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Fintech UX: The key competitive advantage for fintech companies

Around the world, fast-moving fintechs are offering innovative banking solutions driven by apps. But with so many competitors offering similar services, how do you stand out? Great user experience (UX) design can give you the competitive edge you need.

Getting an edge is more important than ever in fintech

The fintech scene has exploded in recent years, and by some estimates, there are over 26,000 fintech startups worldwide. Among them are digital-first challenger banks, taking on traditional banks that are typically slower to innovate. However, even the big banks are catching up by offering sophisticated mobile apps and a wider range of digital banking services.

Consumers are now taking advantage of the convenience these services provide. Automated savings and investments, real-time spending notifications and AI-driven banking advice are quickly becoming the norm.

So when 80% of banks now offer similar functionalities, how can you stand out? The solution is to create a UX that’s more helpful, intuitive and enjoyable than the rest.

In this blog, we’ll take a deeper look at the current trends in UX and how you can take advantage of them.

Key takeaways

  • Exceptional fintech UX is about understanding user needs and crafting solutions around them

  • The right UX decisions can also help you integrate new features to improve security or integrate with a wider technology ecosystem

  • To optimize your app’s UX, you need up-to-date insights on user preferences and experiences.

Let’s get started!

The evolution of fintech and UX

Technology has changed the face of banking in the last few years. In the pre-internet era, standing in long lines to withdraw money or speak to a banking advisor was the norm.

But with the growth of e-commerce, fast internet connections and smartphones, user expectations have changed. Consumers began to trust the internet for making purchases and dealing with money.

With these changes, banks saw an opportunity to offer faster, more convenient banking experiences. They began creating online banking portals and secure smartphone apps–marking the birth of mobile banking.

A new era of speed and convenience

Consumer expectations have evolved rapidly with businesses in all sectors digitizing their offerings. Modern consumers–especially the younger generations–want fast, convenient services that they can access anytime, anywhere.

Accordingly, banks also started letting other businesses access their application programming interfaces (APIs). Banks kickstarted a whole new ecosystem of finance apps and services by allowing external organizations limited access to their banking data.

Modern consumers are now accustomed to managing their daily finances primarily through banking apps. Chase reports that 59% of consumers utilize their banking apps for bill payments. Not surprisingly, the younger generations are pushing this trend forward, with 95% of Gen Z and 91% of millennials embracing mobile banking.

All this means that the banking experience is no longer defined by friendly bank managers, helpful staff and an attractive bank interior. Today, the banking experience is defined by the digital journeys and experiences you create.

The power of exceptional fintech UX

Exceptional UX in fintech is about understanding user needs and crafting solutions around them. It means giving users easier ways to perform financial transactions and to get the insights they need to make better financial decisions.

In effect, it’s empowering consumers to have better control over their finances.

For example:

  • Giving consumers the ability to transfer money anywhere in seconds for little or no cost

  • Automating bank transfers so consumers can save or invest a portion of their income without logging in to their account

  • Showing notifications when a customer goes over their daily spending budget

Delivering seamless banking experiences like these helps even the most time-stretched and forgetful banking customer stay on top of their finances. And by incorporating stellar user interface (UI) design, fintechs can reinforce their brand and create a professional, welcoming feel.

Providing exceptional UX helps fintech companies grow

There’s a reason banks and fintech startups around the world are heavily investing in digital experiences. Today’s consumers are no longer tied to traditional banks and will use the provider that gives them the best service–especially if that provider makes it easy to switch.

Accordingly, great UI/UX is helping fintechs improve key growth metrics like customer acquisition and retention.

For example:

  • UK challenger bank Monzo was one of the country’s first fintechs to offer an app-driven banking experience. By promoting its app’s reporting capabilities, Monzo was able to reduce acquisition costs by 50%.

  • Tax management startup Finmo hired a UX design agency to improve its app’s UX. By simplifying the app’s structure and using familiar aesthetics to generate trust, Finmo reduced customer drop-offs by 40%.

As always in business, what’s good for the customer is good for the provider. Banking customers love great UX, and the startups who provide it are rewarded with growth.

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This reporting feature in the Monzo app helped the challenger bank acquire millions of customers in the UK.

6 components of a winning fintech UX strategy

Working on your own fintech app? The following strategy components will help you at every stage of development, from initial UX research through post-launch optimization.

1. User-centric design

UX design expert Jesse James Garret explains this vital aspect of UX:

“User-centered design means understanding what your users need, how they think and how they behave–and incorporating that understanding into every aspect of your process.”

Every idea you have should be validated by market and UX research, ensuring your product fits seamlessly into your target audience’s finance journeys.

