Biggest FinTech UX Design Challenges

While banking and finance businesses adapt new technologies with time, there has always been a disconnect between the supply and what the customers are actually looking for.

The FinTech industry has changed the trajectory of the digitization of the finance industry. FinTech, or Financial Technology, is a sector that develops finance-oriented products and services. FinTech UX design strategies focused on consumer demands and addressed the significant gaps within digital financial services.

FinTech businesses have been altering the rules of the game and raising the standards of financial products and services by focusing on creating intuitive products and excellent user experiences.

However, FinTech is one of the most challenging industries for UX designers. In this blog, we’ll highlight the challenges FinTech UX designers face and share some tips to help them create compelling product designs.

FinTech UX Design Challenges

FinTech UX Design Challenge #1: AML and KYC compliance

FinTechs must manage regulatory and compliance restrictions, especially due to the high risk of financial fraud in this sector. While creating FinTech UX design strategies, UX designers need to take AML (anti-money laundering) and KYC (know your customer) compliance into account. They must design solid products with excellent user experience while balancing compliance standards.

One of the best FinTech UX design strategies is to make onboarding extremely easy for new users. However, FinTech businesses also need to obtain KYC (Know your customer) information to verify whether the users are exactly who they say they are before they can perform any financial transactions.

KYC is a financial industry standard that allows FinTech businesses to obtain important information about their user’s financial literacy, risk appetite, and financial position. The primary goal of KYC compliance is to ensure protection for both users and FinTech enterprises.

KYC includes various steps for verification, like address proof, live facial recognition, and other AI-based identity validation features. It’s critical for businesses to integrate KYC validation within their FinTech UX design strategies.

Another vital compliance FinTech enterprises need to handle is Anti-Money-Laundering (AML).

AML focuses on all rules, regulations, and procedures that check to ensure that the financial transactions taking place via the account aren’t linked to any illegal activities and are legitimate income sources. This includes money laundering, fraud, or even terrorism.

While KYC is mainly conducted during onboarding, the AML verification process doesn’t essentially conclude after onboarding. FinTech enterprises constantly hold their users to AML standards and monitor activity throughout their lifecycle.

So how can FinTech enterprises make the user experience smoother while managing KYC, AML, and other banking compliances?

The best strategy is to break the onboarding and verification processes into smaller steps and get the user to commit to the process by making it seem easy and straightforward. If the user is presented with ten different types of verification within a single web page, they would undoubtedly quit and find another product or keep pushing it for late, which may never come.

FinTech UX Design Challenge #2: Cybercrime

While FinTech applications offer higher flexibility and accessibility to people, they are undoubtedly at a high potential to face cyberattacks because they offer the same perks to hackers and cybercriminals.

Additionally, one of the most popular account passwords are either the account number itself or ‘123456’. Cashless transactions and online banking have made things a whole lot easier for hackers to crack such passwords and obtain sensitive data.

Therefore, one of the vital aspects businesses need to consider while building FinTech UX design strategies is cybersecurity.

While people may not create complicated passwords by themselves, FinTech businesses can design their systems not to accept simple passwords. Offering two-factor verification is another way to improve security for your users.

While this may increase friction during the onboarding process, it’s one of those things you can’t pass over. Cybersecurity breaches cause irreparable damage to a company’s reputation, brand loyalty, and trust. This FinTech UX design strategy gives users peace of mind and improves the overall conversion rate.

Tip: One way to make it easier for users to understand the password requirements is to offer an example password.

Another aspect that FinTech enterprises need to consider is the advancement of AI, making the entire banking process more intuitive and sophisticated.

Most people leverage biometric technologies like Fingerprint or Touch ID and Face ID to log into their banking and FinTech applications. However, this technological advancement also opens more doors for cybercrimes.

There have been multiple instances where people have opened locks via someone’s photograph or tricked Face ID technologies when asleep. FinTech businesses must take appropriate steps to protect their customers’ data and privacy.

FinTech UX Design Challenge #3: Complexity

Banking and FinTech products have a lot of different elements. However, banks have always developed fragmented products for different elements because they have different departments working on digitizing them separately. For example, loans, credit, savings, mortgages, cheques, and more.

However, FinTech UX design focuses on building a cohesive ecosystem that embraces this product complexity and provides an intuitive customer experience.

FinTech UX Design Challenge #4: Blockchain Technology

Blockchain is a technology that can highly benefit the FinTech sector. It can exponentially improve how data exchange takes place in the FinTech space, which helps boost trust within the industry.

FinTech enterprises track all the phases within a single transaction and instill accountability by providing receipts to prevent financial fraud like the 2020 Wirecard scandal. A Reuters source stated that Wirecard collapsed after fabricating two-thirds of its sales, with no possible way for it to pay off its debt.

Blockchain can efficiently tackle current digital identity management issues like data insecurity, inaccessibility, and fraudulent identities. It has the potential to completely revamp the way we use digital identity to access various online services, especially in the FinTech space.

However, Blockchain is a relatively new technology and isn’t quite cost-effective for small businesses to leverage just yet.

FinTech UX Design Challenge #5: Accessibility

As the finance and banking sector moves towards the digital space, it has become crucial for businesses to make their FinTech products easily accessible to the public. One of the main complications of Banking and FinTech products is that they have an extremely broad audience.

