Competitive business strategies are an essential part for banks. Not less so as we approach the implementation of PSD2. Banks have for many years been able to follow the same business models, but with increased use of technology and changing customer demands, banks will now need to revise old organisational habits.
The business strategies used now and in the future need to be highly competitive, for example through offering highly targeted services. This will aim at gaining competitive advantages by meeting customer needs and regain a higher level of loyalty.
Traditional business strategy theories suggests that competitive advantage is achieved by balancing differentiation and cost-leadership. One way to reach this goal could be to lower the internal costs. Another way to gain competitive advantages can be to increase innovation and offer more services targeting the needs of specific customer segments to gain differentiation advantages.This last approach can be taken into account through the use of user centered design for gaining a competitive advantage within great user experiences. By implementing user centered design banks can become more agile and innovative, which are highly valued features to succeed with concept development and differentiation.
This article will describe three simple aspects of becoming more user-oriented: What tactics can banks choose to get there, how can this mind-set be applied internally in the organisation, and what can the positive outcome thereof be?
Know the expectations and needs of your customers
As the consumers are becoming ever more tech savvy, the online banking experience should reflect this. Therefore, investing in your online user experience might affect your entire business positively. Research shows that an unsatisfying online user experience causes more than just a momentary glimpse of annoyance for the users, and even more so for the young users. Many business developers have probably heard this already, but if the online banking user experience does not apply to user expectations, users are likely to:
How to approach this internally?
When planning on creating a more innovative and creative environment for concept development with the end users in mind, then there are some different approaches that might come handy.
Build the foundation
Firstly, make sure to spend time on building the needed foundation for collaboration in the organisation. For this, big organisations are great, as they leave space for many different areas of expertise to join forces. Everyone - also new employees - might come up with the next big great idea, and they might not be too pre-determined and affected by the company culture and previous ways of thinking.
Collaboration across disciplines on planning the product or service design is key for success. By bringing together a variety of areas of expertise, the outcome is more likely to meet the actual needs of the end-user instead of focusing on internal capabilities. Google Venture is a great example of a company that uses fast iterations for failing fast and pivoting. They created a 5 day sprint model that allows for projects to be tested through prototypes in order to be able to iterate fast and allow for more creative work methods. Also, IDEO is a popular example of where to gain more knowledge on collaborative workshops across teams.
User centered products and services do not only require internal collaboration. A central part of delivering great user experiences is to leave the company to meet the end users. This is usually done through interviews and observations that can then be analysed to lead to new and innovative products or services. Talking to your users and making them test your service might reveal new and unknown problem areas.
Facilitate the mind-set
Assemble multidisciplinary team: Use kickoff meetings to align the team’s expectations for minimizing surprises later in the process. Also, this is a great opportunity for the team to be introduced and to align strengths and weaknesses. Make sure to have multidisciplinary skill sets represented at your kickoff meeting and keep your end-users in focus.
Conduct creative workshops: By facilitating a space where every team member can add knowledge and creativity to the group, team members can individually come up with suggestions for how to approach the set problem. Followed by plenum work on these individual ideas, your team can now iterate through divergent and convergent phases to start the design thinking work process.
Positive outcomes of being an UX expert
Even though the financial market is becoming increasingly competitive both due to higher customer expectations and also due to PSD2 opening up for tougher competition, banks still have many strategic solutions to lead them to strong market positions. By providing great customer experience, banks can lower the risk of losing customers from poor customer experiences as well as lower the risk of getting bad publicity. Furthermore, great insight on customer expectations and user behaviour can lead to better future concept development processes. Last but not least, this brings a competitive advantage to the banks, since they will get a better chance of attracting a talented workforce.
For the improved competition that will hit the market after the implementation of PSD2 banks are not necessarily doomed to be a BaaP. Be providing great customer experiences, banks can gain the advantage of being the prefered service provider of one or more financial services.
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