With more to do and with fewer resources available, treasury professionals increasingly lack the time and patience to deal with clunky and inefficient banking services and systems, and are calling for a better user experience. But are the banks listening and what comprises a ‘good’ user experience? Treasury Today finds out.
Apple founder Steve Jobs had a simple philosophy towards product design: start with the customer experience and work back toward the technology – not the other way around. It is a philosophy that continues to influence every product that the company produces and is arguably one of the biggest factors in Apple’s success.
Although simple, Jobs’ philosophy was pioneering. Until then, companies had typically designed products they thought people needed with very little customer input until the very late stages of production. Jobs’ thinking not only brought success but also inspired a whole new generation of innovators who have looked to follow Jobs’ example, designing products and solutions that provide an excellent user experience.
In perspective: user experience
User experience is a very broad concept and definitions will vary depending on who you speak to. The Nielsen Norman Group provides a succinct summary: “User experience encompasses all aspects of the end user’s interaction with the company, its services, and its products.”
Alberts Pumpurs, Partner at the UX Design Agency, expands on this definition, saying that companies who provide a good user experience are those that enable “the customer to meet its objectives in a straightforward and efficient manner”. To provide an example, Uber has revolutionised the taxi business, not only by allowing anyone to be a driver but by enabling customers to easily order a taxi, track its progress and pay for it automatically at the end of the ride. The user experience provided by Uber is better than calling a taxi office and waiting for the car without any knowledge about its status.
Companies that provide a great user experience will typically also offer an intuitive user interface – the platform with which the customer interacts. Uber’s app is intuitive and clearly provides its users with all the information they require.
User experience is not a modern concept. Pumpurs explains that companies have “unconsciously” always been looking to improve user experience, typically through the development of better user interfaces. The science behind it, however, only began to take shape in the 1950s with the publication of American industrial designer, Henry Dreyfuss’ book, Designing for People. In his book, Dreyfuss wrote: “When the point of contact between the product and the people becomes a point of friction, then the industrial designer has failed.” But only in the past 20 years have these concepts attained a new impetus.
Indeed, for Pumpurs, the need for all businesses to focus on user experience has only become more important with digital start-ups embracing these concepts and challenging ‘traditional’ companies. “To make themselves stand out in a well-entrenched and highly competitive market they have to make their services useful, intuitive and fast,” he says.
This is especially true in finance, where the proliferation of fintech has saturated an already well-populated market. In the payments space (which we look at in more detail in the Insight & Analysis article), for instance, well-known fintechs such as PayPal and Alipay now offer their users the ability to make payments quickly and easily. With Alipay and PayPal’s registered users numbering 400m and 197m respectively, these services are significantly disintermediating financial incumbents. In response, banks have invested heavily in their own user experience in an effort to retain and deepen their customer relationships – especially in the retail space.
The corporate view
But what about in the corporate space? Are banks and treasury technology vendors keeping up with the pace of change? The corporate treasurers consulted by Treasury Today suggest that there has been some improvement, but that there is also still some way to go.
Damian Glendinning, Treasurer of Lenovo, called out the banking community on the user experience it offers when speaking at a panel moderated by Treasury Today at Sibos in 2015. Glendinning pointed out that he used a better online banking portal as a consumer than he did as the corporate treasurer of a multinational corporation.
This point was recently seconded by Cale Bennett, Group Treasurer at Tatts. “In Australia, the user experience offered by the banks in the consumer space is fantastic,” he says. “But very little of this development has flowed through to the institutional space yet.”
In the United States, Guillermo Gualino, Vice President and Treasurer at Agilent Technologies, has similar comments. “In general, corporate banking systems are not easy to use,” he says. “I believe this is because each bank wants to be ahead of the competition so they will over-feature their online portals in an effort to stay ahead, with little thought about the user experience. As a result, they become more complicated and thus less attractive to use, despite the new functionality.”
Referencing Microsoft founder Bill Gates, who said in 1994 that in the future people will need banking and not banks, Gualino says that banking portals are simply a tool used by treasurers to do something. “We want to get in, make the trade and then get out again,” he says. “It should be simple and efficient – and if it looks nice as well then that is a bonus.”
There are a variety of reasons why the user experience provided by commercial banks is lagging behind the retail space. As Susan Feinberg, Senior Analyst at Celent, who recently conducted a study in this area, explains: “Commercial banking is far more complex with much more functionality that needs to be delivered. Commercial banks have therefore traditionally been much more focused on functionality rather than user experience.”
As previously mentioned, the rise of fintech has highlighted how banks could provide a better user experience. But Morgan McKenney, Head of Core Cash Management at Citi, says that that size of balances and the value of transactions in banking for corporates mean that security is paramount. “Although treasurers are calling for a better experience when working with banks, they are still primarily concerned with the security of the firm’s money and information,” she says. “To offer both security and world-class user experiences each requires a lot of time and resources, which may mean rebalancing priorities sometimes.”
Banks are also hamstrung by myriad legacy technology, further impeding their ability to improve user experience rapidly. “Commercial banks offer a vast number of products,” says James Haycock, Managing Director at Adaptive Lab. “Over time as new products have been introduced or existing ones have evolved the systems have become increasingly complex. Just keeping up with compliance related changes consumes the vast proportion of budgets and that’s before any investments in innovation.”
It is not just legacy technology that Haycock sees impeding the banks. “While banks are experiencing greater cost pressure, most remain profitable so there’s not a great incentive to change. This means many are doing things the way they always have. They’re very product centric rather than customer centric for one. I think this surfaces itself in how they go about improving or designing products with design still often seen as an activity taking place later in the process rather than from the beginning where it can have the greatest impact.”
Haycock believes the operating model of banks further impedes innovation. “Banks operate in silos: which is evident when you call them or in the digital experience you have,” he says. “Digital is still seen by many as a channel when actually it’s a lot more than that. Until banks more seriously reconsider their approach to the design, delivery and improvement of experiences this problem will continue to be exacerbated.”
Innovation in action
Indeed, it is realigning the bank’s different business lines and removing silos behind the scenes that is perhaps key in their efforts to offer a greater experience to their clients. As Citi’s McKenney details: “Providing a great experience to our clients goes way beyond developing a digital platform that is easy for treasurers to use. It is also about looking at the end-to-end process flow within the bank and how efficient this is. You may have a great looking internet portal, but our clients ultimately are impacted by a bank’s full end-to-end processes.
McKenney explains that in essence every step the bank takes is designed to improve the user experience it offers its clients. Such steps include removing paper from processes, providing single access to applications and simply making the answers to frequently asked questions available online – saving clients the time and effort involved in contacting a call centre. “These may sound like small changes and fairly straightforward, but the bank has had to take a conscious effort to take these steps,” she says.