In fintech, this could mean:

  • Integrating your app with other digital services that your audience uses

  • Restructuring your app to center the features users access most

  • Understanding your audience’s primary reason for choosing your app (e.g, investment goals) and building more features around that

2. Seamless onboarding

In any app, the onboarding process sets the tone for the customer’s experience. It’s particularly important in fintech, where 68% of users drop apps during setup, and 30% find the application process complicated.

Crypto trading app Binance is a great example of smooth onboarding for new customers. The company lets new users experience their platform, survey the markets and access currency updates before asking them for identity documentation.

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This ensures that new users experience the app's value before waiting to verify their identity. By actively understanding and simplifying the user's initial steps, Fintechs can drastically cut drop-offs and encourage enduring loyalty.

3. Intuitive navigation

Finance apps are often complex, giving users multiple features for managing finances, keeping records and accessing documentation.

But users quickly get frustrated when they can’t find their way around online. In one survey, 94% of respondents said that navigation is the most important website feature.

It's clear that many companies understand the importance of notification–and when it comes to finance issues, Apple is a great example. The Apple iPhone allows users to make card payments simply by bringing their phone near to a payment terminal or by double-tapping the phone’s side button.

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After making a payment, Apple users can navigate to the card transaction screen with just three taps.

While Apple isn’t a fintech specialist, the company sets the gold standard for UX. Fintech apps can follow this example by putting their most useful features in easy reach and making navigation intuitive for users.

4. Consistency across channels

The user’s experience doesn’t start or end with your mobile banking app–it’s the sum of their entire journey across all your channels.

On a basic level, this means your mobile app and desktop app should be broadly similar and connected in real time. Users should be able to seamlessly switch from one to the other to complete tasks.

Going deeper, it means delivering consistent branding, messaging and service delivery across every touchpoint, from your social media ads to the emails you send customers.

With 70% of consumers considering consistent cross-channel experiences to be very important when choosing their primary bank, this aspect of UX is now essential.

5. Personalized customer experience

According to a research report, 72% of customers rate personalization as highly important in financial services. Fintechs and banks are adapting by using technology to offer hyper-personalized experiences through their app’s UX.

For instance, the Mint app offers users personalized insights about their spending, helping them evaluate their habits and make better decisions.

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Budgeting app Cleo is taking the idea further, using AI technology to give users personalized responses to finance queries. Customers can ask questions like “How can I save $300 this month?” and Cleo’s chatbot will generate personalized advice in the style of a friend:

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Fintechs who embrace personalization will stand head and shoulders above those who simply show customers their bank balances.

6. Data security

Consumers are aware of cybercrime threats, and 46% of mobile banking app users are concerned about their accounts getting hacked. Fintech organizations need to step up their security game to win and keep users’ trust.

Many banking apps now smoothly integrate multi-factor authentication, offering users an added layer of protection. Quick biometric checks, such as fingerprint scans or facial recognition, can fortify accounts without slowing users down.

Above, Revolut notifies users when there is any sign of a security risk helping to reinforce the trust users have in the app.

How UX elevates a competitive advantage for fintechs

Thousands of fintech apps are available today, and many offer similar features and services. Exceptional UI/UX is a key differentiator that offers a number of additional benefits.

Build trust

Users need to feel that their financial data and assets are secure. Fintech providers can build trust in several ways, for example:

  • Providing extra security options like multi-factor authentication

  • Including trust signals, such as security alerts and transfer updates

  • Minimizing errors or app performance issues that might reduce the user’s trust in the app’s design

Differentiate from competitors

Fintech companies need to offer experiences that others don’t–and to keep innovating as their competitors inevitably copy their ideas.

Digital bank N26 has famously used innovative banking ideas to make a splash in the fintech scene. The bank’s app offers a range of smart services, such as:

  • Allowing users to have multiple IBAN numbers to facilitate international payments

  • Enabling users to create “shared spaces” so that friends or families can pool their funds and save together

  • Letting users send instant payments with their app via N26’s integration with the Bizum service

These services and more are instantly available through the bank’s app and have helped N26 gain recognition in the press.

Enhance customer loyalty

In the mobile banking age, switching banks is easier than ever. Many digital banks allow customers to download an app and create accounts in minutes–so banks must work harder than ever to keep customers.

Great UX processes can help achieve this in numerous ways, for example:

  • Creating tools that show users their results from using the app (for example, progress towards a savings goal)

  • Responding to voice of customer data and improving the app in line with user feedback

  • Using gamification–the act of building game-like experiences into the app–to incentivize good banking habits in users

For instance, Spanish bank BBVA launched a game platform to promote their services. When users complete everyday banking activities, like paying bills or adding funds to their accounts, they receive points that they can exchange for prizes.

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Fintech UX design challenges

User experience challenges for fintechs can be complex. While fintechs want to create the best possible experience for users, they must also balance usability with security.

Let’s look at the major key challenges that fintechs face when designing user experiences.

