A bank was once primarily a building with marble floors and high counters—a place you’d enter to deposit or retrieve your money. Cash machines and online banking moved the experience away from the lobby, but those were only extensions of the traditional ways banks thought about business. So when Josh Reich and Shamir Karkal, two MBA students at Carnegie Mellon University, went looking for ways to innovate in banking, they decided to start from the other direction, designing the mobile and online banking experience first and building the business around that.
They teamed up with Alex Payne, an engineer who was one of the first employees at Twitter, and set about creating BankSimple, a service that aims to make banking, well, simpler. They have partnered with an existing bank, which will hold the money in federally insured accounts, but the user interface is all theirs. Customers will notice it in all their interactions with the bank, says Bill DeRouchey, BankSimple’s creative director. “There was a designer somewhere in the process who has thought about every single touch point, every single aspect, and has just made every single moment as valid, as graceful, as appropriate, as possible,” he says. BankSimple is due to launch this year.
To design the experience, they looked for insights from behavioral economics, which relies on psychology to understand economic decisions. For instance, it’s easier to get people to try something if they have to opt out of it rather than opt in. The team applied this insight to a feature of the bank that allows people to set aside funds toward a particular goal; it’s not a separate account, just a line highlighted on the screen with a label like “Hawaii trip” or “new laptop.” To encourage customers to try the feature, BankSimple starts them with the goal of saving $1,000 in an emergency fund.
To relieve people of the off-the-top-of-their-head calculations they might have to make when checking balances, the interface prominently displays a “safe to spend” balance, which deducts amounts set aside for goals, upcoming bills, and card debits that have not yet been processed. As a result of e-mail conversations with volunteers who’ve signed up for a future beta test, designers are tackling the aspects of banking that frustrate people. They promise there will be no hidden fees; all legal fine points will be presented in plain English; and users will be able to reach a real person in customer service by whatever means they prefer—e-mail, Skype, telephone, online chat. There’s even a designer working on making the experience of getting the bank card in the mail more interesting. “They need to activate it and sign it, but also they want to have that moment of joy,” DeRouchey says. Thinking about such issues helps a business’s brand, he says. “Every single moment that your customer interacts with you, those individual moments add up to what your user thinks of you and says about you and feels about you.”
PNC Bank took a similar approach when it hired design firm Ideo to find ways to attract younger customers. The designers used ethnographic methods—observations, user diaries, in-depth conversations—combined with quantitative research on how people spend money. The approach was “let’s really understand what people need, then see if it’s technologically feasible,” says Ideo designer Mark Jones. They noticed that young people, even those earning a lot of money, would check their accounts several times a day, suggesting they were financially on the edge. Ideo took these insights and designed the Virtual Wallet, with features to keep better track of expenditures.
They also heard stories about people getting some extra money they wanted for a specific goal and choosing to stash it somewhere—in a drawer, under the mattress, even in a souvenir coconut. So Ideo created “Punch the Pig,” an icon of a pig that a user could click on to spontaneously set aside a small amount of money, getting a small emotional kick at the same time.
Mike Ley, vice president of e-business at PNC, says the bank has been generating new accounts and getting positive feedback since it introduced the Virtual Wallet in 2008. He won’t give out actual numbers but says the retention rate for customers has been higher than with more traditional banking products.