Financial Technology, commonly referred to as FinTech, offers some of the most complex problem-solving challenges to User Experience practitioners. They require a thorough understanding of business and technology processes, as well as complex financial transactions, such as trading. Much like any other software development project, FinTech projects require a great deal of analysis and testing with users.
For those new to the term FinTech, the term describes technology and business processes involved in executing financial transactions. An effective FinTech digital platform offers its users a lean and robust way to conduct financial operations. The host of these is broad, ranging from online bill-paying to equities trading, rebalancing and others. The spectrum of FinTech users ranges from power users, such as traders to regular users, such as bank consumers.
This discussion seeks to establish and define some of the main principles of effective FinTech UX as well as the challenges and the opportunities facing FinTech UX practitioners today.
The “Fin” in FinTech
Financial transactions require efficient, reliable and powerful technologies. The nature and the complexity of many of the financial operations demand speed, precision and the power of technologies supporting them. The increasing complexity of financial transactions drives the innovation in the hardware and software FinTech realm.
The financial landscape is continuously evolving and changing. Some changes are driven by new technologies, while others are influenced by new approaches to investing and regulatory factors. These changes often require new investment models and improved financial strategies. Emerging new philosophies and approaches also play a key role in this continuous transformation, including in the areas of wealth management and financial advice.
One of the investment philosophies which has gained a strong footing in the financial world is the theory of behavioral finance. The original term goes back to the late 1970’s and the work of Daniel Kahneman and Amos Tversky. Their seminal research, Prospect Theory: A Study of Decision Making Under Risk, effectively explores fundamental factors of behavioral finance, specifically the influence of human psychology and human behavior on investment strategies. It seeks to explain the interrelationships between the psychological elements of investing and how those affect investors, both seasoned financial professional and novice. It explores the psychological influences as the causes of market fluctuations, changes in investment trends and others. It highlights the importance and influence of emotions and human behaviors as they shape investment approaches.
Another investment philosophy which has gained considerable attention as of late is known as the Impact Investing. Impact Investing uses the ESG scoring system, which assigns the Environmental (E), Social (S) and Governance (G) score to individual holdings. This allows investors to create a highly customized investment portfolio, in line with their social and, to some extent, political views and opinions.
FinTech UX practitioners must bring forth a solid understanding of the principles of Finance, specifically in the areas of wealth management and investment. They must continuously observe and analyze the evolving financial landscape to better inform the users through thoughtful interactions, appropriate interface solutions and other components of FinTech User Experience. User journeys need to be created and extensively analyzed to solve for the incredible complexity of the many Financial Technology processes.
Continuing education, which may include online courses, seminars and conferences is also of great importance. FinTech Design Summit 2019, held recently in New York City, became the first conference of its kind, bringing together UX practitioners to discuss the FinTech Product Design, UX, and Strategy.
The “Tech” in FinTech
Technology has always played a key role in the financial and the investment realm. Stock ticker, one of the earliest true FinTech examples, dates back to the end of the nineteenth century. It transmitted stock price information over telegraph lines. Its alphabetical system of stock symbols designations is very much in use today. As history would have it, the technology of the 1960’s has replaced the stock ticker with computers.
The present-day FinTech includes a broad array of technologies and applications which support financial processes and transactions. These include a complex scope of hardware technologies, many of which are largely invisible to users, such as data centers with built in redundancies, dedicated telecommunications conduits, cloud solutions and many more. FinTech software applications and platforms enable users to execute financial transactions in milliseconds with speed and precision.
An effective FinTech platform seeks to address the inherent complexity of financial transactions and to efficiently streamline the processes. These may include a mortgage application, a credit line increase, an equity trade, or any other financial transaction. Making these processes easier for the consumers greatly enhances their user experience. As I describe in my article Product Development — a Creative Process, a positive and delightful experience with a financial product is a fundamental stepping stone to establishing consumers’ brand loyalty.
FinTech UX practitioners must have a sound conceptual understanding of the various applicable technologies, along with their capabilities and limitations. Collaborating with a larger Product Development team, including Technology, they are able to learn and appreciate the many technological considerations involved in crafting the most appropriate and effective user experience.
As mentioned earlier in this discussion, FinTech is a constantly evolving realm. New and emerging technologies will require FinTech UX practitioners to continuously hone and elevate their skillset. The FinTech world of today offers delightful technological and user experience challenges, which include Artificial Intelligence, Blockchain and Conversational Interfaces, among others.
The next decade will bring forward some of the most advanced FinTech challenges to date, which will require appropriate effective UX methods and solutions. FinTech User Experience will see a dramatic shift to solutions requiring thorough understanding of human psychology and behavior, going way beyond the traditional personas. Emerging technologies and applications will create new UX solutions, not yet seen in the modern FinTech environment. The learning scope for FinTech UX practitioners, both seasoned and novice, is equally immense and fascinating.