Security and Delight: Shaping The Modern FinTech Customer Experience

"Security and Delight: Shaping The Modern FinTech Customer Experience" header image

When it comes to fintech, security lives on one end of the spectrum while delight lives on the other.

Think back to the process of balancing a checkbook — this is a very secure process because the bank is in charge of all the transactions. The consumer is simply “keeping score” outside of the vault on pen and paper. It’s a closed system with rules everyone understands.

Now think of browsing Instagram — it’s a delightful (some might say addictive) experience looking through beautiful photos from around the world. The algorithm adapts to your behavior (the data you’re providing it, largely unknowingly) and provides more things for you to look at.

Here’s an issue application developers in the fintech industry are running into: Large portions of their customer base are now used to the delightful experience of apps like Instagram, making them hesitant to return to the secure (yet clunky) process of balancing a checkbook.

While fintech started out as backend applications for financial institutions, the technology quickly spread into the consumer world and is now exploding in popularity. Almost 65% of consumers used two or more fintech services in 2019; a trend that’s likely to continue to rise. Perhaps even more interesting, blockchain and “regtech” (regulatory technology) are the fastest-growing segments within fintech.

A graph showing FinTech adoption in six markets from 2015 to 2019

So what does this mean for product managers within fintech? They need to walk a tightrope of security and delight to achieve both.

In this post, we’ll examine the security and usability spectrum, provide tips on user experience, and show some examples of top-notch execution.

Regulatory Issues Born from Delightful User Experiences

As innovations continue to advance in the fintech industry, regulators have a difficult time keeping pace.

One example of this is blockchain. Since this system uses an immutable distributed and database rather than a more traditional bank ledger, the manner in which audits are performed is fundamentally changed, leaving some fintech applications obsolete.

The mobile wave has also created issues with fintech apps. The instant experiences people expect from their mobile devices open up their data to new vulnerabilities. As the nature of financial transactions becomes more instantaneous, random, and location independent; regulators face challenges that didn’t exist 10 years ago.

But regulatory agencies are investing in technology of their own to enforce these rules, and developers must pay attention.

How Fintech Companies Walk the Tightrope of Security and UX

For many applications outside of fintech, developers have long been trying to achieve as little friction as possible for their users — login with Facebook or Google, optional two-factor authentication, and lax password requirements. This was all driven by consumer preference.

When it comes to fintech apps, however, consumers have different expectations. Research from Experian uncovered that 66% of those surveyed actually appreciated security “hurdles” embedded in their financial apps because it made the app feel more secure. So in order to drive growth and adoption, fintech would do well to slow users down a bit.

A quote. with a lock and key illustration on the left side of the graphic

There is a large difference between slowing users down with intentional security measures and slowing them down with clunky experiences, however.

Consumer expectations around intuitive design and customer support have never been higher. Technologies like digital identity verification can shave time off onboarding and login processes, while AI-powered chatbots can help find answers to common questions in real-time. Both of these options serve the consumer need for convenience, but also security. Features like digital signatures can ward off the unpalatable experience of setting your phone down to print, sign, and fax a document while maintaining a high level of security.

So while providing security and delightful UX is a delicate balance, there are plenty of tools available for developers to satisfy both needs. Let’s take a closer look at some of the ways to serve both needs.

Creating Delightful Experiences With Fintech App Development

Within the confines of financial industry regulation, technology providers must strive to create experiences that keep customers coming back for more due to the competitive landscape. There were seven new fintech unicorns (companies with billion-dollar valuations) from May to July of 2019 alone.

Here are some tips to create memorable user experiences.

1. Prioritize Security

If an app isn’t essential to a user’s finances, or has competition, one data breach is all it takes to lose that user forever. Industry-grade encryption and security protocols are an absolute must for your tech, but you should also take into account human error, such as weak passwords. Because if your app is compromised, even due to improper handling from the user, you’ll be blamed.

2. Consider Compliance

In order to satisfy regulators, compliance is crucial. If your app deals in credit card payments, you’ll need to ensure your data is compliant with Payment Card Industry Data Security Standards (PCI DSS). And now with the much-discussed General Data Protection Regulations (GDPR), it’s critical to treat user data like names, photos, banking information and IP address with the utmost care, including specific storage criteria.

While GDPR currently only applies to users from the European Union, expect similar legislation to follow and cover the globe more broadly.

3. Own Your Niche

Many fintech apps offer microservices — a small portion of the services available at a financial institution. Most users aren’t looking to carry around a full bank in their pocket, or they already have their main financial institution’s app.

Rather, they’re looking to complete a job to be done, whether that’s making a peer-to-peer payment, lending, investing, etc. Zero in on the job to be done and plan to execute flawlessly, as opposed to trying to provide all financial functions in one place.

4. Understand Your Customers’ Goals

Speaking of owning your niche, there’s no point in narrowing your focus on a niche that doesn’t meet the goals of your customers. You must understand what they want to achieve to build addictive, fun-to-use tools that help them meet their goals.

This is especially true if you’re trying to open up a new category, such as Acorns did with micro-investing. Agility and the ability to uncover, synthesize, and create based on the needs of your users is key.

A graph showing why customers typically abandon a transaction

Examples of Technology Companies Nailing Customer Experience

Now that you’ve seen the theory behind balancing security with UX, let’s take a look at a few examples from the real world.

TransferWise

TransferWise is a leader in global payments due to its low-cost service fees. It employs unique technology to accomplish this, and they make this benefit very clear upfront with a pricing calculator.

Furthermore, TransferWise capitalizes on its unique selling proposition with a simple onboarding and seamless UX — the recipient doesn’t even need a TransferWise account.

Acorns

Acorns is a micro-investing app that rounds up credit card purchases to the nearest dollar and deposits the difference into an investment portfolio. The company took an all-too-common investment myth (you need a lot of capital to invest) and completely flipped it on its head (you can invest with your spare change).

With a slick mobile-first design, affordable pricing, and rock-solid security, it’s no wonder they acquired 250,000 users.

HelloSign

In finance, there will always be a need for an audit trail, formerly known as a “paper trail.” With this in mind, HelloSign strives to remove friction from the documentation process with eSignatures that fit right into your existing documents and applications so cleanly, your customers will think they’re native to your product.

Additionally, HelloSign protects your documents with bank-level security, audit trails, two-factor authentication and so much more. This makes HelloSign uniquely suited to satisfy any eSignature needs for fintech.

Walking the tightrope between security and delight may be a delicate feat, but one you’ll surely be able to master to the delight of customers and investors alike if you follow the advice and examples we’ve explored today.

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