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Is it true that traditional banks are engaged in self-deception?

We are constantly discuss that financial design should be clear, simple and helpful in solving user issues. Traditional banks agree, but they wonder why we have to constantly repeat what appears to be so obvious. Actually, this reaction puzzles me, because, in reality, I rarely see a user-centered design in modern banking services.

I recently got a good example of why this understanding is not enough. I am referring to a popular bank whose services I enjoy and use. This bank has billions in assets and eight-digit profits. Their online banking solution is actively used by approximately one million customers. In my opinion, they have the most extensive and advanced customer service solutions with very professional staff. Moreover, the bank always declares its customer-centered position.

So, this bank officially announced and released an update to its online solution. The prior update was made in the previous decade. Imagine how surprised I was to see only minor visual redesign buttons and UI style. Of course, new icons and a flat design modernized the look, but the online service remained the same as it was 10 years ago. There is no enjoyment in using such outdated online services. Quick interviews with friends and acquaintances confirmed my suspicions — that all UX service problems were not fixed. A lot of people didn’t even notice any changes.

Unfortunately, there have been no fundamental improvements in the user experience of this redesign. Navigation is still difficult to understand and consists of 90 sections, so why doesn’t the bank take this opportunity to radically improve its user experience? Even the most superficial analysis of popular solutions and advanced capabilities in the financial industry should show the bank’s management what needs to be done. The architecture and functionality of this decision no longer meets the technical and resource level of large, innovative and customer-centered banks.

Sure, we can justify this by bank management’s conscious reluctance to take risks and invest in a radical architecture update. And there is also a fear that their customers will not accept the interface changes.

Another explanation is that the internal team can’t think outside of the box. They are not ready to take responsibility for required innovative solutions. Or even worse, they underestimate the importance of online channels in the digital era.Indeed, I don’t believe that bank management is not able to adequately assess how such a formal approach will affect the performance of the bank, particularly considering the number of tech-savvy customers and their growing demand for online and mobile banking.

I believe they are well aware of the possible dire consequences: market share loss in the near future; reduction in the bank’s long-term benefits to competitors and FinTech companies; customers’ dissatisfaction with the service and decrease in loyalty; and, finally, resulting loss of profits.

However, we see a formal approach that doesn’t improve the service usability for millions of users. And it seems there is no rational explanation for this. Apparently the bank’s management is sure that everything is done 100% correctly. This means that the worst happens — a business engaged in self-deception. They have lost connection with their customers, and do not hear them. Roughly speaking, bankers don rose-colored glasses and convince themselves that everything is fine.

The problem is that this case is not the only one. We see numerous banks trying to maintain their standing in the market and move into the digital world using formal declarations and minor redesigns, ones that don’t change the fundamentals of the service and don’t improve the user experience. It is important to understand how to help those financial institutions remove the rose-colored glasses and stop ignoring the need for a user-centered approach.

Perhaps the reason for self-deception is a strong market position and inert in-house bureaucracy. Such conditions do not allow them to see the difference between the traditional banking approach and user-centered design that drastically improves the user experience. For example, FinTech companies not burdened with such “comfort” provide fantastic services and became an example to follow for the entire banking industry.

This story raises two very difficult issues: Do traditional financial institutions fully realize the gap between their usual approach and user-centered FinTech services? And, most importantly, will banks be able to overcome it?

I really hope that we will not witness this self-deception of banking turning into a catastrophic fall — a fall similar to that of Nokia, whose CEO said, with tears in his eyes, “we didn’t do anything wrong, but, somehow, we lost.”

Check out my blog about financial and banking UX design >>


Comments: (9)

Alex Kreger
Alex Kreger - UXDA - Riga 29 August, 2016, 15:03Be the first to give this comment the thumbs up 0 likes

What is your opinion about why it's happens? Or maybe it's not? Please share your thoughts in comments...

Stanley Epstein
Stanley Epstein - Citadel Advantage Group - Modiin 29 August, 2016, 16:082 likes 2 likes

The self-deception in traditional banks (by that I assume that you mean that these banks are also very large) that you so vividly describe is more a result of too many competing entities within a banks infrastructure than a policy of willful blindness or just simple neglect. The end result is the same though.

From my own experience some years ago, the product “owners” or business units, who were driven solely by the profit maximization imperative, wanted the very latest technology but had no idea of (and were not really interested in) the critical issues like the technology, the possibilities, the potential barriers and even what the customers really wanted.

