Posted: November 8th, 2023
Financial institutions are experiencing a technological transformation with the recent surge in millennials using smartphones to conduct their everyday transactions. Mobile applications have become a strategic avenue for inspiring specific consumer behaviours and habits. One such key behavioural change entails savings. According to the Financial Times, seventy-two percent of adults in the United States and the United Kingdom will manage their current savings account through their phones by 2023 (Croxford, 2018). The statistics outline the growing opportunity for open banking, which our proposed savings application seeks to tap into. The millennial generation is highly open to this technology due to increasing daily costs with stagnant salaries.
Aim of the Proposed Technology
The main objective of the proposed app is to curb bad money habits amongst millennials. The younger generation is caught between the dilemma of not being able to save and failing to save (Croxford, 2018). Through internal measures, the proposed application will inform users of the credit limit when they engage in emotional shopping, take on high-interest debt, gamble, or make unnecessary payments, such as lottery tickets. The proposed technology also informs on expenditures that the user does not need. For instance, the user will receive a notification when they make minimum credit card payments, resulting in high transaction fees and interests.
Main Functions of the Technology
During the coronavirus pandemic, there were hundreds if not thousands of social media posts of people documenting their struggles with household finances. Going through the various posts with class peers, we thought of the random idea to design and develop a mobile application specifically meant to serve millennials and their savings requirements. The proposed technology calculates the best way the user should be spending his or her money on daily expenses. The technology contains metrics that help the user save cash based on the money they spend. Unlike traditional applications that focus on monthly salaries, the proposed technology is behaviour based. Therefore, it tracks user expenditures to highlight how much a person should save or reduce their spending.
Brief Analysis of the Target Market
The primary market for the proposed app is the millennial generation (Gen Z), with generation X coming second. The group refers to individuals below the age of twenty-five. Gen Z has the highest rate of mobile application usage, with each user spending an average of 4.1 hours monthly on open banking platforms (Mueller & Perreault, 2021). Gen Z has shown an aptitude and enthusiasm for adopting mobile devices to access service-oriented businesses. For instance, a study by the Bank of America finds that eighty-two percent of millennials have some money set aside online for retirement. In comparison, Gen X stands at seventy-seven percent (Mueller & Perreault, 2021). Men are the main targets within the selected market as they spend more than women.
The complexities of current Financial Technologies (FinTech) are changing conventional online financial services. Sadrine et al. (2019) chronologically cover the evolution of open banking to highlight how traditional applications, such as Paypal, Chime and Personal Capital, focused on the Human-Computer Interaction (HCI) as the primary persuasion point. The approach offered less in consumer retention and access to auxiliary financial services. Partala and Saari (2015) investigated user experiences to highlight another design gap in traditional mobile applications. The research indicates the earliest users of open banking adopted the technology for making debt payments and accessing capital markets. As a result, the applications did little to create long term consumer loyalty. A gap the project sought to address.
A large part of how the proposed financial technology works can be traced back to the diffusion theory. Diffusion, or the process through which innovation is communicated, entails an innovation, communication channels and social system (Barnett & Vishwanath, 2017). All three elements must be present for innovation to attain an S-curve (critical mass). With the internet and social media, Gen Z is already pushing for the increased adoption of open banking services. The internet has caused a change in consumer purchasing behaviours, as Gen Z are mostly using fintech to pay for food, health, entertainment and debt (Sozer, 2019). Gen Z will push fintech to achieve its critical mass in the consumer market due to the increased use of open banking.
The proposed technology is different from other open banking platforms in the market because it extends its personalization and targeted promotions. According to Tunsakul (2020), one of the hidden drivers of persuasion in open banking is positive user experiences. Traditional fintech focused on neutral user experiences to protect the bank’s brand. The proposed technology uses the static criteria of credibility, privacy, personalization and attractiveness to create positive user experiences. Verkasalo et al. (2012) advocate for smartphone applications to include personalization as an interface feature to enhance user satisfaction. The proposed technology goes beyond Verkasolo’s claim, as it allows the user to control all features associated with the balance report, including spending limits. The inclusion of financial tips was another way for the application to create positive user experiences.
User experience is not the sole persuasion point in the designed financial mobile application. Mueller and Perreault’s (2021) study highlighted solicitation and commitment as two critical dynamic criteria for persuasion in online applications. Our money app contains features that influence user behaviour to ensure repeated use. For instance, offering congratulatory messages when savings targets are hit or progress status reports create consumer commitment. Notifications help create ascendancy, resulting in the user saving more money. The vocabulary, images and pictures reinforce user interaction with the system. Overall, the system design of the proposed app contains sufficient persuasive aspects to ensure consumer behaviour changes related to savings.