Regulatory compliance

Fintech companies are obliged to design their apps and digital services with strict regulatory frameworks in mind. For instance, banks must follow anti-money laundering (AML) and now Your Customer (KYC) procedures that involve verifying the user’s identity.

These processes often require users to scan physical documents and wait several days for their account to be verified. This is the antithesis of the instant, fully digital service that startups want to provide.

Fintechs must also ensure that disclosures, terms of use and compliance-related actions are integrated smoothly into the user journey.

Meeting high customer expectations

Most consumers today are accustomed to using apps and digital services in their day-to-day lives. Businesses of all kinds are continuously raising the bar for digital experiences, creating apps and websites that are intuitive, fun and connected to other ecosystems.

Fintechs will need to conduct market and UX research to understand what their customers expect from their service. Gathering voice of the customer (VoC) data can also help them assess which features customers are satisfied and dissatisfied with.

Product complexity and consistency across channels

Fintech products often encompass a range of services, from loans and savings to mortgages and more. The challenge lies in presenting these multifaceted offerings in a user-friendly manner.

What’s more, fintechs must ensure these services work smoothly and consistently across all their channels, including web, mobile, chat, telephone and beyond. If a user starts applying for a loan on their mobile, they should be able to finish the application on their desktop.

Creating and maintaining these seamlessly connected ecosystems can be a challenge for fintech companies, especially in their early stages when budgets are tight.

Data privacy

Naturally, any fintech offering digital services is sitting on a mountain of personal data. Fintechs are therefore under pressure to comply with data privacy regulations, such as GDPR in the EU and PIPEDA in Canada.

Complying with these regulations can be costly and greatly limit the amount of external partners and services that the fintech can use. What’s more, even countries outside of the EU may have to be GDPR-compliant if they have European customers.

Security vs. convenience

Taking strong security measures while providing a convenient user experience is a constant challenge in fintech. On one hand, any security breach would be a disaster–both for the customer and the fintech itself. On the other hand, increasing security measures to deliver robust authentication can add significant friction to the user experience.

Some fintechs get around this problem by offering two-factor authentication as an optional feature. Others simply work to optimize their security features so that users can navigate them quickly and easily. In both cases, the company will need to invest in UX design to overcome this challenge.

Top fintech UX examples

Here are three examples of fintech companies that have effectively designed their UX to meet user needs and stand out in a competitive market.

1. Acorns

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Acorns is a micro-investing app that stands out in fintech for its user-centric approach.

The app's primary function is to round up users' everyday purchases to the nearest dollar and invest the spare change. Acorns isn’t the only app to offer this service, but it offers some unique experiences that set it apart.

One notable feature is the "Potential" projection tool. It visually represents how small contributions can grow over time, giving users a tangible sense of their financial future.

This aligns with the app's mission: to make investing accessible for everyone, regardless of financial knowledge.

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On top of this, Acorns has a beautifully intuitive interface. The app's dashboard provides a clear view of investment growth, recent transactions and potential earnings.

The design avoids overwhelming users with financial jargon, instead opting for straightforward language and visuals.

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Acorns exemplifies how a fintech company can leverage UX design to untangle the world of finance. By focusing on clarity and user education, Acorns ensures that even those new to investing can confidently explore the app.

2. Robinhood

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Robinhood is a fintech that offers commission-free stock trading and investment through its smartphone app.

The company’s design ethos revolves around simplicity, and its app is as intuitive as popular apps like Uber or Instagram. This approach demystifies the often complex world of stock trading, making it accessible to many–there’s a reason Robinhood is often dubbed the "Facebook of stock trading."

The experience begins in the app’s streamlined onboarding phase. Users are greeted by relaxed UX copy that guides them through a step-by-step process, ensuring the app is never intimidating.

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Once users are set up, the app introduces unique features that set RobinHood apart. For instance, when users view an individual stock, the app shows an animated stock graph with a price that changes in real time.

These features reinforce the fact that the stock price is changing second by second, ramping up the excitement of investing.

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The app also includes elements of gamification, giving users a mental reward for their actions. For instance, the app encourages users to set investment goals and then congratulates them for reaching them.

With this combination of ease, excitement and reward, Robinhood is a UX masterpiece. It should be no surprise that the company had almost 23 million users as of 2022.

3. Mint

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Mint is a money planner and budget tracker that lets users combine all their finance accounts into a single platform.

Naturally, connecting multiple accounts together could be complex and time-consuming. But Mint guides the user through the process step-by-step while gently reminding them of the app’s simplicity and security along the way.

Mint also uses animations to keep users engaged while it connects to their accounts. Waiting is never fun, but these animations reassure the user that progress is happening while also reinforcing that the app keeps their data safe.

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All of these small details combine to create a user experience that keeps the user moving forward while giving them confidence in Mint’s service..

