How can you apply behavioral economics to fintech user experience?

1 Nudge users to act

One of the main challenges of fintech user experience is to motivate users to take action, such as signing up, completing a transaction, or setting a goal. To do this, you can use nudges, which are subtle cues or incentives that guide users towards a desired outcome, without forcing or coercing them. For example, you can use social proof, such as testimonials, ratings, or reviews, to show users how others have benefited from your service. You can also use scarcity, such as limited time offers or discounts, to create a sense of urgency and FOMO (fear of missing out). Another way to nudge users is to use defaults, such as pre-selected options or settings, that make it easier for users to choose the optimal or recommended choice.

2 Simplify choices and information

Another challenge of fintech user experience is to help users make informed and rational choices, especially when they are faced with complex or overwhelming information. To do this, you can use simplification, which is the process of reducing cognitive load and eliminating distractions. For example, you can use chunking, which is the technique of breaking down information into smaller and manageable units, such as categories, steps, or stages. You can also use filtering, which is the technique of showing only the most relevant or important information, based on user preferences, goals, or context. Another way to simplify choices and information is to use visual aids, such as icons, graphs, charts, or colors, that make it easier for users to understand and compare data.

3 Reward users for progress

A third challenge of fintech user experience is to keep users engaged and loyal, especially when they are pursuing long-term or difficult goals, such as saving for retirement or paying off debt. To do this, you can use rewards, which are positive feedback or incentives that reinforce users' behavior and motivation. For example, you can use gamification, which is the application of game elements, such as points, badges, levels, or leaderboards, to make the user experience more fun and competitive. You can also use personalization, which is the customization of the user experience based on user data, behavior, or preferences, to make it more relevant and tailored. Another way to reward users is to use milestones, which are intermediate or sub-goals that mark users' progress and achievements.

4 Build trust and credibility

A fourth challenge of fintech user experience is to establish trust and credibility, especially when users are sharing sensitive or personal information, such as bank details, identity, or income. To do this, you can use transparency, which is the practice of being clear and honest about your service, policies, fees, or risks. For example, you can use security features, such as encryption, authentication, or verification, to protect users' data and privacy. You can also use testimonials, ratings, or reviews, to show users how others have trusted and valued your service. Another way to build trust and credibility is to use authority, which is the display of expertise, credentials, or endorsements, that show users that you are reliable and reputable.

5 Leverage social influence

A fifth challenge of fintech user experience is to influence users' behavior and attitudes, especially when they are influenced by social norms, expectations, or pressures. To do this, you can use social influence, which is the phenomenon of how people's actions and opinions are affected by others. For example, you can use social proof, such as testimonials, ratings, or reviews, to show users how others have used and benefited from your service. You can also use social comparison, which is the technique of showing users how they perform or rank compared to others, to motivate them to improve or conform. Another way to leverage social influence is to use social sharing, which is the feature of allowing users to share their goals, achievements, or feedback with others, to increase their engagement and advocacy.

6 Avoid biases and errors

A sixth challenge of fintech user experience is to prevent users from making mistakes or errors, especially when they are affected by cognitive biases or heuristics. These are mental shortcuts or rules of thumb that people use to simplify decision making, but sometimes lead to irrational or suboptimal outcomes. For example, you can avoid the confirmation bias, which is the tendency to seek or interpret information that confirms one's beliefs or assumptions, by providing objective and balanced information. You can also avoid the loss aversion bias, which is the tendency to prefer avoiding losses over acquiring gains, by framing your service as a gain or benefit, rather than a loss or cost. Another way to avoid biases and errors is to use feedback, which is the provision of timely and constructive information that helps users correct or improve their behavior.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?