To add insult to injury there was a huge overlap between the smaller corporate market and the larger SMEs who were serviced by two distinct business units who were more in competition with each other than with the rest of the industry. The internal technology unit, who was responsible for development and delivery, were more often than not overruled by the mythical pot of profits (gold) perceived to be at the end of the corporate rainbow.    

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 29 August, 2016, 19:042 likes 2 likes

Despite all the UX issues in banking systems,

  1. Financial services remains the most profitable sector in FORTUNE 500 (
  2. 3 out of 5 most profitable US companies are in Financials sector (
  3. Despite GFC, Legacy & Fintech, 7 out of 10 most profitable companies in the world are in financial services. (
  4. Closer to myself, I recently complained to my Relationship Manager that systems of his bank - a Top 3 private sector bank in India - have one of the worst UX of any bank. He turned around and told me that his bank has a higher market cap than global giants like Deutsche Bank, Barclays Bank, etc.

All this makes me question the role of UX in banking. Nokia was felled by an Apple. There's no Apple-equivalent for traditional banks in the horizon. 

Alex Kreger
Alex Kreger - UXDA - Riga 29 August, 2016, 19:531 like 1 like

This is a great and really interesting comment Stanley. Thank you! This explains a lot. The question is how banks can manage this in-house competition to make it more productive and benefit from it? What changes must happen in bank culture to switch on customer-centered approach in long term?

Alex Kreger
Alex Kreger - UXDA - Riga 29 August, 2016, 19:55Be the first to give this comment the thumbs up 0 likes

Thank you Ketharaman for entering this discussion. Yes, of course, banks have largest resources and power. And that makes them extremely inert. They believe that they are unsinkable because of their age, size and market share. Something similar will probably feel the captain of the Titanic. Why does Nokia did not notice the threat posed by Apple? Why Nokia was not so effective even after the release of the first iPhone? Maybe because it was a major player in its market, and did not expect that market could change itself. The same happened to Kodak, Blockbuster and many other leaders. Technology already changes financial  market, are banks willing to notice it?

James Piggot
James Piggot - Finastra - London 30 August, 2016, 11:451 like 1 like

For there to be a Kodak moment there has to be a Kodak, in the case of banks the market is more diverse and therefore presumably more resilient? People are also conservative when it comes to managing their money so less likely to shift their business quickly.

None of us can know what is going to happen, we can only guess based on the evidence available to us and on our personal beliefs and inclinations.

My personal take is that change will happen and that the pace of change is accelerating. My belief is that my grandson will never have to learn how to drive a car and will live in a world that is powered by renewable energy. His financial affairs will be managed by robo advisors that will optimise his investments and monitor his spending and saving habits to make sure his finances stay healthy. His generation won't know what a cheque is never mind having to write one, and neither will they ever handle banknotes and coins. They will have plenty to keep them busy as they will be dealing with the effects of global warming and with trying to make the world a more stable and equitable place to live in.

Who will be providing these financial services to the next generations? It will be those who can best cope with change, those who place the customer experience at the heart of what they do. In the same way as Ford is moving in to driverless cars alongside Google it will probably be a combination of existing banks (that after all have the resources as Ketharaman says above) and large tech companies such as Google or Amazon.


Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 30 August, 2016, 11:531 like 1 like


I've been marketing and selling technology to the BFSI industry for nearly 3 decades. Then and now, banking contributes more revenues to IT services industry than any other industry. If there's one industry that understands how technology changes financial services and adapts to it, it's BFSI.

Blockbuster, Kodak and Nokia were all individual companies. Banking is an industry. No point in comparing them. You tell me one industry that was destroyed by technology and I'll tell you why that won't happen to banking for the forseeable future.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 30 August, 2016, 11:59Be the first to give this comment the thumbs up 0 likes


On a side note, I was not talking about power and resources. I was talking about banks making highest profits of any industry. If one can be inert - as you claim banking is - and still be the most profitable industry in the world, well, I can bet that all other industries in the world will want to be like banks. That'd be the height of "work-life" balance, to put it mildly!

João Bohner
João Bohner - Independent Consultant - Carapicuiba 30 August, 2016, 17:59Be the first to give this comment the thumbs up 0 likes


"The more direct control that a customer has to understand and handle its financial position, greater the confidence he will have in the bank holding its assets."

(From "The Bank of the Future" whitepaper.)

"What changes must happen...?"

The banks have to handle financial processes 'corporately' rather than dealing by 'Business Units' - segregating the business issues, from those of the technology.





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