10 future trends that will shape fintech UX

Fintech is changing almost by the day. As new technologies emerge and become increasingly sophisticated, fintech companies must consider whether new trends can benefit their offerings.

1. AI-powered chatbots

Chatbots, driven by AI, are becoming integral to customer support in fintech. In many cases, they are used as a first point of contact to direct users to help resources or a human support agent. In other cases, AI chatbots can handle a customer’s inquiry from end to end without the customer knowing they are speaking to a machine.

With chatbots easing the workload in this way, fintechs can more easily offer 24/7 support to customers. What’s more, today’s chatbots can offer personalized interactions and deliver support in multiple languages. As the digital banking landscape evolves, chatbots will undeniably play a central role in fintech UX design.

2. Biometric authentication

With security being a major concern for fintechs and their users, biometric authentication is becoming widespread. The technology allows users to log into an app in various ways –via facial recognition, fingerprint scanning or iris scanning.

This offers major advantages both in terms of security and convenience. Not only is biometric authentication faster and easier than typing in a code, but it’s essentially impossible for a hacker to bypass.

3. Omnichannel consistency

As UX continues to be an important differentiator, fintechs will invest in creating a consistent experience across their channels.

Banks must connect all their touchpoints, from physical branches to online assets, with real-time data sharing. Any customer should be able to switch between these channels when completing a task without experiencing extra friction.

In order to provide this experience, banks will need to carefully aggregate data behind the scenes and link it to comprehensive customer profiles.

4. Hyper-personalization

By analyzing vast amounts of data, fintech platforms can offer solutions that align with each user's financial behavior, needs, and aspirations. For instance, AI algorithms will analyze transaction history and spending patterns to offer personalized spending advice to users.

These technologies will also enable banks to better evaluate applications and more accurately assess risk in potential customers. This may increase the inclusivity of fintech services, as banks will be able to offer loans to customers who would normally be turned down.

5. Voice and conversational interfaces

Voice assistants and conversational AI are revolutionizing fintech by allowing users to control their apps through natural language commands. This trend is advancing because voice recognition technology can now flawlessly confirm users’ identities by hearing their voices.

With users increasingly accessing their finances through smartphones, voice technology will add a new level of convenience to their experiences. In the near future, users will be able to check their balance or transfer money simply by speaking.

6. Augmented reality (AR) and virtual reality (VR)

And AR and VR technologies are gaining traction in the financial sector as they provide new possibilities for enhancing the user experience.

In the near future, AR and VR may be used to visualize key finance data like portfolio performance and financial planning tables. Users may also be able to engage with virtual representations, such as 3D graphs, to understand budgeting techniques or investment strategies.

VR could also create a simulated meeting environment or help fintechs deliver immersive consultations online. This approach could broaden the reach of financial services, offering a more personalized experience, even across borders.

7. Regulatory-compliant UX

Evolving regulations make compliance a challenge for fintechs. However, technology is enabling companies to adapt and offer fast, convenient experiences while meeting data privacy and security standards.

As fintech's influence grows, there is the potential for a global initiative that will create consistent regulatory standards. If the world’s financial governing bodies are able to align, it will pave the way for a harmonized UX design approach that makes it easier for fintechs to appeal to international audiences.

8. Emotion-driven UX

As finance becomes more personalized, fintechs will increasingly focus on understanding and addressing the emotional aspects of financial decisions.

For example, UX may evolve to provide support and guidance during major life events and uncertainties. This could include displaying calming visuals and colors when a user is making a (potentially stressful) major transaction, such as putting a downpayment on a home. Or if the user is saving for a wedding dress, the app may adapt to show visuals that are more encouraging and exciting.

In essence, fintech platforms of the future could cater to users' emotional well-being, ensuring they feel understood and empowered in their financial development.

9. Real-time financial insights

In recent years, we’ve seen a trend towards real-time notifications. Banking apps now give users instant notifications when funds leave their accounts or when they receive a payment request that requires approval.

As fintech evolves, real-time AI integration will become even more involved in enhancing user experiences. Users will gain insights into their financial transactions, spending habits and investment performance faster than ever before.

For instance, fintech platforms will likely create more sophisticated and personalized budgeting advice, advising users of price rises as they occur. Investment tools will likely offer a greater range of real-time notifications, helping users make smarter buying and selling decisions.

10. Minimalist design

Minimalism is already well-established as a key component of fintech UX. It helps ensure users easily find their way around apps so they can quickly complete tasks without confusion or frustration.

As life becomes ever more digital, users will likely access a greater range of tools and services. Maintaining the minimalist approach will keep users confident and calm while managing their online finances.

It pays to know what your fintech customers really want

Understanding user needs in fintech is the foundation for growth. And with features like session replay, voice of customer and performance monitoring, Glassbox lets you learn where your UX needs improvement. Discover Glassbox today.