See me: Understanding a user’s context, location, situation, historical preferences, and then offering better information and interaction to the user.
  • Know me: Using predictive analytics to make suggestions to the user
  • Be me: Acting on the user’s behalf, when given permission, and making the best decision for the user.

If we talk about financial services, Fintech is promoting a vision of a world without banks. Blockchains and cryptocurrencies are funding transactions without paper money or credit cards. Robo-advisers are providing portfolio management without managers. Mobile payments are turning phones into credit cards. The ability of upstart companies to provide high-performing web experiences is not hindered by legacy infrastructure — or legacy business models.

Customers want a fast, seamless, immersive, cross-channel digital experience that satisfies, and even anticipates, their needs. This is especially true of millennials, a generation quickly becoming the dominant demographic. Combine millennials’ expectations of brands in general with their fundamentally different banking and investing habits, and it’s clear that FSIs must adapt to those needs and requirements.

It’s not enough to provide exceptional experiences just for basic online activities. FSIs must prove themselves by offering complex activities, such as applying for a loan or configuring products. As institutions offer ever-more complex digital transactions, the focus on performance only increases. The reality is that today’s engaged consumers — influenced by their daily interactions on social media and other platforms — expect all sites and apps to be high performing and lightning-fast.

Not only digital but embedded banking services is the need of an hour

While not every consumer will want to do all of their banking digitally, most will expect that option in the future. Some of the banking services will include opening a new account, changing the terms of a loan, reaching a bank representative, etc. The experience must go beyond ‘just digital’ to become both seamless, simple, and user-friendly. With this, the core business of banks and financial institutions will encounter the next level of challenge. There is a question if banking will be controlled only by banks? As the challenge remains to be that customers will demand banking services to be available and integrated with different points of sale, devices, service providers etc. In short, banking services are expected to be embedded into virtually anything and everything.

Additionally, it leads to the discussion on banking service being offered in SaaS (Software-as-a-Service) model, pay-per-usage, subscriptions, renewals, etc. However, these terms were never traditionally associated with banking services, gradually there is growing customer demand for such a flexible approach to payments, investments, loans and other such banking services.

Contextual engagement and personalization of Banking & Financial Services

The expectation of real-time personalized offers and messages has increased dramatically. This requires a 360-degree view of the customer journey and advanced analytics to deliver solutions across channels. Personalization is currently the number #1 banking marketing trend. While the financial sector lags in adoption of personalized customer experiences techniques, consumer loyalty is at stake if more financial institutions don’t reimagine their efforts. To note, choose financial institutions based on how well they incorporate personalized experiences.

Certain banks are taking tips from retailers on personalized customer experiences by using data analytics, coupled with artificial intelligence (AI), to offer customers personalized experiences. As per Everfi’s banking trends for 2020, international banks like the Commonwealth Bank of Australia and the Royal Bank of Scotland use a model of “next best action” to follow consumers’ financial journeys, predict the future financial products or services they might need, and personalize product offerings and advice to each consumers’ unique situation or life stage.

Banking trends emphasize personalized experiences through Chatbots, and Mobile Apps

  • S. banks are using fintech in creative ways to appeal to a generation raised by technology. A mobile app packed with features is top on their list. Nearly 80 percent of consumers prefer using a single app to manage their finances.
  • More than a million Bank of America customers use an AI bot named Erica that is available through their app. Erica helps customers pay bills, shop, and more.
  • Citibank recently released a mobile app, 360º Financial View, that aggregates online financial tools and investments, even those outside Citibank. Citibank provides the all-in-one app to both current and potential customers. This allows Citibank to expand their market reach by advertising their products and services. It also gives users the option to open a new Citibank account.

It’s no surprise that personalized customer experiences dramatically improve the bottom line. Financial institutions that implemented the next best action model saw a 30 to 40% increase in sales. By anticipating customer needs and catering to them with personalized offerings, financial institutions are able to generate increased revenue, all the while meeting customer expectations around personalized experiences with their trusted banking institutions.

Digitally infused branches and platformification approach

As already adopted in other industries, financial institutions especially banks need to look beyond the standard set of services and consider platform solutions to assist consumers during select customer journeys for example; car buying, investing, loans, home purchase, etc.) They can consider their bank website to be the ‘main branch’ and all offline branches will act as secondary branches for the time being.

A financial institution’s website will be the primary go-to branch for customers where they can seek all kinds of information. The website will address all their needs and concerns just like any offline branch. If person-to-person interaction is needed, virtual consultation with the branch staff needs to be arranged. With this eventually, financial institutions can expect the number of offline branches to be reduced considerably.

But even with a few offline branches, a few leading organizations try to bring back the heyday for branches by making them engaging hangouts with increased digital services — from interactive kiosks to digital financial education modules and more.

 

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Branches will provide great opportunities to engage customers and provide highly personalized financial education.  We can also expect further investment in employee training and branch redesigns as they will continue to deploy digital financial tools.

Financial institutes prefer a new channel mix to enhance customer experience

With the potential for many consumers to work remotely indefinitely, financial institutions and banks opt for a new set of delivery channels which may include voice devices, video conferencing options, IoT devices, gamification methods, etc. The proliferation of mobile devices and shifting preferences among demographic groups mean that customers expect more real-time, cross-channel capabilities (such as status inquiries and problem resolution) than ever before. Physical distribution will still be relevant but far less important, and banks must learn to deliver services with a compelling design and a seamless unconventional customer experience.

