Design as a strategic superpower in banking

0
15

Activating a design-led approach can delight customers, engage employees and stimulate innovation, writes Gilmar Wendt, principal of creative consultancy GW+Co.

Heightened consumer expectations and the blurring of the lines between hardware, software and services mean that companies need stronger design capabilities than ever before. Research by global consultancy McKinsey found that companies which excel at design grow revenues and shareholder returns at nearly twice the rate of their industry peers. Design skills are increasingly used to make or change business strategy and create better outcomes for customers, employees and businesses.

Design-led change is a collaborative process in which personal relations are a key driver

These “design skills” are not limited to creating a new logo or deciding on a brand colour palette. Designers do many different things – from modelling product prototypes to sketching architectural plans to devising user experience in digital environments. But there are common skills across all design disciplines. These include managing uncertainty, observing and listening to people as they interact with products and services, visualising new ideas in ways that make it easier to share them, and setting up pilot projects or other limited experiments to safely test new initiatives.

Fintech brands have been using design to put the customer at the heart of their products and services, tearing up the financial services rule book and raising the bar for customer satisfaction. Historically, traditional banking firms tended to develop products to meet their own internal processes and operational efficiencies, with design enlisted to create a nice-looking wrapper. But this is changing, as more firms embrace human-centred and customer focused design.

When Lloyds Bank appointed chief design officer (CDO) Dan Makoski in 2018, FinTech Futures spoke to him about his vision of design as “a strategic superpower” in banking. Since then, more banks have begun using design and design thinking in initiatives to transform their organisations, with innovation hubs, UX workshops design support teams and independent design units.

Design was central to Spanish banking giant BBVA’s ambitious digital transformation in 2019, creating a unified brand across all of their digital and physical properties in 11 countries. To really get inside the user’s point of view, the design team was grown from a handful to more than 400 people across nine countries, with 5,000 design ambassadors encouraging employees across functions, departments, and job titles to think like designers. A behavioural economics team analyses products and services like the app through a human-centred lens. Following the new app’s release, BBVA credit card applications rocketed by 80%, current account openings by 20%, and sales of investment funds soared by 50%.

Empathy is central to design thinking, and sets it apart from other creative approaches. It’s about striving to understand the feelings, thoughts, and experience of another human being. It means putting aside your own assumptions to understand why consumers think and behave the way they do. By talking to, observing and interacting with customers, the aim is to try and feel what they feel. This can result in a product or service that really meets customer needs. For example, The Bank of Ireland’s team of design thinkers met with people who had recently been bereaved. Based on what they learned, the bank designed a bespoke concierge service to handle the paperwork and admin tasks that grieving customers may be too upset to deal with.

Inclusivity is a huge issue in banking, and design can help to address this. Design thinkers have developed powerful systemic models that help business decision-makers understand complex, dynamic and unpredictable situations. That’s particularly valuable for any business looking to be more inclusive, because it helps trace the connections between people, services and products where those connections are not obvious.

Design-led change is a collaborative process in which personal relations are a key driver. That involves bringing people together across disciplines, departments and industries, breaking down silos and creating alignment through common purpose. Ideas can come from anywhere in the organisation, and diverse viewpoints are welcomed, having the capacity to strengthen change and innovation outcomes. Design skills can be learned relatively easily by non-designers and applied in pretty much any situation. By inviting everyone to think like a designer, companies can tap into a huge potential source of innovation and creativity. In the emerging field of ‘behavioural design’ the often abstract concepts and language of strategy are turned into definable actions for employees, suppliers and other stakeholders. That’s how you actually get things done.

Some banks have created in-house “innovation labs”, to harness a design-led approach. These can be hotbeds of creativity, but sometimes end up siloed, and struggle to make design thinking part of the firm’s everyday culture and processes. Making a senior appointment such as a CDO can be transformative, as can appointing external consultants to workshop ideas, engage teams and build your organisation’s design superpowers for the long term.

Any design initiative needs to have broad ambitions. The path ahead may seem daunting, but rather than seeking quick, radical change, success comes in many small steps taken with understanding and intent. As Nobel-prize winning economist Herbert Simon put it, “to design is to devise courses of action aimed at changing existing situations into preferred ones”. And isn’t that what we’re all after?