Thread by @dharmeshba

Are human emotions neglected in fintech?

Designing trustworthy digital financial services for India. A 🧵

Small finance banks had recently opened branches in Erode(TN) and offered attractive interest rates compared to big banks. Dad decided to move some money to one of them. After enquiring with multiple banks, he picked a bank that did not have the highest interest rate.

Dad's rationale:
'Most of the bank branch managers were in casual attire wearing a checked shirt and pant. They all look like grocery store owners, just like me, but the bank I chose has a branch manager who wears a coat suit 🕴️ in branch. I am going to trust my money with him.'

Trust acts in strange ways, especially when it comes to money. In India, financial services are predominantly distributed through interpersonal relationships.

If you are a part of a privileged middle-class household, you would know

- A family accountant who advises you on mutual funds.
- A distant relative who sells LIC insurance as passive income.
- A bank branch manager who could get you an education loan.

These individuals are the trust enablers and play a massive role in adopting various financial products in Indian society. Emotions play a huge role in financial services as they signal progress or distress in our lives.

While designing digital financial services (DFS), we eliminate this interpersonal relationship and convert them into a faceless transaction. For example, the UPI app does not differentiate between the payment made for a coffee and payment made during a medical emergency.

A transaction failure has severe consequences in the medical emergency context.

But tech doesn't care?! Does it?

How do we build trustworthy financial services?
In his most infamous book, 'Emotional Design', Don Norman talks about three levels of processing information.
- Visceral
- Behavioural
- Reflective

Each of the three levels plays an essential part in shaping our experience.

Visceral:
The visceral level refers to how a product looks visually and has an emphasis on aesthetics. Visceral responses are fast, subconscious and are about immediate perception. At this level, style matters and has nothing to do with how usable the product is.

Behavioural:
The behavioural level is the home of learned skills. At this level, we are usually aware of the actions but unaware of the details. The activities at this level happen from muscle memory and are subconscious. At this level, the functioning of the product is the focus

Reflective:
The reflective level is the home of conscious actions. Reflection is cognitive, deep and slow and happens after the events have occurred. We look back at them and associate blame or responsibility.

Design must take place on all three levels. Reflective responses are a part of eventful memories. It is a reflection that drives us to recommend a product to others or perhaps to avoid it. Reflective memories are often more important than reality.

Fintechs focus primarily on the visceral and behavioural level of Design but not consciously designed for the reflective level. One could witness this in the product positioning of DFS, which primarily revolves around cashback, interest rates, discounts etc.

This kind of product positioning, along with UI and UX, could be a great way to acquire customers but might not be sufficient to build long-term loyalty. Unless people have emotionally invested in the product, the cost of switching to a new brand would be better utility features.

Below is a short comparison of why fintech prefers investing resources and effort in the visceral and behavioural level of Design instead of reflective Design.

Unless people have emotionally invested in the product, the cost of switching to a new brand would be better utility features like higher cashbacks. Even when people stick around with the product, they are less likely to try out the adjacent financial offerings.

Our current way of designing DFS might not lead to our intended outcome. Understanding cultural context and emotions are crucial to building long term relationships.

I hope there comes a day where the UPI network prioritises a health emergency payment over a coffee transaction, ensuring a successful transaction for the person in distress.

Fin!

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