"Why Experience Design is Marketing Gold: Open Banking Gets a Big Jump Start from COVID"

"Why Experience Design is Marketing Gold: Open Banking Gets a Big Jump Start from COVID"

Great experiences beg to be talked about. People are very quick to share their stories of a new restaurant, movie, or product because humans desperately want to be the bearer of new information. This is where experience design comes into play. By creating exceptional experiences for customers, companies can tap into the power of word-of-mouth referrals, which can lead to exponential growth.

Iteration and innovation are important in any company, but when products become profitable, they are slightly iterated on over and over again due to their proven viability. However, companies should also focus on creating great experiences that hit all levels of the consumer journey. These experiences not only lead to lasting memories but also drive traction and prevent companies from radically changing something that is already selling well.

Referrals are the most important metric/indicator of a successful business because they prove that what you are selling is actually remarkable. When customers have a great experience, they are more likely to share it with their friends and colleagues for the sake of expression, not for any ulterior motive. Trusted recommendations from friends and family cost zero dollars and can lead to real growth.

On the other hand, overt marketing and sales tactics can be transparent and disingenuous, resulting in consumers marking newsletters as spam or being turned off altogether. People don't like being sold to, but they love talking about experiences. This is why it is crucial for companies to find value/danger in their offerings and communicate it effectively. By ruthlessly analyzing, conceptualizing, and testing, companies can create amazing products and services that transcend time and spread virally.

Now, let's shift our focus to open banking and how it has received a big jump start from COVID. Open banking is not only an opportunity for third-party providers but also for traditional institutions. By promoting access to third-party applications on a secure basis, banks can offer a wider range of products and services. One aggregator, Plaid, already has more than 2,500 organizations registered to use their API.

While the U.S. banking market has not taken a regulatory-driven approach to open banking, it has followed a market-led path. However, in Europe, the U.K., India, Hong Kong, and Singapore, regulator-led open banking frameworks have been implemented. This has resulted in an explosion of third-party providers (TPPs) and increased collaboration with fintech providers.

The demand for applications that focus on budgeting, savings, and financial management has increased. However, it is important for institutions to ensure a secure and reliable experience for their customers when engaging with TPPs. The practice of screen scraping, in which third parties use consumer-supplied passwords and account numbers to access banking information, is widely seen as a security risk. Some banks have already taken steps to block this practice, and it is believed that once a more reliable and secure path is offered, fintechs will abandon screen scraping overnight.

In conclusion, experience design and open banking have both proven to be marketing gold. By creating exceptional experiences, companies can tap into the power of word-of-mouth referrals, which can lead to exponential growth. Similarly, open banking offers traditional institutions the opportunity to expand their product offerings and collaborate with fintech providers. In both cases, it is crucial to prioritize security and reliability to ensure a positive customer experience.

Three actionable advice for companies looking to leverage experience design and open banking are:

1. Invest in creating exceptional experiences: Focus on every touchpoint of the consumer journey and create memorable experiences that customers will want to share with others.

2. Collaborate with fintech providers: Explore partnerships with fintech companies to offer innovative products and services that align with customer needs and expectations.

3. Prioritize security and reliability: Implement robust security measures to protect customer data and embrace open banking frameworks that eliminate risky practices like screen scraping.

By incorporating these strategies, companies can harness the power of experience design and open banking to drive growth and stay ahead in the competitive market.