As per a McKinsey report, banks have recognized that customer expectations are increasingly being set by nonbanks. There are questions to be answered like why does a mortgage application take weeks to process? Why does it take an extra week (or two) to get a debit card online versus in a branch? Why can’t a customer make a real-time payment from his or her phone to split a dinner check? There is an urgent need for banks to respond to these questions by improving their customer experience and meeting their customers’ changing expectations. Financial services is the only business where you can be rejected as a customer. In an age where mobile devices provide real-time transparency on just about everything, it is critical to provide customers with information about the status of an application or what other documents are required. Account balances must be consistent across channels, and banks should consider the real time updating that an on-demand e-commerce application like Amazon provides and aim to deliver that level of transparency when it matters. Working on such innovation provides opportunities for banks to improve and differentiate their customers’ cross-channel and cross-product experiences.

Contactless technology will ignite a cashless payment surge

In a recent Capgemini Consumer Behavior Survey conducted in April 2020 done for COVID-19 and the financial services consumer, states that in the post Covid19 era digital channels and contactless technology is preferred by consumers which will ignite a cashless payment surge. More than 52% said they prefer self-service bank mobile apps during the Covid-19 outbreak as compared to 47% before the virus pandemic. Similarly, 54% say they are conducting bank transactions over the internet during the pandemic. For the insurance sector, channels such as the firm’s website (27%) and social media (26%) remained the top interaction choices for policyholders, a noticeable jump in numbers in comparison to before the Covid-19 scenario.

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Additionally the report mentions that banks, governments, regulators and banking associates minimize one-on-one contact and encourage customers to use contact-free digital services. The World Health Organization (WHO) recommended contactless payments versus cash, if possible, as a way to limit the spread of the virus that may linger on paper currency. In countries like China, banks are using ultraviolet light or high temperatures to disinfect Yuan bills, then sealing and storing the cash for one to two weeks before recirculation – depending on the severity of the outbreak in a particular region.

Financial firms offer waivers, donate services and business continuity support

Banks and insurers, FinTechs, InsurTechs, and BigTechs are stepping up – worldwide to waive off charges on digital transactions, or offer a moratorium on loan or insurance coverage payments.

ICICI bank in India, launched ICICI Stack, a digital platform that offers nearly 500 services from retailers, FinTechs, and e-commerce merchants. China’s Ant Financial plans to open its payments platform Alipay to third parties, to provide business continuity during emergencies, and to become a part of customers’ digital lifestyle.

Citigroup (USA) is pushing proactive reminders and helpful instructions to customers about mobile and digital banking services. Other banks are taking steps such as fee waivers, payment deferrals, and loan modifications in response to customers’ changing circumstances. Insurers are also waiving out-of-pocket costs for treatment related to coronavirus. Many financial institutions offer community aid, donations and healthcare support to help overcome pandemic crises.

In Conclusion

Widespread adoption of new-age digital channels such as chatbots, automated voice assistants, and social media tools appears to be an inevitable truth for banks and financial institutes.

Throughout the unpredictable weeks and months ahead, the crisis-sparked surge in digital activity is bound to generate new customer habits that require banks and financial institutions to function online. Ultimately, the question is will full digital rein as the exclusive customer engagement channel? Not too likely, but it may become the primary channel that customers use to engage with banks and financial service providers. Each day of confinement promotes digital use, that begs another important question – Are Financial services incumbents ready to prioritize digital capabilities and offerings for success in a virtual world? The answer lies in the truth that the global pandemic has forced them to this reality and eventually shaped an enhanced customer experience.

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Blockchain Digital Transformation Enterprise Applications

Webinar overview – Introduction to Hyperledger Sawtooth: An open-source enterprise blockchain platform

Sep 4,2020 / By / No Comments

Blockchain, the universally distributed open ledger system has gained visibility and acceptance in multiple industries – BFSI, retail, healthcare, logistics, real estate to name a few. Blockchain is an innovative mix of decades-old, tried and tested technologies including:

  • Public key cryptography (1970s)
  • Cryptographic hash functions (1970s)
  • Proof-of-work (1990s).

Over the years many blockchain systems have been developed – Hyperledger Sawtooth, Hyperledger Fabric, R3 Corda, Ripple, Quorum, and more. Among these systems, Hyperledger is Developed and maintained by Linux Foundation, an umbrella organization, that maintains various open-source blockchains

Hyperledger has been used in various industries:

  • Walmart brought unprecedented transparency to the food supply chain with Hyperledger Fabric
  • Honeywell Aerospace creates online parts marketplace with Hyperledger Fabric
  • ScanTrust Brought Transparency to the Supply Chain with Hyperledger Sawtooth

In our recent webinar, Shripada Hebbar, our Principal Technical Architect, simplified the concept of blockchain and helped participants understand how Hyperledger Sawtooth can be implemented for businesses – with a live demo.

Hyperledger Sawtooth and its application

Hyperledger Sawtooth — is an open-source business blockchain (distributed ledger) platform. The primary aim behind Hyperledger was to create a blockchain platform that could be easily implemented by different businesses.

