The financial services sector can be an intimidating place. For those who aren’t experts in investments, inflation, mortgages and credit, making important financial decisions may feel like skydiving without a parachute. To avoid this frightening freefall, some people avoid banking and investing altogether, shrinking their financial potential and, with it, the market.
In our last blog post, we looked at the various reasons financial companies may feel disconnected from their customers. With today’s reliance on technology and algorithms, companies can get a little shy about interacting with the real people behind customer profiles, those who actually use their products and services. Our article explored the major benefits of getting past this fear and how crucial genuine customer-centricity is to full participation in the emerging tech-enhanced market.
But uneasiness between a company and a customer doesn’t only run in one direction. In fact, customers can fear you a good deal more than you fear them. Finances can be a huge source of anxiety among the public, even for those who are financially secure. For people with debt, or those with little-to-no financial literacy, the prospect of making important financial decisions that affect their wealth, home and livelihood can be especially daunting. If your products introduce complicated applications, regulations or terminology that confound the public further, you might be pushing customers away. You could even be alienating them for good.
All these factors explain why customer-centricity is so crucial in the financial world. As a financial services company, you need to approach every product, service or banking process from your customer’s perspective, with the aim of alleviating money-related anxiety and helping people make good decisions that improve their lives.
Conscious incompetence and unconscious competence
At ExperiencePoint, we’ve worked with a number of clients in the financial services industry who are eager to ease customer apprehension by making their services better for existing customers and more attractive to prospective ones. Through our human centered design approach, we’ve noticed a customer mindset we call “conscious incompetence.” When customers are aware of their lack of financial expertise, their awareness can exacerbate feelings of self-consciousness or inadequacy. The result is that they become further deterred from buying your products or getting the most out of the ones they’ve purchased.
At the same time, financial companies can suffer from an inverse affliction called “unconscious competence.” Financial companies are full of people with high levels of financial expertise, meaning they’re used to conversing naturally and easily on complex monetary topics. They can be quick to forget that prospective customers may be banking novices. A government study from 2019 revealed that 7 million U.S. households are “unbanked,” meaning they don’t have a basic checking account. And households that do are unlikely to share an expert’s facility with numbers and terms. The upshot? Companies lose customers by not putting the necessary effort into making their offerings simple, attractive and understandable.
Making money matters easy
ExperiencePoint recently worked with a multinational consumer credit reporting agency to address the double-edged sword of conscious incompetence/unconscious competence. The company faced several challenges on a customer-service level, including the need to support customers in better decision-making, simplify lending processes and empower customers to make better use of available data. They were determined to find ways of making their services more customer-centric and surprised to learn that their understanding of what this entailed was miles away from real customer needs.
But once these financial experts applied design thinking frameworks to this challenge, they were able to piece together a comprehensive understanding of their customers’ pain points and address each one systematically. The company participated in an ExperiencePoint human-centered design workshop, ExperienceInnovation™ | Apply, which began with seeing the situation from their customers’ perspectives and empathizing with their time constraints and lack of expertise. (This laser-sharp focus on the customer is the bedrock of design thinking).
One discovery was that customers often trust one another more than they trust institutions; they tend to view other customers as “on their side.” With these insights in mind, the company designed and tested a prototyping platform that allows customers to interact with each other to share tips and successes. Other ideas included a dashboard that gives customers a 360-degree view of the lending process, providing both transparency and education, and an “easy button” that gives customers instant approval on their mortgage applications. The company left the design thinking training with a clear plan for moving forward on the development of these ideas and making customer-centricity a priority. In other words, they made a commitment to making their customers consciously competent.
Telling stories with numbers
Another blindspot that financial companies miss is how abstract and meaningless data can be to non-experts. We encountered this phenomenon through our recent work with a major multinational bank and financial services company that wanted to make their data meaningful and accessible to another kind of stakeholder: their investors.
The company was faced with the challenge of organizing vast amounts of stats and figures into a compelling narrative that would resonate with people. They knew their data was a gold mine of information; they just had to figure out how to use it in a clear, captivating and memorable way.
Capturing and sharing stories is a critical part of scaling innovation across a company. With leadership from a CFO with a background in creative writing, and guidance from ExperiencePoint’s storytelling expertise, the company was able to brainstorm ways of being more transparent and understandable to their investors.
Unconscious competence may sound like a trivial occupational hazard, but it can be quietly sending your customers into the arms of the competition. Design thinking training is a great way to take a good, hard look at the concepts, terminology, rules and regulations that your company takes for granted as accessible. If you’re serious about alleviating your customers’ fears and anxieties, design thinking is a proven way of achieving genuine customer-centricity. By putting yourself in your customers’ shoes, and recognizing their pain points, you’ll be able to design products and services that bolster their confidence and which they can purchase and use with pride.
Interested in reading more about ExperiencePoint’s work in the financial services industry? Check out our client success story: How an insurance company attracted and retained top talent.