Payment Modernization Strategies for Mid-Sized Banks: Preparing for 2025 and Beyond
Financial service technology has been showing its age, especially in the US. In an attempt to adapt, banks have been shoehorning new products into a world of disconnect, compromising on basic design principles, and eventually moving far from user-centered design.
In our quest to reimagine the payment game, we've found inspiration in some unexpected places - think FedEx, Uber, or DoorDash. The message is clear: there's a world beyond the status quo, and the key theme with all of them is making it simple for their customers!
So, what's Finzly's take on simplicity?
Better design - at every touchpoint, driven by passion and perspective. At Finzly, we've embraced a simple philosophy - design should be free because it is intrinsic! Quality, when woven into the process, becomes second nature. Design, for us, isn't an afterthought; it's part and parcel of our product development journey. We believe in First Principles, questioning what we think we know, and that's how we integrate design into everything we do.
When it comes to simplicity, it is never an accident; it's a deliberate design choice. Our team of creators take simplification seriously. Making the simple complicated is commonplace; making the complicated simple is creativity.
Simplicity sells
For those skeptics questioning the return on investment (ROI) of introducing simplicity, the answer lies in the evidence. Finzly's customers, who provide an experience that their customers love, are positioning themselves as true differentiators. They are seeing outstanding results in new customer acquisition and are delighting their customers with value-added services effortlessly.
Simplicity differentiates
Banks can no longer win with homogenization. Convergence in most product offerings makes them look similar, akin to cereal or tinned tomatoes on a supermarket shelf. Most bank accounts and payment offerings are identical due to similar legacy impediments at the backend. More peas in a pod means commoditization, where there is no room for art or aesthetics. In other words, it's the absence of innovative design and a lost opportunity to differentiate.
Even though commoditization is the plague of financial services, many bank leaders sadly don't see it coming and fall into the commodity trap. A classic example is turning on receiving instant payments with batch-based technology. While this approach can only offer commoditized services, several banks have succumbed to commoditization, hamstrung without allowing their customers to send instant payments. Simplicity in experience contributes to differentiation by creating a positive, user-friendly, and efficient environment that sets a business apart from competitors.
Simplicity offers experience
The industry loves running polls and surveys, trying to crack the code of customer needs in payments. But let's keep it real — your customers aren't asking for a laundry list of payment jargon; all they want is quick and easy payments. They're after experiences, not a convoluted network of payment rails and the tech intricacies that come with them. Why then do banks persist in building separate solutions for each rail, subjecting their customers to the constraints of a lack of interoperability between systems?
Here is where our design principles come into play in favor of the customer experience. With Finzly's solution, we provide a seamless payment experience for end customers who want to make a payment without worrying about the specifics of the modalities. Financial institutions using Finzly can offer a unified experience across all their payment rails and treat instant payments as just that — instant payments — rather than being tied to the FedNow or RTP rails behind them. Our design takes care of the rest!
It's time to look beyond the status quo!
In any industry, creating innovative products requires not just expertise but also passion and perspective. Succumbing to the status quo won't lead to the delivery of superior products or services, a truth we've witnessed repeatedly in financial services. Banks often settle for what their core providers offer, whether it's payment hub solutions or digital banking solutions, inadvertently limiting their ability to see the broader spectrum of innovation. This not only decreases efficiency but also increases technical debt, slowing down further innovation.
In other cases where new technologies are layered onto existing frameworks using layers of middleware, the result may be a convoluted and complex hybrid system that is challenging to manage and maintain. This complexity not only hinders efficiency but also undermines the potential gains promised by the new technologies, defeating the very purpose of their implementation.
It's now time to look beyond the status quo, towards superior design that will be responsible for the simplicity leading to a great customer experience and innovation. Ultimately, simplicity is about people's perceptions, not just about what your bank claims relative to its previous offerings. It's a philosophy that we hold close at Finzly, and we're committed to breaking free from the constraints of the past to create a future that thrives on simplicity and innovation.
