When you use an app to organise and manage finances, you expect exceptional performance and easy access to your data, right? It’s important to everybody. We can’t say if it’s the key to happiness or the root of all evil, but your money matters.
While the functionality of a mobile app is of utmost importance - the ability to get from point A to point B - consumers have become accustomed to great UX (user experience) design, too. Great functionality but poor UX design will leave you high and dry. The experience of using an app should be seamless and enjoyable, even in the world of finance.
A great quote from a tech blogger named Emil Lamprecht describes UX in relation to other aspects of a digital product: “If you imagine a product as the human body, the bones represent the code that gives it structure. The organs represent the UX design, measuring and optimising against input for supporting life functions. And the cosmetics of the body represent the UI (user interface) design, how it’s presented and reacted to.”
For consumer-facing financial apps, UX hinges on one key factor that might not be readily known: democratisation of bank data. So, what’s happening on the back end that enables performance for finance apps? It’s the open financial web at work.
What do we mean by data democratisation?
In our world, data democratisation means letting consumers easily and freely access their financial data through any third-party application they want. This is the idea of user-permissioned access to to data, and it’s a crucial practice in the open financial web - the newest era of banking and money management.
The open financial web operates as a pub-hub-sub model. The goal of the model is for financial data to move efficiently and securely between banks (the publisher of the data), the data aggregator (the hub for the data) and third-party apps (the subscriber to the data).
Currently, banks still passively allow data aggregators to access data for apps on behalf of account owners. This approach works well enough, but the entire process can be improved. In order to enable a new ecosystem, banks should actively participate in the development and adoption of standardised, data API solutions.
Why is a standard needed?
Sharing data is still a relatively new concept in our current digital age, and there is a continuing influx of technology that requires transaction data to help consumers manage their money. Prior to the open financial web and hub-pub-sub model we’ve already mentioned, banks took a “walled garden” approach to their customers’ financial data. There wasn’t a need to disseminate data so frequently, so it was used internally to gain understanding of where customers were taking their business for other financial services, such as loans.
In the consumer’s mind - especially in the moment of using a third-party app - ease of use and functionality is the most immediate priority. However, let’s not sacrifice anything else, including security. The implementation of a data sharing standard addresses all pertinent needs. Right now, banks have two options to which they can turn: OFX 2.2 or the Durable Data API (DDA). Both are tokenised authentication services that allow users’ data to move throughout the pub-hub-sub model without their identity being known or taken advantage of.
Where does better UX come into play?
In the open financial web, data democratisation allows for consumers to have a better user experience with their finance apps. Easing front-end user friction is critical. Users, especially younger millennials, will stay with banks that give them more options and integrate with more apps. It’s not so much about the present as it is about the future. Millennials are already using banks less often than generational predecessors, but it won’t be too long before they have the spending and investing power of their parents.
UX will improve once user-permissioned bank data finds its way into the hands of app developers and fintech leaders who can provide a superior level of service than banks have been able to in the past. In order to democratise their data and improve UX for consumers, financial institutions must adopt current API and authentication standards to enable developers to create a seamless interface for users.
The open financial web is working together to offer more responsible service all around. Consumers can look forward to a new and improved era of banking and finance apps. While it may be difficult to see from the outside looking in, the changes are happening.
Steve Smith, CEO, Finicity
Image source: Shutterstock/31moonlight31