Design Thinking in FinTech

This article is kindly contributed by StudioSpace agency, BehindLogin.

The financial services industry has undergone a seismic shift in the past decade, with the rise of FinTechs reshaping everything from payments to savings to investing. What sets the successful ones apart? The ability to truly understand and solve customer pain points. That’s where Design Thinking comes into play.

At its core, design thinking is a problem-solving methodology that prioritises the needs, wants, and limitations of end-users. It involves a human-centred approach, ensuring that each stage of product development keeps the customer in mind. For FinTechs in a hyper competitive environment, this approach can be the difference between creating a product that captures market share and one that joins the graveyard of those that have tried and failed to get a foothold in the market.

Why Design Thinking is Perfect for FinTech
Financial services are inherently complex. Regulations, compliance, security, and accuracy create significant friction points for users. Traditional financial institutions often lean heavily on internal processes, which can result in products that meet business needs but fail to address customer pain points. Many FinTechs have disrupted this model by being nimble and customer-focused, and design thinking has been their ally in this shift.

Brands that embrace design thinking put themselves in their customers’ shoes from the start. It’s about more than just asking users what they want, it’s observing their behaviour, identifying unspoken needs, and solving problems they didn’t even know they had.

The Design Thinking Process in FinTech
Let’s break down the design thinking process and see how teams can use it to create customer-centric products.

1. Empathise: Understand the User
The first step in design thinking is all about empathy. For FinTechs, this means understanding the unique financial goals, challenges, and frustrations of your users. Whether it’s streamlining the mortgage application process or helping young adults budget, empathy requires teams to listen, observe, and learn directly from users.

Monzo took the time to understand users who were frustrated with traditional banking fees and complex interfaces. By focusing on transparency and simplicity, they created a proposition that helped users feel in control of their finances.

2. Define: Identify Core Problems
Once you’ve gathered insights, the next step is defining the user’s core problems. In the fintech world, these often centre around issues like security, trust, transparency, or ease of use. This step is crucial for avoiding assumptions about your users.

PensionBee realised many users didn’t know how to consolidate their pensions or track performance over time. By defining the core issue of “pension fragmentation,” they built a solution that simplified pension management and made it easy for users to take control of their retirement savings.

3. Ideate: Explore Creative Solutions
With a clear understanding of the problem, it’s time to brainstorm solutions. Design thinking encourages a wide exploration of ideas, some of which might be unconventional. At this stage, teams should focus on generating as many ideas as possible before narrowing down the most viable ones.

Revolut tackled the challenge of offering borderless banking by ideating on the pain point of high foreign exchange fees and poor cross-border transaction experiences. Their solution? A digital platform that allows users to hold and exchange currencies at interbank rates, all through a mobile app.

4. Prototype: Build for Validation
Prototyping is the phase where FinTechs bring their ideas to life in a tangible form, whether through wireframes, clickable demos, or MVPs (minimum viable products). The key here is building quick and inexpensive prototypes that can be tested and validated with real users.

Starling Bank’s beta version allowed users to trial features and provide feedback. This allowed them to iterate quickly and roll out features like their ‘Goals’ savings feature, which was refined based on real-world user interactions.

5. Test: Iterate and Improve
The testing phase is crucial for ensuring that your solution truly solves the user’s problem. It’s not just about asking for feedback but observing how users interact with the product in real-world scenarios. Based on their reactions, FinTech teams can make iterative improvements, continually refining the product until it meets users’ needs.

N26 continuously tests its app’s user interface by gathering insights from a range of demographics across Europe. This ongoing testing has allowed N26 to adapt their app to different user expectations while maintaining a high standard of simplicity.

The Benefits of Design Thinking for FinTechs
When done right, design thinking delivers enormous benefits to brands looking to build standout financial products:

• Customer Retention: Products built around user needs tend to foster deeper customer loyalty, as users feel understood and valued.
• Reduced Development Time: By focusing on real customer problems early on, businesses can avoid costly revisions later in the product lifecycle.
• Increased Innovation: Design thinking encourages a culture of creativity and collaboration, leading to products that break away from industry norms and exceed user expectations.

Final Thoughts: Putting the User First
In an industry as competitive as FinTech, User Experience is everything. By adopting design thinking, FinTech product teams can ensure they’re not just building functional products but creating solutions that genuinely improve their customers’ financial lives.

Ultimately, design thinking isn’t just a process, it’s a mindset. One that encourages FinTechs to look beyond their immediate business goals and focus on what truly matters: solving real problems for real people.

By keeping this human-centred approach at the heart of innovation, FinTechs can continue to push the boundaries of what’s possible in financial services, while meeting and exceeding customer expectations.