History has taught us that organizations are better equipped in the marketplace when they focus on their core competency. Banks have historically focused on providing checking and savings account products, credit and lending services, and everything else in between. Today, core banking products are getting more and more difficult to differentiate from bank to bank. At the same time, customers’ expectations have shifted. Savvy customers want to choose how they engage and communicate with their financial services providers. Engagement expectations are quickly rising and are influencing how banks must go to market with their service and product offerings. With a wide assortment of channels being utilized for communication with customers, how do banks stay current and innovative in a technology landscape that is constantly evolving?
Some banks have hired user experience (UX) professional services to help delineate their service offering via the implementation of new user interfaces, unique and interactive mobile applications, and digital tools to help simplify banking tasks for their patrons. UX firms have come into the fold offering organizations unique perspectives and digital strategies to cater specifically to ever-changing financial services customer needs.
Other financial institutions, like Capital One and BBVA Compass, have taken a very different approach. Rather than contracting the services of a UX firm, they have acquired the UX firm. Capital One recently acquired two UX companies, Monsoon and Adaptive Path. These acquisitions were made to improve its product design capabilities and to help re-invent banking for the digital, mobile age. BBVA Compass acquired Spring Studio, neobank Simple, and Madiva Soluciones to improve the look and feel of its digital banking services. But will these acquisitions truly provide the type of differentiation needed to grow customer loyalty?
There are several benefits to bringing UX design in-house, but Capital One and BBVA Compass might be surprised to find that acquiring a competency a bank doesn’t have experience in might actually backfire. When Capital One engaged with Monsoon and Adaptive Path prior to acquisition, they were receiving services from an organization working across multiple banks and industries. Monsoon and Adaptive Path brought unique and modern UX concepts to Capital One from their experiences working with not only banks like Wells Fargo but other organizations outside of the industry like the NBA, Yammer, and Zazzle. The moment Monsoon and Adaptive Path get acquired, their sole focus becomes on improving the user experience at Capital One and may prevent their UX team from staying up to speed on those cutting edge cross-market digital best practices being employed by top companies.
If the premise of acquiring a small company into a large organization is to introduce an entrepreneurial environment into a well-established, rules-driven organization – caution should be taken. Although acquiring a small company could help reinvigorate a larger organization in the best case scenario, often times big companies have an established culture and process that does not necessarily mesh well with a smaller design company. Creative minds working for an agency like Monsoon or Adaptive Path may likely not fit into the monolithic culture of a bank. With rigid rules and processes, creative agency employees might be stifled for creativity.
So, do you acquire or do you hire a UX firm to create a unique digital solution for your bank? Our vote is to hire a firm to assist you with developing and implementing a unique digital strategy. If you are a bank or credit union in need of differentiating yourself amongst your peers, look outside to firms that bring a broad, fresh perspective to the table. Sometimes outside perspective is just what is needed as a financial institution seeks to grow and differentiate itself in the “sea of sameness.”
Alina Moore is a manager in West Monroe Partners’ Customer Experience Digital Practice based in Seattle and Jordan Sternlieb is a leader in the Banking and Credit Unions Practice based in Los Angeles. For more information on digital strategy and design in financial services and differentiating from the “sea of sameness,” please contact them directly at firstname.lastname@example.org or email@example.com.