UX of Money
I recently spoke at Creative Mornings – a TED like conference for designers, that happens every month, all over the world. I shared my experiences designing the “UX of Money”.
I showed that by designing a better way to interact with money, Xero dramatically improves the success rate of small businesses.
My conclusion is: if you want to fix the economy, hire a designer.
Banks are the new record labels
It was quite interesting doing the same talk a few weeks later at the Next Bank conference – speaking to a room full of bankers and economists. Watching bankers talk about digital innovation was pretty amusing. It reminded me of my previous life in the music business, watching record labels talk about digital innovation. The parallels between banks and the music business are deeper and crazier than you’d imagine!
Most of the Next Bank videos are online. There are some really interesting talks (here, here, here, here) – but for maximum fun I recommend you play a drinking game – take a shot every time you hear the word “innovation”. These are smart people, the ones in the banking industry who get it, and it’s fascinating to see the industry struggling to come to grips with digital disintermediation.
One of the major dilemmas they face is trying to build better experiences on top of old, complex, rigid systems – meanwhile consumers have come to expect increasing feats of magic from their online and mobile experiences.
Like music, money is just data
The disruption occuring in the banking industry is the same as we witnessed in the music industry, and the same playing out in the accounting industry. The cloud changes everything. When data flows instantly between connected systems and apps, suddenly the concept of a bank – a “trusted place where you buy and store money” – has little meaning since money is simply data in the cloud.
The irony is banks used to be at the forefront of digital technology and user experience: mainframes were created to run banks, banks invented the original digital money: credit cards, and the ATM, and online banking. In many ways, banks are largely responsible for the cloud technology the world now relies on. They set the standard that others followed. Banks have always known money is just data. But the world has caught up, the advanced technology that only banks could afford is now basically free and child’s play to deploy. ‘Big’ technology is no longer a competitive advantage.
Most banks also still think “their” data is a competitive advantage. Firstly, it’s not their data. It’s their customer’s data. And if that data isn’t available when and where people need it – anytime, anywhere, in any app – then the banks are increasingly away from the game. In the cloud, providers with robust data services naturally gain market share as they get baked into the ecosystem of apps people are using.
Banks have in the past been obsessed with “owning the customer” – being the one and only bank of choice. Based on our own numbers, we see 25% of small businesses have multiple banks. It’s best practice for large businesses to split their banking across multiple banks to secure competitive deals – mid-sized and small businesses are doing the same, as well as consumers. We all know that many people deliberately fragment their banking relationships to explicitly hide the full picture from their banks. The more banks try to own the customer, the more it pushes people to find better options.
It’s encouraging to see this realization and the mind-shift already happening with many of our partner banks.
Bank of Apple
At Next Bank nearly every banker said if Apple decided to provide banking services, they could take over and dominate the industry over night, like they did with the music industry.
How could Apple possibly take over the banking industry?! Because Apple can provide the type of user experience people will switch to in a heartbeat. And like music, money is just data, so the user experience is what matters most.
It will be very interesting to see who will design a better banking experience and become the Apple of banking. There are a few interesting, well designed experiences emerging, like Simple, YouMoney, Dwolla and even Bitcoin.
Many of our banking partners are adding design and UX roles to their core teams. But is that enough? The user experience with the bank itself is only part of the picture – the experience across the entire ecosystem of apps is equally, if not more important now.
If banks don’t design their services to work within the ecosystem will they suffer the fate of record labels?
It will be fascinating to watch it play out. The best thing is seeing the massive improvements that design and user experience are making in our lives and our businesses. It’s not an isolated effect, it’s cutting across the entire global economy, making entrenched large scale institutions like banking better as a result.