Key discussion points of the webinar included:

  • Short introduction to Blockchain technology
  • What problems blockchains can solve
  • An overview of open-source implementations that enterprises can adapt and use
  • Introduction to Hyperledger Sawtooth – an open-source blockchain
  • Demonstration of a use case – voting system using Hyperledger Sawtooth. The Github link for the live demo can be accessed here.

You can watch a recording of the session here.

If you want to know more about how we can help you create digital solutions for your enterprise using emerging technologies like Blockchain, AI, AR/VR, and more please drop an email to me at [email protected].

I hope you found this webinar overview useful and look forward to joining us in our future webinars on other topics pertaining to creating delightful digital experiences that can simplify lives of your consumers.

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Digital Transformation Enterprise Applications Fintech

Will revolutionary digital payment trends create a future or just a fad?

Sep 2,2020 / By / No Comments

What lies ahead in the post COVID19 era?

It is believed that the world of payments has fundamentally transformed over the last few years and is set to change even further. The industry is witnessing an accelerated growth in electronic payments with the advent of new and disruptive market players. As per the World Payments Report 2019, growth of non-cash payments is set to skyrocket globally, with digital payments reaching at more than $1 trillion transactions by 2022. Additionally, the on-going Covid19 crisis has fueled the need to opt for non-cash payments. Digital payments once a convenience, is now seen as a necessity for consumers across the globe.

Even before the coronavirus crisis, the global digital payments industry had been reshaped by technology and redefined by regulation, with the emergence of new economic powers, and changes in the global currency landscape. Most importantly, payments refocused from a commoditized proposition to a strategic, value-adding solution; one that is offered with greater focus on the broader commercial and transactional context within which a payment (or a transfer of value) takes place.

Indeed, the world of payments in 2020 will look very unlike as it was, as market transformation had already begun. The competitive landscape will be redefined by the entry of non-traditional providers, the evolution of new solutions provided by financial institutions, and the development of strategic alliances that cross traditional sectoral boundaries. Besides transformation, there will be major convergence around products and solutions linked to payments; around technology platforms that will be driven by innovation in nature and reach.

In this article, we will take a closer look at some of key trends that will change the global payments outlook beyond 2020 and how digital payments will create a future in itself. But, before we go through the major trends, let us identify some of the active digital payment methods already available to consumers:

Digital payment methods for seamless consumer experience

Convenience is the key for extensive usage of banking cards

Banking cards such as Mastercard, VISA, Credit and Debit cards are the most widely used method for online payments. Consumers conveniently pay using their debit or credit card on online platforms as well as in-store. As per a recent PWC report, transactions happening through cards had seen an upward trend as there were concerns around transmission of virus through physical currency boosting online transactions. While in the US, credit card usage has made an upsurge to a level that many finance firms also opt to develop mobile applications for their customers to manage their credit card transactions and other details.

Financial inclusion for underbanked through USSD

USSD is the most innovative payment service that works on an Unstructured Supplementary Service Data (USSD) channel. It is introduced specifically for the underbanked who does not have the convenience to use the mobile banking or internet banking functionality. USSD only requires to dial *99# through your mobile device and enter the details asked to initiate banking services, he/she will be able to check their bank balance or get to know about their bank account statement.

Powering multiple banks through single application

With recent real-time payment systems available like UPI, customers can easily send and receive money or make online payments. UPI or virtual payment address has been one of the most widely used digital payments methods. It is a system that powers multiple bank accounts into a single mobile application, merging several banking features, seamless fund routing & merchant payments into one hood.

UPI will only require a Virtual Payment Address (VPA) to make the payment successful. The PWC report states, post Covid19 scenario has resulted in a surge of UPI transactions for essential services including the QR Code based payments.

International funds transfer via Fedwire and CHIPS

The US payment clearing and settlement process consists of 3 different systems: Fedwire, CHIPS (Clearing House Interbank Payment System), and ACH (Automated Clearing House). Both CHIPS and Fedwire are considered for wire transfers and for large value domestic and international USD payments. While ACH is considered for low value but higher volume domestic payments.

CHIPS is the largest private-sector, US based, money transfer system. It is a competitor as well as a customer of the Fedwire service of the Federal Reserve as it allows banks to make transfers of international payments efficiently, without the need for bank checks. When it comes to large transactions, CHIPS is the main clearing house in the United States. By using electronic bookkeeping entries, it settles, on an average, more than $1 trillion USD every day. An average transaction using CHIPS is over $3,000,000.

Many people prefer CHIPS to the Fedwire service because it’s more affordable, even though it isn’t as fast. Transfers could be made internationally or domestically, but usually of large sums of money.

Introducing FedNow for faster P2P payments

In the U.S., the Federal Reserve believes that the U.S. payment system is in the midst of its own modernization transformation. They have urged US banks to look at what is happening around the world, including evolving consumer payment preferences, and begin to create a real-time ecosystem that has the ubiquity, safety and convenience of legacy payments networks. Last year around this time, the Board of Governors of the Federal Reserve System (Board) issued a notice and request on its determination that the Federal Reserve Banks (Reserve Banks) should develop a new interbank faster payments system named as “FedNow” service.