Description of PT Design Development
The design process was highly iterative. The development journey followed Pockett’s basic four-stage research, define, prototype, and test (Deininger et al. 2017). Before designing the application, the project required a comprehensive understanding of Gen Z, specifically their money issues. The research covered the average amount of money saved, percentage of millennials overspending and percentage adoption of existing financial management applications. The findings provided the detailed needs and pain points of Gen Z consumers. At first, the project had to design three potential user personas to brainstorm potential page layouts and features. Subsequently, user flow was designed to identify dedicated features.
With an understanding of the type of features and personalities to consider, system development moved to system planning. We interviewed potential users to establish which areas they would forfeit to save money. Interviews are effective for determining the hierarchy of services to be accessed on the home page (Partala & Saari, 2015). For instance, in the designed app, food comes before travel because it is the main field users claimed they would not abandon to save money. The main expenditures are more noticeable to prevent spending. User testing and validation followed to determine the usability of the new system. The main goal of testing was to ensure the final product was friendly, casual and straightforward.
The initial tests led to the discovery of an accessibility issue. The project team had to redesign the page layouts to establish a suitable visual hierarchy. The original palette design had poor contrast, spacing and scaling. A change in colour and a modification of images improved the visual hierarchy and accessibility. Second and third usability tests were conducted to collect as much feedback as possible. Each test brought a new perspective on user objectives, resulting in changes in the information architecture.
Fig.1 Changes in palette colour to lighter brown with capital letter for scalability
The Proposed Persuasive Technology and Its Main Functions
The design concept of the banking app does not focus on financial management but rather the provision of a platform that empowers users with a saving culture. The primary function is to allow users to save money with ease. The user provides personal details during registration, including monthly income and savings targets. The proposed application uses this information alongside recent transactions to provide graphical reports that outline how well the user performs.
Fig.2 User balance sheet and progress status report
A secondary function is to provide the user with consistent motivation. The consumer can access this requirement through consistent progress reports. The proposed application also has a social page where users can interact and share their experiences with saving. As aforementioned, the social system is a key component of the diffusion theory (Barnett & Vishwanath, 2017). The group believed that having a social page would play a big role in ascertaining customer retention and motivation (see fig. 3 below).
Fig. 3 Social page for user interactions and motivations
The last function is to enhance Gen Z’s financial literacy. While the younger generation saves more than its predecessor, the trend does not imply Gen Z is financially literate. The consumer group consistently ranks first in using mobile devices for food and other household deliveries (Mueller & Perreault, 2021). The proposed technology has a ‘TIPS’ page that informs how to best track personal spending, separate wants from needs and lower average household expenditure. Increasing consumer awareness was another way to motivate consumers to develop financial self-discipline.
Fig. 4 Tips page for user financial literacy
Lessons from the Project
Throughout the mobile app development project, it is safe to say I have picked up several learning points about millennials and system development. First and foremost, there is no going around the iterative development aspect. Guthrie et al. (2018) state that iteration is a critical aspect of the software development lifecycle because it fragments the project, allowing for simpler implementation. The project had to repeat the market research and usability tests to ensure all necessary features were present and unnecessary ones removed. It is highly challenging for an application to offer long-lasting positive user experiences without being iterative.
The discovery of the accessibility issue taught that usability tests have to be conducted at the very early stages of software development. Usability is not a feature a developer can craft within one design phase (Lewrick et al. 2018). Early testing results in far less work, in the long run, benefiting the project with reduced implementation costs. One individual learning point was user testing creates an ample environment for honest criticism. Without the paper prototypes, the team would not have seen it necessary to conduct user interviews to better understand user requirements. Overall, user testing is one of the most effective ways to identify the features most important to consumers.
To differentiate the open banking app from existing fintech, we realised that system design should not always be user-centred. In retrospect, the proposed project seeks to create a savings culture by modifying user behaviour. Such a purpose mandated the consideration of external factors, such as the influence of online communities and progress status reports. The features do not primarily add to the app’s functionalities, but they play a big role in improving user satisfaction. A user-centred approach can limit the developer’s vision. Considering all potential factors that touch on the user experience is the only way to ensure the development of a responsive and satisfactory web design.
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Croxford, R. (2018, May 5). Millennials and the smartphone savings revolution. Financial Times, https://www.ft.com/savingapps
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Verkasalo, H., Lopez-Nicols, C., Molina-Castillo, F. J., & Bouwman, H. (2012). Analysis of users and non-users of smartphone applications. Telematics and Informatics, 27, 3, 242-255.
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