May 29, 2024
In this Q&A with Valtech consultant Amar Limaye, we explore why focusing on customer needs is the key to digital transformation success in the modern financial services landscape.
What does service design thinking mean to you?
Amar: As an innovation strategist, I am always looking for new ways to serve a user's needs. In highly competitive industries such as financial services, it’s usually quality of service that differentiates you from a competitor. Service design thinking is a way to map, across multiple layers including colleague experience and the supporting technologies, how you plan to serve your customer.
Why do you think it's so front-and-center at the moment in relation to financial services? Why does this type of design meet leaders’ current needs?
Amar: Increasingly, customer experience professionals in financial services are realizing that they're competing with a customer's last best experience — and that's not always a financial services competitor. It could be another app that they've used recently, like Spotify, or Uber, or even the native apps that Apple and Google now provide, like Apple Pay and Google Wallet. Those services are so successful because they've been created on the back of philosophies such as service design mapping and jobs-to-be-done.
Classically, that's not how a financial services journey would be created. You'd traditionally start by defining the specific financial product, and then thinking about how to deliver it to the customer. In that scenario, the priority is less about customer service and more about making sure that the service is financially viable and matches the product provided by a competitor.
But now, with the rise of fintech challenges and easier ways to open a bank account, leaders are realizing the way to compete with their competitors is in customer experience. Customers are going through financial journeys in more places than ever, and if you want to keep them within your ecosystem, you're going to have to compete with their last best digital experiences.
You use the term “jobs-to-be-done.” Can you explain how that type of thinking is driving transformation or development?
Amar: Jobs-to-be-done is a way to say, right, when a customer leaves our app, what's the next service that they consume? And how can we provide that within our own ecosystem so that they're not leaving our app?
So, a really obvious one is adding an insurance product to a financial services product. For example, a bank might have realized, right, a customer has checked their bank balance, and then they're going on holiday. So, they might open a dollar account when they're going to the US, and then they leave our app to go and buy insurance. So, why don't we provide that insurance product, and then they have less reason to leave the app.
And if we use service design, we can make sure the experience is seamless, attractive and obvious so that they don't even bother checking the latest price comparison website.
Is service design thinking promoting more user-centric design? Is that a trend that we're seeing across financial services?
Amar: Absolutely. You can't do service design in isolation, because then it's just a mapping exercise. You still need other disciplines, such as product thinking, which is key in helping you get from A to B whilst focusing on the user.
So, service design is a communications device, which is why so many service designers I work with have fantastic UX skills, and why I, as a strategy consultant, can't do justice to service design. Whilst I may be able to do a value-stream map, where I can plot different points in a journey and the flow through it, a service designer knows how to turn that journey into something that's aesthetically pleasing, that makes sense, and can be tailored to be relevant to many audiences. A service designer will know not only how to draw it out, but also make it very repeatable and usable.
Can you provide any examples of really good service design thinking applied in financial services, either something we've done or something you've seen in the market that you think really embodies that ethos?
Amar: We've helped retail banks design complimentary services for their accounts. And that might be things like the example I gave earlier about an insurance product. Or it might also be alternative services, like being able to purchase travel tickets or an e-sim.
When you're in the early stages of discovery, you might not have a designer yet because you don't know what to design. But a service designer would have the skills to carry out the preliminary research on the experiences that a user goes through.
Once that's mapped, a designer can come in and create a product that is differentiated from what is out there in the market. So, having a service designer in the team early on, even before you do sketches or go out to the market and test ideas, is really, really powerful.
What’s the difference between value-stream mapping (VSM) and service design?
Amar: I think a lot of people confuse VSM with service design mapping. So, for example, they might create a value stream to work out how value is being moved through a chain. But a value stream in isolation doesn't consider the user. It comes from manufacturing, so it's more concerned with: how do we reduce waste? How do we reduce delays? How do we reduce pain on the journey?
If you add the service design layers on top of it, now you're thinking about user journey. For example, say I have to send an email each time I need to do an activity. In a value-stream map, that might not be a big deal, because it’s a 10-second task within a 10-hour map.
But a service design point of view captures my frustration, which is: “Why do I have to open my inbox, context-switch, and move from one platform to another in order to send an email? If only I could automate it.”
What are some practical steps a financial services leader can take in order to shift towards implementing this service design thinking?
Amar: I think that goes back to understanding how your organization creates products to satisfy user needs today.
Traditionally, in big financial services organizations, the UX team will be siloed in its own pocket to serve many different departments. The smaller fintechs will often be much more integrated, with a product squad that has a service designer or a UX designer within the squad itself, and they live with the whole product development process. Whereas in a larger company, it's often a shared service.
So, if I wanted to implement service design in my big retail banking organization, which has this traditional way of thinking, the first thing I do is find a way to integrate the service design function into the places where products are being developed.
It’s the same with data. Where classically you have a data function in a product, the data team will be consulted near the end to help measure whether it's successful or not. But really, they should be part of the whole development lifecycle.
So, they're helping us to start to figure out why we're creating that product in the first place, they're making sure we're capturing the right data in the right touchpoints and then using that data to check if it's actually a success.
I would put service designers in those same points, as well. You need to break down that barrier and include them in the development of the product.
What's the biggest challenge you've experienced around service design?
Amar: When you have loads of complex financial services products, I think it's slightly overwhelming to ask, what is the service, really? Just defining the service itself is a huge mindset shift.
When you're providing a product, let's say Uber as a service, you call a car, the car arrives, you sit in the car, and then you get to the destination and you get out. It's very easy to scope that as an end-to-end.
But with a financial product, it's very hard to understand where your service map starts and stops. You open an account, you put money in the account, but that's not where the user leaves their financial journey. You're then consuming financial services with your bank for hopefully, many, many, many years, constantly. And along that journey, you're looking to buy insurance, you're looking to get a loan, a mortgage, etc.
So, what I try and do is help leaders realize that you have journeys within journeys. Setting a taxonomy for what a journey is and what a product is, that’s understood throughout the organization, is the key to success.
I love the idea of service design removing pain from people's lives. There's a real greater good element to service design that I think makes it really compelling as an idea! Fantastic.
Amar: I often do Operating Model Transformation work. Often, service design isn’t actually in scope. But we do a service design map anyway. And it is really, really useful because we are able to understand the cultural side of things, which is: as an individual, when I do an activity, how do I feel? And what are my personal frustrations with this?
It's really hard to capture that if you don't have a designer who knows how to map these complex feelings out and communicate them in an aesthetically pleasing way. You can’t just make an Excel spreadsheet to record pain points! When you have it on a map, when you're talking to an executive you can communicate why you're doing a certain thing, even if it doesn't serve explicit business value or it's not immediately going to save costs. You can say: “Right, this is a place on the map that’s causing pain for your work colleagues where there doesn't need to be. And this is how we can solve it.”
Service design is a way you can serve both your colleagues and customers better.
