Despite significant investments made by big-name financial institutions overseas, ASB’s design chief Selina Petosa believes design thinking is still greatly undervalued by our own FSIs, with banks and insurers across Australasia potentially forgoing a massive ROI opportunity.
Speaking at the 2020 Future of Financial Services, Auckland virtual conference, Petosa, a veteran design leader previously plying her craft at tech giants Microsoft and Amazon, observed that businesses that embrace executive-led ‘design thinking’ are not only inevitably leaders in customer service but also reap tangible financial rewards.
The design methodology – broadly defined by Petosa as an “iterative and collaborative” approach, and simply about “making things better” – has been widely embraced by upstart digital banks, giving them a decisive edge over their established rivals as consumer-centric innovators.
Citing a UK Design Council Report, Petosa noted that “for every dollar invested in design” businesses will net a “125 per cent” return.
What’s more, she noted, US companies that have invested in a design approach have, over a 10-year period, outperformed the S&P 500 index by 211 per cent.
“Design is actually really, really good for business. There is strong shareholder value for those organisations that invest in design thinking.”
While local banks have been slow to adopt the approach, institutions abroad champion its implementation.
Spanish banking giant BBVA has for Petosa been an exemplar in the design methodology, dipping their toes into this innovation wellspring nearly a decade ago.
Beginning with just a “handful” of designers, BBVA now employs a force of more than 400 dedicated designers. The seedlings of design have no doubt borne fruit for BBVA. Not only has its mobile app topped Forrester’s Global Mobile Banking App Reviews for the last three years running, last year the bank boasted a record profit of more than €4,8 billion — the highest in over a decade.
UK big four Lloyds has also been actively embracing design from the top, appointing American Dan Makoski as one of the financial industry’s first-ever ‘chief creative officer’ in 2018.
Styling himself as the ‘chief goo obliterator’, Makoski has made it his mission to transform Lloyd’s into “the Nike+” of the banking world, working to radically simplify and streamline the bank’s “well-intentioned but overly complicated experiences”.
In the footsteps of Makoski, Petosa urged local banks and insurers to likewise offer designers “a seat at the leadership table”.
“Whether it’s having a chief design officer, a chief digital officer or a design practice lead, whoever is in charge of this role that can help build a culture and create an organisation of empathy and advocacy for the customer.”
While stressing that design remains “the job of everyone” in the business, there nevertheless needs to be a coordinated approach to delivering a wholesale design thinking across the organisation, building a team and leadership structure that ensures “somebody is accountable for that experience,” she said.
The traditional design environment has been a decidedly iterative process: “you do your research, come up with the concept, prototype it, bring it to life, test it, launch it, and go through the process again”, Petosa said.
However, she fears this strict linear process will fail to keep pace with future business demands – particularly as consumer needs, business cycles, and social circumstances evolve rapidly and more and more unpredictably.
A modern design approach, Petosa said, requires design teams to match the rhythm of agile development lifecycles – effectively, delivering results “in real-time”. While it is a significant step-change for design teams, she feels this new pace and format could actually complement the natural strengths of designers.
“We have to work within an integrated environment in a cross-functional team that, more often than not, is working in sprints and an agile approach.”
“Design can actually perform in this way,” she said. “They can really accelerate the process and come to better customer outcomes while working in this manner.”
This rapid deployment capability was fully tested during the Covid crisis – a decisive moment for the New Zealand banking heavyweight as it put its ‘sprint design’ capability to the test.
“Banking as an essential service had to show up and we had to show up strong and immediately,” she said.
While ASB was among the first in NZ to deploy a “Covid experience” for its customers, as well as a dedicated SME hub for struggling businesses, innovation for Petosa proved just as critical at the micro-service level, particularly as consumers faced increasing stress.
Among the ‘quick wins’ deployed by ASB’s design and development teams during the early Covid lockdown period was its “one-click transfers” function – an in-app navigation tweak that simplified payments and transfers.
“While this might seem small, it’s actually not small at all,” Petosa said. “We know with our customers that transfers and payments are top of mind for them and something they do the most frequently”.
The contact centre also became a top priority for a design overhaul. Developing what would be dubbed the “fast phone concept”, ASB established dedicated phone lines based on the predicted needs of various customer demographics.
“We had a dedicated phone line for some of our older customers that really needed that reassurance, that support, that competence, that they could actually do what they needed to do.”
Through the scheme, Petosa said the bank assisted 500,000 customers in “taking action during this time of crisis.”
It’s just emotion
‘Customer-centricity’ has over the last decade been baked into the strategies of nearly every bank and insurer today – often to a point of becoming cliched. While FSIs have zeroed in on tracking ‘customer journeys’ and those ‘moments that matter’, for Petosa, “emotion rarely enters the conversation”.
Yet, customer decisions are fundamentally driven not by their limited interactions with an institution, she said, but rather by a “deeper layer” of emotion – emotions that are overwhelmingly influenced by life experience.
“We need to know: What are the emotions that drive those experiences? What are the experiences that we’re missing? Because we’re not actually focused on a customer’s emotion.”
Citing a Harvard Business Review study, Petosa said emotionally connected customers deliver 52 per cent more value and drive as much as an 800 per cent increase in customer lifetime value for financial services firms.
Building these “emotional connections” requires FSIs to actively nurture positive life journeys – to help customers “stand out from the crowd, to have confidence, to enjoy a sense of wellbeing, a sense of freedom and a sense of thrill (when it makes sense), as well as a sense of belonging.”
Ultimately, however, it is about empowerment: “How can we help our customers be the best that they can be, along their terms, and help them succeed in life?”, she asks.
“By asking these questions, what this type of lens allows us to do is really home in on the areas where our customers are feeling vulnerable or needing the most support, and make sure that we’re there for them.”
Of course, no two human experiences are the same.
While attempting to track customers’ unique “emotional journeys” across the course of their lives remains a distinct, perhaps unrealistic, goal, Petosa believes there is enormous value for product and service developers in understanding, even broadly, customers’ emotional responses during these milestone life phases.
ASB has begun building its own “emotional journey” map, effectively tying those ‘moments that matter’ to customers’ anticipated emotional responses.
This required Petosa’s team to first segment key human experiences into broad phases – for example, “growing up, starting up, building assets, building equity, planning for the future” – and then tracking how customers might react in those moments in time.
By matching those “key moments in those phases to how our customers feel”, Petosa’s design team could link ASB’s existing product and service offerings with customers’ anticipated emotional state.
Perhaps, most critically, this process also unearths service gaps where ASB may be failing to meet a key customer moment or emotional need, presenting new opportunities for the bank to “step in to offer help or support”.
“It’s definitely helping us to see how we might fit in and how we might support our customers in their happiest moments, in their moments of crisis, in their sad moments and all of those moments that matter, but at an emotional level.”
“You’ve got to find your inner ethnographer and create a capability of empathy sleuths.”
However, she acknowledged, taking on this approach requires a “level of depth that most organisations just don’t have the resources to [provide]”.
“Really understanding how to make an emotional connection, you’ve got to dig deeper. You’ve got to spend time with your customers. You’ve really got to build a practice around that culture and that ethos.”
However, she said, for ASB, “empathy is part of our DNA; it’s part of our values.”
“Caring, and the organisation that we’ve built: we’ve extended this into the experiences we create for our customers – and it’s really paying off.”