Three Ways Big Banks can Learn Customer App Lessons from Neobanks

In a digital world dominated by multi-features, super-apps and increasingly entertaining and customizable mobile interfaces, banking apps, with their tendency to incorporate lengthy user journeys and complex financial jargon, can often be boring and user-unfriendly.

But neobanks are solving these challenges

So-called ‘neobanks’ or ‘challenger banks’, as fully virtual entities, with no physical branches or face-to-face customer support, offer only digital products to their customers. And they’ve begun to introduce more user-centric banking apps – built to satisfy the needs of customers who want to manage their finances through a few taps on their phones.

Using user-centric design, neobanks are prioritizing the user experience (UX) and user interface (UI), offering apps that are intuitive, easy to navigate, and visually appealing. By embedding UX in their design processes, neobanks have transformed the world of banking apps, offering seamless online user experiences, built around the users’ needs and pain points.

And this is showing the way for traditional banks

This focus on simplicity and functionality has raised the standard for traditional banks, pushing them to enhance their own app designs. To compete with neobanks, traditional banks have now begun to apply user-centric design to their apps, making them more appealing, easier to use and improving the overall user experience.

This innovation in the banking app landscape covers the user experience, end-to-end, including improvements in terms of product offerings, user interfaces, user interaction and communication.

There are three main areas where banks are learning from neobanks:

1. Customizable and tailored interfaces

   Neobanks have introduced new flexibility in banking apps, offering tailored and customizable user interfaces that enhance the user experience.

   • Users can personalize their dashboards by choosing and reordering their favorite features (e.g., budgeting tools, savings pots, or transaction history), getting quicker access to the ones they use the most.
   • Following the neobanks’ lead, customizable home screens can now be found on some traditional banks apps as well, allowing users to decide which financial tools and services are displayed first.
   • In some banking apps, customization applies not only on the dashboard view, but also to the entire interface.

2. Intuitive finance management features

   From seamless onboarding to instant transfers, neobanks have revolutionized the way users manage their finances.

   People now have more control of their finances through things like:

   • Process trackers (for service requests and card delivery) which ensure apps are compliant and perform as expected.
   • Though Public Financial Management (PFM) inititatives, designed to improve how public money is used, neobanks are offering in-app suggestions and dashboards enriched with insights and featuring interactive and visually appealing charts and graphics.
   • Parent-controlled budgeting features allow parents to observe and monitor the financial lives of their children.
   • Budgeting tools and wallets allow users to better manage their finances at the touch of a button.
   • Other non-traditional perks like subscriptions management (letting you manage all your subscriptions in one place), deals with local businesses, travel insurance and travel-related rewards.

3. Clear and transparent communication

   People want their banking apps to be clear, intuitive and easy to use – with processes kept as simple as possible. Neobanks are achieving this through:

   • Conversational language, featuring emojis and simple and clear copy, making apps easy to use and understand.
   • Tool tips and jargon vocabulary, helping users to understand banking terminology.
   • Contextual alerts and banners, for example, to warn users in real-time about potential fraud and suspicious activity.
   • Clear, concise and contextual communication around long processes (when not possible to shorten them because of regulation and compliance), guiding users through each step.
   • Positive friction, introducing small obstacles or hurdles in the user flow, to prevent impulsive or harmful actions and promote thoughtful decision-making, but also with clear communication to explain these sometimes repetitive and invasive security features – why they’re in place, how they work, and what the benefit is for the user.

Neobanks are making processes easier and more user-focused

By following the user-centered approach introduced and led by neobanks, traditional banks can offer more user-friendly and engaging products on their mobile apps, reinforcing their customers’ trust and making customer retention more likely.

Through the integration of faster and more seamless processes (e.g. instant identity verification and shorter onboarding processes), customizable interfaces, and clear communication, traditional banks can strengthen the balance between the usability and security of their apps, and better compete with their more agile digital rivals.