Financial decisions are different from ordering Pizza.
Allow your users to reflect on what they are about to do.
It is your first day as a PM; you enter a room filled with very senior and intelligent people.
I think that our user journey is too easy and simple and that's not great for our clients.
The room goes silent.
Financial decisions should be (on purpose) more complex than ordering Pizza. Of course, you want to maximize conversion and understand that the traditional banking and investments industry relies on transaction-drive businesses. More transactions lead to more considerable revenues and bonuses. Yet, there’s a big problem that almost nobody talks about (some do).
When your clients are given no time to reflect on what they are about to do and context is missing, they typically engage in self-destructive financial behaviour. Think about it.
Spending with credit is as effortless as it can be. Buying stocks requires 2 or 3 taps at most. Yet most retail self-led investors will end up losing money. The lucky ones will make money but still need to catch up to a diversified portfolio of stocks and bonds.
Your users need a streamlined user flow and context to reflect on whatever they are about to do with their money. And if you think this is not your responsibility, you should think again.
BBVA, the Spanish banking juggernaut, started a heavy campaign to avoid the “tarjetazo”, defined as senselessly swiping your credit card without much regard for the consequences. At the bottom of this are BBVA’s positive intentions about general personal finance understanding and the rising default rates of credit card users in Mexico.
The opposite of dumb simple user flows is not a hard-to-beat high IQ flow but rather an easy but context-driven process. Say you are leading a banking product with rising card defaults. I assume you have tons of data to narrow down the users likely to fall in default, but then what? How do you stop them from overspending?
One potential solution comes from a different domain.
Have you seen those highway radars? Well,
Studies repeatedly show that when alerted by a radar sign, speeders WILL slow down up to 80% of the time. Typical average speed reductions are 10–20%, and overall compliance with the posted speed limit will increase by 30–60%.
here is a link to the source
This could not be more illogical; after all, every car comes equipped with a speedometer. What makes this exogenous speed limit work is a mystery (to me, but psychologists always have good explanations).
Whatever the reason and I don’t argue with facts. And the evidence suggests that this extra context could drive users to “slow down”.
How about showing your bank users the next monthly payment after their last credit card purchase? Does that bring some extra context? How about the interest that this final purchase is about to generate?
When it comes to investments, how do you gently tell your users that buying all that GameStop shares might not lead to the most balanced and diversified portfolio?
The bottom line is that some speed bumps, time to reflect, and context to understand better what is going on can shift user behaviour. But here lies (typically) a business model conflict of interest. But that’s a subject for another time.