The Board expects FedNow to be an interbank real-time gross settlement (RTGS) service with integrated clearing functionality that can serve as the infrastructure upon which other parties could build faster payment solutions. FedNow would involve real-time payment-by-payment settlement of interbank obligations through debits and credits to banks’ accounts at the Reserve Banks. The service could be designed to support credit transfer use cases, including P2P payments, bill payments, and low-value B2B payments (the service initially would support payment values up to $25,000). The Reserve Banks’ has put forth the launch date of this new system in the year 2023 or 2024.

Mobile wallets enables us to carry cash in digital formats

Recently, with the advent of Paytm, Google Pay, Phone Pay, Amazon Pay etc, mobile wallets have gained more popularity as it has become a way to carry cash in digital format. It is a virtual wallet service that is available for usage once the application has been downloaded from the app store.

From cab drivers to businessmen, this payment method is used by all as they are easy and convenient. As mobile wallets let consumers recharge their mobile, DTH and data card, pay utility bills, compare and book flight tickets, hotel bookings, shop online, buy movie tickets, avail great offers, and send money to anyone via their contact list on smartphone. Various mobile wallet applications also provide cashback facilities and other discount coupons to consumers.

Internet banking or online banking has long been doing the rounds

Internet banking has been in the business for years and almost all the government as well as private banks provide internet banking facilities to its customers. Internet banking allows us to transfer funds, check account statements or open new accounts online. One can carry out all their banking transactions online by logging in with your username and password. Internet banking is usually used to make online fund transfers via NEFT, RTGS or IMPS and customers can avail all these facilities by logging in their website.

Remote transactions enabled by mobile banking

Mobile banking is also one of the most widely used digital payment methods stirred by higher usage of smartphone and tablet. It is also one of the easiest payment methods enabled by an application, provided by the banks or financial institutions. Nowadays, each and every bank provides its own mobile banking application which is available on all the operating systems like Android, Windows and iOS platforms.

To sum it up, all of the above payment methods were already in place for consumers even before the COVID19 hit. But now as the crisis has changed the industry and market dynamics dramatically, a recent Accenture report identifies how COVID-19 impacted the payments industry influencing payment providers’ present as well as future actions.

COVID-19 impacted the payments industry

The report mentions these points:

  • Payments markets affected badly due to COVID19
  • Consumer spends have drastically slowed down
  • Payment companies to re-think short term priorities
  • Cash transactions have declined significantly
  • Tokenized payments on the rise
  • Conditions are highly favourable for frauds
  • Embedded payment experience will be encouraged
  • Payments experience that offers more control will be accepted by consumers and businesses

Hence, it is inevitable to say that the payments industry especially the payments providers will have to relook and redefine its strategies to come up with cutting-edge tech-focused payments methods. They will have to achieve the goal of digitization of payments which provides an easy, convenient, fast, and secure payments experience to consumers. To attain this, what are some of those digital payment trends that will make it big in the year 2020 and will require payments providers to consider as their offering. We will take a look at each one separately:

Digital payments trends to become trailblazers in 2020

Digital payments trends to become trailblazers in 2020

Biometric authentication will emerge rapidly

Biometric authentication will be a fast moving trend that will rapidly emerge in this year. Biometric authentication is a verification method which involves biological and structural characteristics of a person. Fingerprint scans, facial recognition, heartbeat analysis, vein mapping, and iris recognition are some of the verification methods included in Biometric authentication.

With the rise in the problems of identity theft and fraud, biometric authentication can become a reliable and secure option for all the digital payments to take place going forward. As per Juniper research, mobile biometrics will be used to authenticate $2 trillion worth of in-store and remote payments annually by 2023, driven by the rise of WebAuthn standards adoption.

Biometric authentication is a unique and important digital payments trend as it incorporates and provides accuracy, efficiency, and security under a single package.

EMV technology leads a shift from cards to codes

Earlier, we had bank accounts that were simply recognized by random combinations of unique digits present on card. However, the EMV technology (Europay, Mastercard, Visa) has been picked up gradually and introduced in the US markets with more computerized and secured mechanism for payment.

EMV uses a smart chip instead of a magnetic stripe to hold the data that is required to process a transaction. The technology is known for using codes that vary each time a transaction takes place. A smart chip has the power of a small computer, allowing it to run applications that can perform advanced authentication.

The chip’s processing power, along with its capacity to store more information means that EMV cards can hold encrypted data, perform cryptography, and generate a unique code assigned to each transaction. Hence, it becomes virtually impossible to make a counterfeit EMV card because the chip is tough to tamper or clone with.

Increasing demand for Mobile Point of Sale

Mobile-point-of-sale (mPOS) is a revolutionary technology for all the merchants having their bricks-and-mortar structures and in-store cash payments. The mPOS gives them the freedom to operate in areas where they can find more customers and move remotely with their products or services. Small and medium business owners and retailers can move to various places like concerts, trade shows, events where they can seamlessly accept payments from their customers.

Additionally, the mPOS technology also enables in-store payments more streamlined and flexible by replacing the central checkout areas with sales staff equipped with mPOS devices. It is surely going to be one of the most widely used digital payment technologies as it enables contactless payments and speeds up the checkout process.

Conversational UI to make your payments

Nowadays, home assistants, conversational devices or smart speakers are widely used by customers as it allows users to give voice commands to a speaker and receive a voice response in return. The user can give voice commands for various things such as getting weather updates, traffic updates, ordering from Zomato or booking a cab from Uber.

