The financial industry needs to shape up its web-based and mobile experiences, and paying attention to how fitness trackers engage users can help, according to new research.
Apps from Strides and Nike+ Running as well as SuperBetter and Recyclebank could give fintech innovators insights into best practices for their own digital products, according to a study from Corporate Insight.
“When it comes to the digital experience, financial institutions recognize they are not just competing with each other anymore. They are also competing with the expectations set by big technology companies like Amazon, Apple, Facebook and Google” says James McGovern, vice president of consulting services at Corporate Insight.
The study looked at digital innovators — both financial and non-financial firms — across a variety of topics, from gamification to security to augmented reality.
Many firms are still in survival mode following the financial crisis and therefore curbing their investment in their digital products, the study’s authors say. “This has created an opportunity for nimble fintech startups to challenge industry conventions around digital experience, product design and pricing.”
Gamification was shown to improve client engagement and loyalty, the study said, noting Domino’s Pizza increased sales using its “Pizza Hero” app feature, while HP grew revenue by $1 billion following the release of its “Project Everest” game. Still, 80% of gamified enterprise apps fail, largely due to poor design, the study noted.
McGovern says goal-planning and security were two areas where wealth management firms needed to innovate most. “Goal planning is often the foundation of the wealth management client experience. Yet at most brokerage firms, online goal planning tools are superficial and take a one-size-fits-all approach to users."
Fitness apps from Nike+ Running and Jawbone’s Up offered excellent models for products that work with clients to set goals, then “deliver a steady stream of personalized positive reinforcement.”
“We believe fitness tracking apps have some lessons to teach when it comes to offering a more engaging goal-focused experience. These tools provide ongoing actionable advice and encouragement to the user based on their physical activities. They offer elegant graphics and rich data visualizations via easy-to-use smartphone apps,” McGovern says. Jawbone’s Up uses machine learning to improve the advice it gives users.
Meanwhile security — still heavily reliant on the system of passwords and user IDs — needs to transition to a biometric system, where users’ identities are authenticated by unique biological markers.
“Fortunately, our research suggests we are on the cusp of a biometric revolution in security,” McGovern says.