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.

The latent cost of convenience

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.

We need to help people to make more considered decisions

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.

This is not my world! … I pressed ‘no’ for all of these. I didn't know what they were to be honest … It means nothing to me

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.

The unexpected reward

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.

An example

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:

1. Chunking

Presenting content in bite-sized chunks makes people more likely to engage with it and helps them process the information more easily. It's a tried and tested idea that's vital for communicating the kind of complicated information that's inherent in many financial products.

2. Timeliness

Chunk carefully! Pushing information into later steps can simplify the interface, but hinder the decision. That's because it increases how much people need to use their working memory. Surfacing relevant information at the point of need reduces cognitive load, so decision making becomes easier.

3. Prompting

Rather than asking 'Do you need this feature?', asking questions that provoke people to reflect on their situation may nudge them to consider their needs more deeply. Use such 'positive friction' deftly and it can create surprising results.

4. Equal weighting

Sometimes smart defaults and primary call-to-actions aren't the right approach. Making people choose from equally-weighted options is more likely to nudge them to consider the pros and cons of each.

Key findings

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:

A sense of ease comes from understanding, not just clicks

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.

It makes you think about questions that you might not have considered
I see this as a learning experience
This is making it easy

Inclusive design makes things simpler and better for everyone

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.

If you’d asked me an hour ago, I would say I don’t need this, but now I would say this is good
No matter how much you know, it’s simplifying the decision-making process

Empowering people creates delight and builds trust

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.

It's comparison with a conscience!

What's best for the customer is best for the business

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

100% sold on this, I would definitely use this for my next purchase
When’s it going to be live? I want to use it

Obligation or opportunity?

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.

We want firms to extend their focus beyond ensuring narrow compliance with specific rules, to also focus on delivering good outcomes for consumers. While firms must continue to comply with our rules, we are increasingly looking for senior management to think proactively about the intent behind our rules, and the impact of their actions on their customers.
CP21/13: A new Consumer Duty

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.

Stu leads a team of experience designers who solve knotty, systemic problems for our clients in Financial Services – delighting their customers and making the regulator happy.