We are all aware of Amazon Alexa that came in the year 2014, then joined Google Home and Apple followed the race in the year 2016 and 2017 respectively.

The speakers which evolved from the smart assistants were primitive in nature as they were restricted to just phone devices. However, with the growth of home automation, the smart speakers also started to go mainstream. According to Statista, 35% of users use smart speakers for buying essentials like home care, groceries, and clothing.

Smart speaker payments

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Interestingly around 28% of the people used smart speakers for sending money or making direct payments. This is not a huge portion as fewer people choose to make payments over smart speakers due to the security reasons.

However, the future looks promising for smart speaker payments as a Business Insider report suggests that the smart speakers usage will rapidly grow from 18.4 million users in 2017 to a whopping 77.9 million users by 2022.

Banks will move towards AI and machine learning powered payments

Whenever it comes to payments, security is the most crucial element. People will always prefer using a payment method that has a high security. That’s the reason why payment technologies won’t be able to go forward without developing a top-grade security. Banks receive a lot of customer details and payments data each day and to detect all the possible threats within seconds, banks need to empower themselves with AI and ML.

The best example of this is when you receive a text from your bank asking if the transaction was done by you or fraudulent. This cautionary message helps the user and bank to prevent a major mishap. This is an automated message sent by a machine learning software to understand the authenticity of the transaction you took place.

Contactless payments using the NFC technology

Contactless payments are another payment method which will see a high growth trend in the near future. As per its name, contactless payments allow the customers to simply wave their smartphone across any QR code reader. This particular digital payment method of waving has proven to be way faster and convenient than making card payments or cash transactions. Especially now during the COVID19 phase, contactless payments will be the way to go for customers where maintaining hygiene standards and social distancing becomes a norm.

Contactless payments has also proven to be a more secure technology as it transfers the encrypted data to the point-of-sale device instantaneously. Many mobile wallet providers like Paytm, Google Pay, Apple Pay etc have their contactless payment system in their respective applications.

Contactless payments are possible with the NFC (near-field communication) technology. That’s the reason why they are also termed as NFC payments. The benefit of the contactless payments has been realized by retailers globally and the market size for contactless payments is expected to grow from USD 10.3 billion in 2020 to USD 18 billion by 2025, at a CAGR of 11.7%, states a recent report by Business Wire.

Cryptocurrencies and blockchain based digital payments

Apart from the above list, other digital payment methods will also emerge as a result of the vast technological possibilities. For example, digital cryptocurrencies will be viewed as a major trend among Gen Y who are more profound to use new-age technologies. Cryptocurrencies will revolutionize the whole ecosystem of investments and monetary financing due to its instant and borderless nature of transactions. It was in 2019 that JP Morgan Chase, the largest bank in the US announced to create and successfully test a digital coin representing a fiat currency. The JPM Coin is based on blockchain-based technology enabling instant transfer of payments between institutional clients.

Traditional financial institutions and banks need to act swiftly to technological developments

In an industry traditionally served by banks, these new and innovative non-bank payment providers are entering the market and rapidly gaining ground. Technological development could easily accelerate to a tipping point if banks do not act swiftly and decisively, positioning themselves to offer attractive, value added propositions to both individual and corporate customers.

In fact, a significant threat is posed by large technology and social media companies, for example Facebook introducing Libra to make crypto-based payments. If these companies can leverage, even monetise, their considerable customer reach by presenting attractive, straightforward and secure payment propositions alongside their other non-payment offerings, they could succeed in disintermediating banks, particularly in growing segments of the global payments business.

It is also of particular relevance as a young, ‘tech-savvy’ generation starts to take on leadership roles in global commerce. The new generation of leaders, all very familiar with the world of social media and e-commerce, will expect to run their businesses using 21st century tools in the post COVID19 age.

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Customer Experience Enterprise Applications UX/UI

The role of Information Architecture in creating richer user experiences

Aug 25,2020 / By / No Comments

In a world where everything that a user needs is just ‘an app away,’ offering delightful User Experiences can be the differentiator for businesses amongst the myriad of options, that consumers might have. The fact that 88% of people are less inclined to return to a site after a bad UX makes it a key factor for businesses to retain customers. A good UX is not just critical for customer engagement and retention but it also drives business value, according to a study by Forrester, every $1 that’s being invested in UX returns $100.

The saying ‘well begun is half done’ is aptly well-suited in this context of creating unique, intuitive, and engaging user experiences that simplify the user’s journey across the platform, and building Information Architecture (IA) is the first step towards achieving this goal.

An IA is a blueprint that guides your team while designing the UX for any digital platform. It is in fact one of the most valuable and necessary aspects while embarking on the journey of creating digital solutions. It is a collaborative task often shared between the design, development and engineering teams.

In this article, we will learn about information architecture and how it functions as a backbone while crafting user experiences for your products.

What is an information architecture (IA)?

Information architecture can be defined as a method of organizing, structuring, and labeling the content of a website, web or mobile applications.

The ultimate goal of an IA is to establish an easy and logical decision-making process for the end users of designed product.

Elements of IA

Date source – 3 Elements of IA

The art and science of creating Information Architecture

Information architecture has roots in both library science and cognitive psychology.  Let us take a moment to understand these terms individually.

