Finance February 28, 2018

How 3 Innovative Banks Use Design Thinking

Remi Schoenmakers

Strategist

Banking is changing at lightning speed and banks have to keep up. But innovation doesn’t always come naturally in big companies like financial institutions. So maybe it’s time for them to let go of traditional innovation methods and turn towards design thinking. That’s exactly what these 3 big banks are cleverly doing. And they have great results to show for it!

1. Bank of America: Keep the change

What was the challenge?

Imagine living paycheck to paycheck, never knowing if you’ll be able to pay the rent or your bills. Bank of America saw this problem in a lot of its customers and wanted to find a solution specifically for them.

How did they apply design thinking?

Bank of America teamed up with experienced product design studio IDEO. The first step was a deep dive into the mind of this type of customer with hundreds of interviews and observations.

The target group’s problem was twofold:

  1. They didn’t have the time or means to even think about a savings plan.
  2. They felt like they had no control of their own finances.

With their insights, they started ideating on different solutions and prototyped those that seemed most feasible. These prototypes allowed them to gain the necessary feedback from the targeted end user.

What was the result?

Out of all the different ideas, the one that proved most valuable was ‘Keep the Change’. With this solution, every debit card payment gets rounded up to the next dollar. The change is immediately transferred to the user’s savings account. 

The amount of money saved isn’t the main driver for the customer. It’s the fundamental need of being empowered and in control that is met by saving even a small amount.

‘Keep The Change’ proved successful:

  • Over 12.3 million customers have enrolled.
  • Together, they saved a total of more than 2 billion dollars.
  • Of all new customers, 60% enrol in the program.

 

2. National Australian Bank: Quickbiz Loan

What was the challenge?

The National Australian Bank was looking for a new way to better serve SME customers when applying for a loan.

How did they apply design thinking?

To find a sure-fire solution, they partnered up with consulting firm Oliver Wyman, who know a thing or two about design thinking.

The team started off by looking at the lending process through the perspective of the customers.

They learned that:

  • the process was too time-consuming and complex
  • online and mobile services make the biggest difference in this experience
  • online and mobile services will be the primary driver for a differentiated service

Based on these insights, they explored and prototyped different ideas. They tested these prototypes with their customer base and collected their feedback. Continuous iterations enabled the team to come up with a more refined version of the product, which they further tested with their SME clients.

What was the result?

Thanks to design thinking, NBA was able to launch a great product within 6 months.

The result is a product called NAB Quickbiz Loan, a simple 3-step online application linked to a dynamic cash-flow credit model. It provides unsecured business loans of up to $50,000 to SMEs, makes decisions within 60 seconds, and takes a maximum of 3 days to disburse funds.

Because NAB applied design thinking to this problem, they were able to launch Quickbuiz Loan within 6 months after the initial problem statement.

 

3. Barclays: Chief Design Officer

We find a different approach at Barclays, who decided to introduce design thinking from within.

Innovation has always been at the heart of this bank. They created the UK’s first ATM and introduced the country’s first credit card. So it doesn’t come as a surprise that they created a new role across the entire group, called the ‘Chief Design Officer’.

The Chief Design Officer connects with end users and makes their voices heard. It’s her job to spread this part of the design thinking mindset across the company. Supported by top-level management, she can make great changes. 

As a result,

  • design thinking is at the heart of how Barclays develops digital banking services
  • Barclays is able to create services that end users actually want (or didn’t even know they needed)
  • their products are truly relevant to the end consumer

 

Getting started with design thinking

Design thinking helps you find solutions that your users actually want and need, drastically reducing the risk of failure. It’s a process that’s very different from traditional innovation methods. As a matter of fact, a lot of established financial institutions are doing the reverse, by focussing on existing internal processes and assumptions. 

If you're ready to take innovation to the next level, read our blogpost on design thinking as a bank. We'll explain why design thinking is important and how you can get started (with a design sprint, for instance) on your own innovation success story.