Design Thinking to shore up banking

Design thinking involves understanding your customer much deeply...understanding their needs and how and what would interest them with the bank when the product or offer is given to them...this is the true outside-in approach, diagrammatically opposite to what the banks have traditionally been doing. It is much about empathising with the customer and giving it back to them. It is the building block of improving the customer experience that banks are trying hard (or may be hardly trying!)

It is required to do appropriate research to understand what the customer wants...what his needs are...where his needs are. The years of data and analytics investments should come in handy for some initial understanding of the customer. One can even do primary research and focus groups with customers to understand them better. Imagine your goal is to acquire deposits. Directly observe, what do customers do...where are they keeping their money...what motivates them...what leads to their frustration?

In your goal to acquire deposits as a bank, important is to think of where the problem in entire lifecycle of deposit acquisition, and deposit accumulation lies? Essentially what is the problem statement to achieve your goal? It will be worthwhile to stack up the current customer experiences and see what doesn’t and does makes sense?

Product managers need to ideate all the possible thoughts and solutions and see what resonates. There should be a capability to test these out with a limited set of resources. Initially, it could just be simple simulation of various scenarios and checking them out for different situations. And then test launch with either a select group of customers, or even the bank staff, for a limited period of time. It would be interesting to keep a feedback loop, to gather the feedback and improve the offering, before its launched for good to the wider customer base.

The most encompassing theme of design thinking is empathy, and hence, the customer, as the fulcrum of all decision making. Thus, customer needs are paramount. With this belief, product managers will have a customer centred offering, which not only serves the customer’s larger purpose and drives up the customer experience, but also meets bank’s demands of revenue and profitability.

Personalisation of the product or service to the customer needs is one such simple way of applying design thinking in day-to-day banking. To facilitate this seamlessly, banks needs a process and a capability which can enable it across the products and services and customer segments within the bank. Imagine, if the bank is able to personalise the deposit accumulation offer to the customer, who does a lot of month-on-month credit card transactions, or a personalise the deposit rates because the customer utilises the overdraft facility. Important to note, it is for “a” customer.

In the open banking and open economy world, when it can be much simpler and easier for the bank to design offerings for the actual need of the customer, and thereby, own the end-to-end customer experience. Imagine, the bank being able to fulfill the entire home buying journey of the customer, where the actual need is the house, while the mortgage provided by the bank is just incidental. Other services in this journey – brokers, legal services, utilities, white goods, logistics, etc, can become part of the bank’s ecosystem and larger catalogue of products and services that the bank can offer. The customer comes to one stop shop and gets all the services in a package that fulfills his actual need.

Another way to imagine use of design thinking to banking is the movement away from fee-fleecing account based model to customer-centric value based model. Of course, the widespread digitalisation, driving personalisation and value based experiences from other industries, leading banking customers to expect the same. Such value based models are necessitated by such customer desires. At the heart of it is customer empathy and design thinking. Instead of paying high transaction fees on accounts, customers are willing to pay for personalised experience, including relationship based pricing.

Digital companies in other industries have taken such value based models to drive supreme customer experience and brand value for themselves. One such company has recently decided to discontinue the subscription and hence, the subscription fee, for the inactive customers. Their belief to charge only if the value if being created for the customer, is the defining moment not only for their industry, but for the other industries as well.

Similarly, design thinking can be used in multiple other ways to offer curated customer experiences. It is an important management principle that banks are starting to leverage and gain wholesome benefits across the board.