Library science

Libraries have always been associated with the practice of information science. Library science is the study of how to categorize and catalog information resources. The two defining traits of library science are:

  1. Categorizing – defining things by similarity
  1. Cataloging – creating metadata and assigning it to content in order to find it again in the future

Cognitive psychology

Cognitive psychology is the study of how our minds work —  what mental activities take place in our brain and what different factors influence our attention. Majority of the UI/UX design rules we have today have roots in cognitive psychology. Information Architecture uses some elements of cognitive psychology to define the way information should be structured.

Here are a few key elements of cognitive psychology that are most valuable for IA

key elements of cognitive psychology

Data source – Elements of cognitve psychology

Gestalt principles: Gestalt principles explore users’ visual perception of elements in relation to each other. They show how people tend to unify visual elements into groups according to their similarity, continuity, or closure. It focuses on good figure, proximity, similarity, continuation, closure & symmetry.

Mental models: It is the users’ perception about certain things based on their past experiences. For e.g. it could be expecting the user to close a particular website/app window on clicking the button represented by a cross in the box.

Cognitive load: Cognitive load is the amount of information that a person can process at any given moment.

Recognition patterns: People visiting a website or using a mobile app expect to see certain features associated with a specific product. Designers apply various recognition patterns to make the interaction familiar.

Visual Hierarchy: Visual hierarchy is directly related to content readability. One of the essential points to consider for architects is scanning patterns — before reading a page, people scan it to get a sense of interest. The most common scanning patterns are F and Z patterns.

The most common scanning patterns are F and Z patterns

We derive most important components of the information architecture from the understanding of the library science and the cognitive psychology. Let us understand what these components are and how do they help in shaping up the entire information architecture.

Components of information architecture

Components of information architecture

Components of IA

Information architecture is comprised of 4 components –organization system, labeling system, navigation system and search system

Organization systems – Categorization of information, e.g., by subject or chronology.

Labeling systems – Representation of information, e.g., scientific terminology (“Acer”) or lay terminology (“maple”).

Navigation systems – How users browse or move through information, e.g., clicking through a hierarchy.

Search systems – How userssearch for information, e.g., executing a search query against an index.

Types of Navigations in Information architecture

Hierarchical Navigation – Making one choice per screen until the user reaches the destination

Hierarchical Navigation

Flat Navigation – Switching between multiple content categories

Flat Navigation

Content Driven Navigation – Moving freely through the content or the content itself defines the navigation

Content Driven Navigation

Now that we have the fair understanding of the Information Architecture, let us look at how to build one.

How to build an Information Architecture

The structure of an IA is based on the requirements of the project and the iterative nature of the design. It may vary from project to project. IA forms a firm base and supports the various design changes that may be done throughout the progress of the project.

Before defining the information architecture, the first step is to develop a supportive document. Based on the acquired business knowledge and the understanding of the users’ pain points. With these points in mind, adocument consisting of information like company goals, user goals, user personas and competitor analysis, etc. is created.

The process of designing an Information Architecture:

To define the information architecture we will follow a 5 step process.

1. Group the content

In this phase, we sort the content and group it under different umbrellas and define the content set.

In case of a redesign project, revisiting the entire structure and determining which information sets to keep and which ones to get rid of in addition to deciding where new content is required is the first step.

Card sorting is one of the most effective & widely used UX tool for content grouping

Group the content

Data source

2. Create a site map

High Fidelity App Map for an Investment App

High Fidelity App Map for an Investment App

In this phase, the user goals and the purpose of the digital platform is defined. Post which the user journeys with different sets of tasks are created.

The user journeys helps in understanding the movement of the users on the digital platform and the interlinks between the pages.

3. Outline the navigation structure

The navigation structure is created based on the business understanding. Any of the navigation types mentioned earlier in the article can be used as a foundation and the entire structure can be built on it.

Detailed Navigation structure of an e-commerce website

Detailed Navigation structure of an e-commerce website

4. Refine content labels

In this stage, the content is labeled according to its purpose. These labels are linked to create the structured categorisation, consisting of sections, sub-sections, links, toggles etc.

Precise and easy to understand content Labels for the catalog level -2 Section of e-commerce app

5. Create wireframes and conduct usability test (Writing Scenarios)

Wireframes created for an app to test the journey for the proposed IA

Wireframes created for an app to test the journey for the proposed IA

It is good practice to test out the information architecture early-on in the project and make changes as it progresses. Hence in this stage, user scenarios are written. Post which the wireframes are tested with these scenarios.

This process is critical to help understand user pain points and design failures. We can then iterate the design as required.

6. Defining areas for analytics integration. (Plugging in the analytics)

Plugging in the analytics

Example of an app map created for insurance company showing the analytics plugins

Analytics plays an important role in creating user journeys. This phase will help in identifying the focus areas of the users, the functionalities they will use most, and their pain points. This becomes a precursor for plugging in analytics to the digital platform.