Not everyone who uses FinTech software is tech-savvy or financially literate. Unlike other businesses that have a specific audience base and can design their products accordingly, FinTech enterprises need to design products for Gen Z, millennials, and the older generation alike.

They need to ensure that their products have enough features to attract the younger audience, but they also need to ensure that their older generation can effortlessly navigate through the product. Additionally, they also need to design their products in a way that their FinTech application is accessible to people with disabilities.

One of the few things that FinTech enterprises can do is create a detailed onboarding process, design a simple mode for people with disabilities, and implement user-friendly font, all the while ensuring that the users’ security and privacy are not compromised.

FinTech UX Design Challenge #6: Help customers make informed decisions

Fintech UX design strategies revolve around making it effortless for users to manage their funds. This includes transferring funds, getting a loan, and a lot more.

Fintech applications are built around helping users save their money and invest efficiently. However, most fintech UX design strategies focus primarily on making their experience seamless so that they may push them into taking actions that may not be right for them.

Businesses should consider the morals and ethics behind making the UX so smooth and easy that users take loans that may subsequently put them in a bad situation.

The best way to go forth is to help users clearly understand the consequences of their actions. While this may create friction in some cases (which no FinTech enterprise wants), it keeps the well-being of its users at the forefront.

A positive aspect could be a budgeting fintech application allowing their customers to analyze their spending habits and helping them save money towards important goals.

Tips for FinTech UX design

1. Don’t bore the customers

People usually consider finance as a boring subject. Therefore, FinTech UX design services need to make this bland and serious subject interesting and engaging while designing their products.

Product managers and design teams can make a FinTech product exciting by adding features like sound effects, interactive graphics, and personalized, fun, and conversational content.

Integrating gamification is one of the most popular ways of making FinTech applications fun and interactive. It improves engagement, reduces stress associated with handling finances, and promotes healthy financial behavior.

FinTech UX designers can include gamification elements like a ranking and reward system, waiting lists, and streaks to boost customer satisfaction and brand loyalty. Keep the flow of the application clean and smooth, and leverage minimal and pleasant colors.

At the end of the day, finance is a serious matter. Therefore, don’t let the fun elements distract your customers too much from what’s important.

2. Don’t overload the customers with information

Finance is already a complicated subject for people. Therefore, users are always looking for solutions that make it easy for them to understand the complexities of finance.

One of the most basic practices for good user experience is to not display too much information. Sharing too much data at once can overwhelm the user and make them uncomfortable while using your FinTech application. More often than not, people will start looking for alternatives that make their life easier.

Remember that most people use FinTech applications on their mobile phones. Therefore, it’s even more important to design for small devices and ensure that information is not crammed within the small screen.

Screens with massive blocks of text only serve to increase the user’s cognitive load, which has a huge impact on usability.

First impressions are crucial, especially for FinTech products. Keep things as simple as you can and ensure that the onboarding process walks the user through everything they need to seamlessly use your FinTech product.

While designing FinTech products, it’s important to steer clear of confusing navigation, complex layout, and ambiguous CTAs. Your design should be centered on what consumers can do after downloading your application and how you can assist them in doing so.

Allow your users to easily access the most common or important features and leverage graphs and colorful charts to make cold financial data easy to comprehend.

A Fintech application shouldn’t have a steep learning curve. Ensure that the infrastructure and navigation of your FinTech product is intuitive to make it easy for users to explore the software application.

3. Don’t burden users with too many features

The paradox of choice is a financial psychological principle that states that the more choices you offer your users, the less happy they are with whatever they choose. When you translate this principle to FinTech UX design, offering a plethora of features to your users will only make them less satisfied with your product.

Users expect FinTech applications to do a lot of things, like allow them to check their bank balance on the subway, track their investments, transfer money, pay their electricity bill, and even book their train tickets. However, overloading a FinTech product design with features can cause the product to bloat.

While it may seem crucial to offer everything under the sun to your users, your perfect FinTech application may become complicated and chaotic for the users, resulting in a bad user experience.

Only highlight features that are absolutely necessary. A FinTech product strategy consulting and design needs to incorporate a lot of features; therefore, be strategic about the product architecture and don’t display everything at once.

Perform usability tests and in-depth user research to ensure your target audience can intuitively find the features they’re looking for. Leverage UX writing to explain financial jargon to users in a simple manner and use it to bring clarity and excitement to your FinTech application.

Final Thoughts

Designing a FinTech product is a highly complicated job. UX designers have to create a product that excites their users without overwhelming them. Furthermore, they need to make a complex subject fun and easy to understand.

There are several FinTech businesses in the industry today, and the global market size is projected to reach over $698 billion within the next ten years.

Standing out within this financial crowd requires more than great ideas and technological innovation.

In this blog, we’ve attempted to give business leaders a clearer perspective of FinTech UX design challenges they need to take into consideration while building their products.

Businesses need to choose the right design agency to help them stand out in this cutthroat industry. WANDR can help you design a FinTech application that reflects your brand’s personality and enables you to stand out from the crowd.

You can book a free consultation and get in touch with our experts at WANDR today!