It's time for a different approach to design in financial services

When designing products with a high risk of buyer's remorse, you need a different mentality from the 'don't make me think' approach that most UX follows.

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To help revive our covid-hit retail sector, the UK Treasury is increasing the limit on contactless payments to £100. It believes we'll spend more if we're saved the herculean effort of pressing four numbers into a keypad each time.

It's probably right.

It's a minor development in an obsessive decades-long quest to make money flow more easily. But industry is hardly forcing this on us as consumers. We seem as happy about Amazon's one-click-to-buy pattern as billionaire proprietor astronaut Jeff Bezos. So inevitably designers continue to seek new ways to quench this thirst for convenience. Today, if a click feels onerous you can always set up a subscription to your favourite coffee beans, or ditch the wrist movement altogether and ask your smart speakers to sort it out.

As ease of purchase increases, so too should the risk of buyer's remorse. Yet returning most products has also never been simpler. Easy come, easy go.

But here's a problem: what do you think might happen when design techniques proven to increase convenience are applied to transactions that are harder to reverse – say, deciding what to do with the pension pot you spent 40 years diligently building up?

Think ahead to the next time you buy home insurance. Choose a modern vendor and you'll enjoy pre-populated form fields and 'smart defaults'. Hassle-free sign-up! Just check this box to confirm you've read and understand every one of those seventeen tightly-set pages of terms and conditions. You'll have fourteen days to change your mind – if you can bring yourself to slog through the legalese afterwards. (That's time you won't get back.)

So, have you bought what you thought? It's likely you'll only find out if you need to need to make a claim. That may not be for months, or even years if you auto-renew. So when that moment of truth arrives you'll have to ask yourself one question: do I feel lucky? Well, do you?

Data on failed claims from the Association of British Insurers suggests that one in five of us will be disappointed.

It's not a good look. Financial services companies have only just finished paying out £38 bn for their frictionless decade-long PPI selling spree that began in the late 90s. Yet the impulses that led to PPI now bring you embedded finance like buy-now-pay-later and 'invisible' insurance that's bundled into car hire.

Such propositions meet some legitimate needs and these trends don't have to end in more scandal. But getting it right requires a different way of thinking, especially given the increase in vulnerable situations impairing consumers' decision making.

For essential services, instead of designing for short-term ease or transient experiences, we need to design for longer-term outcomes – by helping customers to make more informed decisions.

In its proposed Consumer Duty intervention, the FCA has flagged notable causes of consumer harm, including the exploitation of information asymmetry, consumers' lack of understanding, and their behavioural biases.

We routinely see the consequence of these issues in our work across the sector: baffled consumers making important decisions they faintly understand.

Here's a quote from a recent research session we ran. It's from someone attempting to buy car insurance – a routine task that requires us to innately know the cost of calling a locksmith. And to grok a succession of boggling concepts like collision waivers, no-claims discount protection and legal cover.

It was too easy to find a quote like that.

For most firms, the dark patterns the FCA has highlighted can be explained by an organisational 'lack of care' rather than a cynical ploy. But the tone of the regulator's consultation suggests they need addressing nonetheless – and sooner rather than later.

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Use qualitative research to address a key Consumer Duty outcome:

How to credibly test consumer understanding

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While you might be tempted to groan at the news of more regulation, there's a reason why you should welcome the Consumer Duty: in our experience if you help consumers to make good decisions they will reward you for it. It increased conversion and revenue for RAC, and reducing information asymmetry led to similar ROI for The Co-operative Bank.

But getting it right means knowing when to make things quick and when to slow people down. It also means understanding how to slow things down. Often, it requires disclosure of the negative side of a product and a willingness to help people avoid making decisions they may regret.

We've found it requires a different mentality – and a different toolkit – from the 'don't make me think' approach that most UX follows.

To solve these problems, you need new techniques to get inside the consumer's decision-making process, including the specialist skills needed to lead research with people in challenging situations.

You also need a way to give stakeholders the confidence to sign off on products that can feel unorthodox because they run counter to the Amazon and Apple experience that senior visionaries often request.

We recently designed an online journey to help consumers understand important differences between types of financing products. Rather than asking them to compare a set of options, it first helps them to better understand their own needs, before revealing which product categories map most closely.

The solution feels deceptively simple, but there were some important details to get right. Here are a few:

This all sounds straightforward. But it takes skill, care and, of course, iteration. Only fibbers get it right first time. In this case, when we tested the final version of our prototype, it was clear that we'd found the sweet spot. Here are some takeaways from our research:

People don't measure ease purely in terms of physical effort. Reduce the mental effort needed to make a complicated decision and you'll trigger the same reaction.

The techniques we used to help less able consumers make good decisions were also valued by 'experts'. That's because when you design for people with a wide variety of needs you gain insights into everyday problems. It helps you design more effective solutions.

Many consumers have a nagging sense that the financial services game is rigged or lack confidence in managing money. Help them in unexpected ways and they begin to feel empowered and in control. When expectations are low, it's a great opportunity to build trust, and even trigger a memorable moment of delight.

Understanding, ease and trust all build confidence – making people more likely to engage with your service.

The tone of the FCA's Consumer Duty consultation suggests real intent to raise the bar. It wants to drive a 'significant shift in culture and behaviour', and expects firms to 'get it right first time'.

And between the lines is the sense that the days of hollow customer-centric platitudes, of optimising for near-term trading figures rather than long-term customer outcomes, and of box-ticking approaches to compliance are all coming to an end.

In our experience, reduced regulatory risk is not the only reward for firms that truly embrace this challenge. What's best for the customer can be best for the business too. But you need a different mindset, a different set of design tools and the confidence to go against the grain.

Let talk about how to make that shift.