Also this data comes in handy for future iterations as it can be used as a guide and changes can be made to the design in order to solve the problems and improve the user  experience. Hence, once the architecture is created, the decision can be made based on the goals of analysis and select tools as per requirements

In conclusion, Information Architecture is an integral part of an experience design process. A well structured IA is a powerful tool that ascertains methodical and easy navigation through a digital platform and ensures a seamless flow for content discovery. The nature, levels, and detailing of the architecture can vary according to the project. However, creating an  IA is a must for every experience designer and it is a critical step before embarking on the design journey.

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Customer Experience Enterprise Applications Fintech UX/UI

Customer Experience in FinTech and FinServ: the opportunity to build loyalty is now

Jun 2,2020 / By / No Comments

Across the age spectrum, more people are opting or are at least open to using financial apps for managing tasks ranging from daily budgeting, stock investments, banking services, payments, or insurance needs. In 2019, consumers accessed financial apps over a trillion times. China, India, Brazil, United States, and South Korea were the Top 5 nations in terms of total sessions in finance apps.

Consumers love finance apps

According to the 2020 Mobile Finance Apps Report by Liftoff and AppAnnie, the install-to-register rate of finance apps is a healthy 46.2% indicating the willingness of users to not just download such apps but engage with them too. The install-to-purchase rate dips to 19% pointing to a lot more work needed to encourage usage. Entrepreneurs and the start-up community are betting big on FinTech, as well. Many of the breakout apps of 2019 were in FinTech from digital banking (e.g. Nubank), payments (Google Pay), and loan disbursement (e.g. KreditBee) to all-in-one super apps like PhonePe.

Traditional banks, long dependent on brick and mortar retail-based banking are trying to keep pace with changing consumer behaviors and digital experiences. Data shows that growth in average MAU from 2018 to 2019 was higher for FinTech apps than for legacy banking apps.

Change is the only constant

Fact is, the mobile app revolution, and how it would affect businesses, was a disruption that many industries did not foresee. Consumer preference and user experience in one domain has had an impact on other domains too. For example, urban mobility apps such as Uber have raised expectations of user experience for all transactional consumer apps. In that context, legacy banks must compete long used to brick & mortar banking are trying keep pace with new-age digital banks and FinTech companies in terms of ease-of-use, design aesthetics and ‘cool quotient’.

According to UserTesting of UK, a company focused on testing as a service, consumers were drawn to FinTechs for 3 major reasons: In-demand products and services, trusted recommendations and ease of use.

Utility bill payments, peer-to-peer lending, bank transfers, and more were made possible by FinTech apps, many of which started as digital wallets or simple payment services. The social buzz and recommendations from friends helped these apps gain traction. Ease of use is another factor that works in their favor.

Traditional banking apps have acquired a reputation, rightly or wrongly of being difficult to use. According to research from US-based finance portal. PAYMNTS, 54.1% of consumers surveyed said they would use their banking apps “much more often” if only they had more control over the authentication requirements of their apps.

Across financial services, especially banks, one can observe these common features:

Across financial services, especially banks, one can observe these common features

The FinTech and FinServe industries have two unique characteristics – the tasks consumers perform can be clubbed as ‘routine’ and ‘risky’. Product owners need to address these through a mix of technology and human instinct. In other words, Artificial Intelligence for the routine and Emotional Intelligence for the risky. Banks are already using AI technologies to automate routine banking tasks such as resetting passwords, checking account balances, transferring funds between accounts or paying monthly bills.

According to a Bain & Co report, consumers prefer digital channels, but they give higher Net Promoter Scores to companies that allow customers to speak with a representative to resolve a problem. Emotional intelligence has a role to play especially in providing a personal service experience during a stressful situation.

The post COVID world and financial services

Shifts in consumer behavior during uncertain times, such as the current global pandemic, accelerates the need for digital even more.  According to a recent report “Credit Union Innovation Playbook” by PYMNTS, “the COVID-19 pandemic has led to a remarkable shift in the ways consumers want to bank — away from brick-and-mortar branches — making it much more crucial to improve digital banking services”.

It is not all black and white when it comes to consumer behavior towards financial services. The one factor which legacy brands enjoy, at least among the older consumers, is familiarity and trust. Longevity and the comfort factor of seeing physical branches dotted across the city subliminally can create positive brand equity – a feeling of ‘having been around’. In contrast, new-age digital banks may have to work harder to earn the trust of consumers. 51.1% of credit union members in the US cite “trust” and “risk of fraud” as the biggest barriers to trying new-age banks. According to EY, ‘responsible banking’ is more important than ever as consumers indicate their ‘future purchasing decisions will be impacted by banks actively supporting the community, being transparent in all they do, and ensuring they are doing good for society’. What does all this have to do with customer experience? The short answer is:  everything. Here are the reasons why:

The business success of financial services and FinTech brands will increasingly depend on how they master the digital experience. Genuine, meaningful product differentiation is difficult in the highly regulated banking and finance industry. Enterprises are faced with two challenges:  How to drive customer engagement with limited differentiation at the product level while increasing volume and velocity in customer acquisition? The answer is crafting a superior customer experience across all digital channels.

Retention is the new growth. Enterprises know that new customer acquisition comes at a high price. However, retaining and growing the lifetime value of an existing customer (active or inactive) is usually a cheaper way to increase revenue. Design Thinking methodologies come into play here. Implementing strategies to encourage loyalty (and therefore retention) can often be a more successful strategy than chasing new audiences. Citibank’s research found that 83% of consumers (that number goes up to 94% among Millennials) are more likely to participate in a loyalty program if they can access the program easily from their mobile phone.

