back to latest articles

Bank Digital Transformation Strategy Depends on Mindset

0

Bank Digital Transformation Strategy Depends on Mindset

Digital technology disrupts the financial industry and all bank branches could be closed by 2034. Digital disruption focuses on customer expectations and behavior, which is a game changer. We see global banking digital transformation, but it is not always customer-friendly. Why? We believe it's because of a lack of an Experience mindset.

Disruption of the industry requires rapid banking digital transformation

Current trends suggest that all bank branches in US could be closed by 2034, according to "The Death Of The Banks" study. So, the digital transformation in banking has become the number one priority. The digital age has had a drastic impact on the service and product consumption behavior in the financial industry. Consumers get used to well-designed products and services from technology companies, and they’ve become more and more selective about what they choose to use. Their expectations are growing, and they compare banking services against the user experience provided by well-established technology companies. You have most likely heard the phrase, “This sucks... when will Apple or Google disrupt this?”

Customers actively consume digital banking services from both traditional banks and Fintech startups. Competition in the industry is growing at a rapid pace as customers are receiving more and more opportunities and offers every day. The digital technology experience disrupts the banking industry. Consumers are no longer loyal to only one bank, often switching from one bank to another. Many even use several financial services simultaneously, especially via mobile applications.

Million-dollar marketing and advertising budgets don’t even help traditional banks. Consumers ignore advertising, so its effectiveness is reduced. Even using digital promotions through social networks, video services, blogs, etc., does not always achieve the desired results. At the same time, some young and ambitious teams gain tremendous traction through the creation of financial services without such resources as traditional players.

For example, the mobile wallet, Revolut, with almost no marketing budget in three years, secured 2 million users in Europe. And the online transfer service, Transferwise, moves more than 2 billion pounds every month on a global basis. The number of similar financial services is growing and will continue to increase thanks to the legislation of open banking.

Find out how to drive digital transformation in banking using CX strategy.

Successful banking digital transformation strategy depends on the mindset switch

It looks like successful neobanks have some kind of “special sauce” or secret technology. In our opinion, they have only one main advantage, which is obvious — the mindset of their founders and team that determines their approach to business, the culture of the organization, principles of product design and customer service. It’s just more relevant to the digital world in comparison with the traditional banking players and helps to find right solutions intuitively.

Thanks to technology, the world is rapidly changing and we are witnessing disruptive digital transformation in the banking industry. Thus, in the banking sector, like any other, only those who are able to accept these changes and integrate them will rise to the top. But, we are not talking about simply the implementation of innovative technologies. Modern technology, the best specialists and trending design tools will not help a business that ignores, and does not understand the rules of the digital world.

In the digital world, success is achieved not by creating a selling package for a product, but by turning the product into a value that sells itself.

If you want to ensure your organization's success in the future, then it's time to change. A sharp focus on your customers’ requirements and desires is critical. It is their needs, perception and experience that play a key role in the digital economy. Don’t try to manipulate them; instead, you must cultivate an empathy for them. Be useful to your customers, and they will provide an unexpected power for the growth of your business.

The customers of today expect a more ethical, responsible and honest attitude from their financial institution, as well as attention to their needs. Only such an attitude can ensure long-term success in conditions of digital transparency, total socialization, globalization, the disappearance of intermediaries, low market barriers, high competition and changes in consumer values. This type of thinking differs from the usual mindset of consumers as a resource used for business development. We call it the “Experience mindset.”

As a company that designs financial services on the principles of an Experience mindset, UXDA receives a lot of questions from financial experts. Successful digital transformation requires a deep understanding of the processes associated with user experience, design, and a customer-centered mindset. But why some companies that perform digitization in banking and declare own customer-centricity, or even implement UX methods nevertheless suffer defeat in the market?

We've found that it's not enough of statements, you need the right mindset fundamentals that impact organization culture, strategy and priorities. Instead of outdated Marketing mindset which is focused only on sale, we should implement Experience mindset which is focused on creating value for customers. This is the only way to survive in the age of digital disruption and make longterm profit.

Read more about how to switch your company to Experience Mindset

To learn more you can watch 2 hour UXDA webinar about Experience mindset.

Read more about digital transformation in banking:

Banking Digital Transformation Fails Without User Experience Transformation

7 Crucial Steps Toward Successful Financial UX Transformation 100% Remotely

The UX Design Formula for a Digital Product Breakthrough

Guide to Successful Digital Transformation in Banking Through Value

Get UXDA Research-Based White Paper "How to Win the Hearts of Digital Customers":

If you want to create next-gen financial products to receive an exceptional competitive advantage in the digital age, contact us! With the power of financial UX design, we can help you turn your business into a beloved financial brand with a strong emotional connection with your clients, resulting in success, demand, and long-term customer loyalty.

Share:

Listen to our podcast:

More from our blog

UX / CX Checklist for Bank Digital Strategy Implementation

We have all experienced the moment when we understand that the time for change has come. Often these changes are associated with personal challenges. Most of the time we want to implement them as soon as possible and in the easiest way. This also...

UXDA Wins Gold at the London Design Awards 2018

We are 'over the moon' to announce that UXDA has Gold in the London Design Awards 2018. In 2018 Silver was given to Arival Bank, Deutsche Bank and Comdirect Bank. Previous years awards were received by Acorns, Paypal, Stripe, Robinhood, Moven.

Solve Pain Points through Information Architecture in Banking Product

Finance Digitalisation causes many banks to adjust their approach to the development of their products and services. Today, more and more financial companies evolve by creating user-centered services and simpler and more convenient solutions...

UXDA Wins Platinum At The Summit International Awards

UXDA started 2022 as a Platinum winner in the Financial Marketing category of the Summit International Awards.

AR / VR Banking Will Revolutionize The Financial UX

There's no doubt that banking in Metaverse will take the customer experience to a brand new. What can you expect, and what's the best way for the banking industry fully embrace the opportunities of the digital future?

🎧 Provide Maximum Value with Digital Channels in Banking

How can financial companies survive the GAFA attack and ensure a successful digital transformation while it's not too late? The only way to avoid losing clients is to focus sharply on the value financial product provides to the customers.

What Do the Financial Experts Say About UXDA's Work?

You will be surprised to hear what our customers reveal about UXDA work process in independent Clutch research. I am happy to announce that UXDA’s NPS (Net Promoter Score) has reached 76 points — the same level as Apple, Amazon, and Netflix.

UX Design Success Story: Shaping the business mentality

UXDA review by ITTI Digital for which UXDA delivered a UX transformation of a 15-year old core banking solution.

Why Customer Experience in Financial Services is Sabotaged

What leads to a bad outcome when it comes to customer experience design in financial services?

ABOUT THE AUTHOR

Alex
Alex, Founder/ CEO/ UX Strategist

Alex has dedicated half of his life to studying human psychology, as well as business success, developing 100+ digital projects and 30+ startups. He spent 10 years researching UX and finance to create UXDA's methodology. Alex is a passionate visionary who's capable of solving any challenge to improve the financial industry.