Gone are the days of black and white brick and mortar banks. Today it’s all about the customer and what the customer experiences. This blog post, the third in the series, showcases a couple of examples of how banks, leveraging Design Thinking, are innovatively reaching out to users and connecting deeper.

The Financial Services industry is amongst those that have to constantly innovate to beat competition both in scale (across product lines) and in depth (within each product line). This is, however, easier said than done. The challenge of every CEO and CIO of a bank is to balance the requirement between ‘running the bank’ and ‘changing the bank’ keeping in mind that banks and other financial institutions have to play by very stringent regulations pertaining to finance, data, resources and other parameters across every geography it operates in. To add to this, geographic growth ambitions and constantly evolving regulation have resulted in immense complexity that has corroded the vitals of organizations. Unfortunately, that isn’t all. In a fluid market state where new media and technologies are changing the way people interact, active competition now includes niche non-industry players.

In such an environment ‘design’ will prove to be the single most important and differentiating genetic structure on which financial institutions will define themselves. Design must become mainstream in every part of a banks’ activity. Some banks have identified this differentiator and have put it into application. Here are some interesting examples.

ABN AMRO – Adopting design holistically
ABM AMRO is an innovative bank that takes Design Thinking very seriously. Hugo Koster, a Design Thinking trainer at ABN AMRO, states that innovative banks should always keep the customer in mind. “In order to understand your customer’s needs, you need to understand what kind of people they are. In order to become smarter as a team, and to think of better ideas, you need to understand what kind of people are on your team.”

Just like many innovative organizations, the bank has its own innovation center and trains its employees to become Design Thinkers. It believes that training employees will help them think innovatively and make a positive impact to the bank’s customers.

Today’s customers are spoilt for choice. They have multiple options to choose from – from banks to the platforms that they would like to operate on (mobile, internet or physical branches). This calls for a fundamental change in the bank’s offering and product/service bouquet. Koster adds, “Seen from a design thinking principle, we now live in the age of the customer. The customer has never had so much power, while only using a mobile device. In order to keep up with the evolving world, we are reshaping our IT landscape. This means investing in new technologies and joining forces with fintechs. The bank of the future will look like an IT company with a banking license and will be driven from a customer’s perspective.”

Reaching out to customer with empathy
Empathy is a critical human trait. It is a fundamental in Design Thinking quality too. How does a bank reach out to those who live their lives from payday to payday or, in the case of freelancers, from paycheck to paycheck? Such quality of living affects the mind, curbing it from expanding its horizons.

Bank of America, in association with IDEO, offered a unique program called ‘Keep the Change’. This program was designed to help people have better control over their finances – especially mothers. Design Thinkers associated with the program studied how women ‘rounded off’ their checkbooks – making calculation easier and help in creating a small ‘buffer’. The bank rounded off purchases made with debit cards and the overcharged amount would be remitted into the savings account automatically – and the bank would match the amount.

It was observed that this program helped remove the feeling of shame that came along with being unable to save money. (and also increased the customer base of the bank substantially)