Now more than ever before, Empathy is the key. It is said that all our decisions in life are driven by the emotional brain, rather than the rational one. One would imagine it is even more so in the current times. At Robosoft we strive to understand the emotional triggers that act as barriers or motivators for actions when interacting with a digital product. When working on a FinTech product even a simple task of paying bills can evoke a diverse set of emotions.

Now more than ever before, Empathy is the key

When working on a peer-to-peer lending product for the US market, we created an emotional map of a user which looked like this:

Emotional map

In a world that is increasingly adopting remote working, marketers may not be able to get a first-hand feeling of consumer motivations or behavior. In this context, getting the customer experience right throughout the consumer buying journey is a critical building block for brand loyalty. The key is in approaching product creation from the POV of building long-lasting customer relationships rather than regular transactions.

Human instinct and customer experience

The advertising legend Bill Bernbach once famously said in the context of marketing communications that ‘It took millions of years for man’s instincts to develop. It will take millions more for them to even vary. It is fashionable to talk about the changing man. A communicator must be concerned with unchanging man, with his obsessive drive to survive, to be admired, to succeed, to love, to take care of his own.” One can extrapolate this observation to digital experiences too as product owners should remember that basic human instincts will remain unchanged and are common across domains.

In the context of customer experience which can drive brand loyalty there are common principles applicable across categories – be it FinTech, OTT streaming services or food delivery apps. Some of the principles applicable to Financial Service are:

Focus on users over products: at a recent webinar, famous author Seth Godin spoke about enterprises designing more for their benefit than that of the users. As an example, he mentioned how easy it is to remember secure 6-digit numerical passcodes for apps. But when an enterprise introduced a seven-digit numerical passcode citing seemingly extra security they have not considered the friction it is likely to cause. It is an example of doing what matters to the enterprise first rather than the user.

Image source

Design Thinking workshops and user research tools help gain insights into consumer needs. Remember, users may never be able to explicitly convey or may not even know what they need. It takes expertise to interpret their pain points and derive meaningful insights that can be put into action.

Think experience, then features: it is always tempting for product owners to pack in all the features that they think are ‘nice to have’ or likely give a competitive edge. But what is sacrificed is simplicity which could lead to a sub-optimal product experience. At Robosoft, our strategy & design teams work closely with product owners in enterprises to prioritize features that are important to the user at every stage of the product roadmap. We must also remember that we can’t have it all – we have to lose some to gain some. In a banking product, a balance needs to be sought between convenience and security.

Think experience, then features

Create an emotional connection: just as some movies, books, and songs evoke an emotional response in us, digital experiences have a potential too, in their own way. It doesn’t mean that using a bank’s mobile app should move one to tears (may happen if it is out of frustration!) just as some movies impact us emotionally. It is about creating a subtle feeling of accomplishment, productivity, safety or whatever is the relevant parameter for that category and product.

Key emotions that a Financial app should address:

Key emotions that a Financial app should address

Copywriting for UX is also an aspect which product owners need to pay attention.

‘UX copywriting, or user-experience copywriting, is the act of writing and structuring copy that moves digital users, like visitors and customers, toward accomplishing a goal in an intuitive way.’

There is both science and an art to copywriting which helps accomplish tasks better. Tone of voice and brand personality can also be reflected in the copy. The language used in say, a small-loan lending platform will vary from that of a high-end wealth management app.

Provide clear and precise directions: unlike say a trivia game where confusing instructions could lead to minor irritations and friction, financial services deal with a lot more ‘serious subject of money. Confusing navigation or language can lead to errors that can cost money to the user and erode trust in the brand.

Provide clear and precise directions

Use analytics regularly to give users what they want: baking analytics into the product at the very beginning ensures that the right metrics are tracked for continuous product improvement and personalization.

Use analytics regularly to give users what they want

Integrate technologies seamlessly: both consumer-facing experiences and backend processes can be made better by emerging technologies. Blockchain, robo-advisors, process automation, voice, and chatbots have roles to play in improving customer experience. In the post COVID world, video banking may see a surge as well as the need to invest in

Provide an intuitive & interactive experience: According to Interaction Design, ‘a user is able to understand and use a design immediately—that is, without consciously thinking about how to do it—we describe the design as “intuitive.” In the context of FinTech or FinServ apps the process could start right from the login method, conveying a sense of safety & privacy, using AI to monitor and predict transactions and more.

Be inclusive: user experience which works for all must be the mantra when crafting digital experiences. Websites and mobile apps that understand the needs of visually or hearing impaired and other eventualities must be considered. Uber’s consumer app, for example, notifies the commuter of any special needs the driver might have. Some food delivery brands think not only of the consumer but of the delivery executive too by urging the user to consider a tip. Food delivery apps like Zomato also highlight the profile of the delivery executive, giving a brief summary of his or her aspirations thus making the experience more humane and inclusive.

In sum, the unchanging human instincts we spoke about earlier, the‘obsessive drive to survive, to be admired, to succeed, to love, to take care of our own’ has come to the fore more than ever. The recent global pandemic has added new dimensions to customer experience in financial services. It is a great opportunity for enterprises to build a competitive business edge through great customer experience.

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