The Impact of Design Thinking in Banking



For the longest time, the banking industry refused to acknowledge the human factor when developing its products and services. However, the forced rethinking of the entire banking structure and surge in mobile banking has forced several financial institutions to understand its importance. A lot of them are adopting the use of proven business strategies that foster innovation and creativity. This is where Design Thinking in banking comes in.

The banking industry is in a state of upheaval. Ever-increasing competition from FinTechs, shifting global banking and financial regulations and tech giants like Apple and Google entering the finance space is forcing conventional banking firms to rethink their business models. Moreover, with the coronavirus and the lockdown, banking sector had to reshape to adapt to changing consumer needs.

Design Thinking in banking

The coronavirus pandemic accelerated digital transformations in the banking industry and even forced rural users to join the digital banking bandwagon. Banks have scaled up their technologies to adapt to the current times so that their operations can be adjusted for better efficiency.

It has been mistakenly assumed that design thinking is only about aesthetics – a philosophy that is simply limited to people who are creative, who specialize in design. However, that isn’t the case. It is true that aesthetics cannot be ignored; but an appealing design that doesn’t do anything for customer needs or doesn’t solve consumer problems is not going to be successful. In the words of Apple co-founder, Steve Jobs, “Design is not just what it looks like and feels like. Design is how it works.”

In the broader sense, design thinking is the application of design principles in a way that mimics the way people interact with the world. It doesn’t solely focus on aesthetics. Moreover, it is an iterative process where you attempt to understand the user, redefine the obstacles and challenge the assumptions to identify different solutions.

Design thinking is a great way to find problems that may not be apparent using traditional methods. It revolves around the development of a deeper interest in comprehending users of the products and services. This results in the development of empathy for the target audience. 

The methodology followed in the past:

This used to be the complete opposite in the banking industry. Banking industry used to focuse on creating products based on their operational efficiencies and internal processes, with little to no focus on the customers. And they would wonder why customers aren’t happy and show frustration with their products/services!

For instance, a banking app that doesn’t allow customers to open an account online, but they have to visit the branch. This process does not meet the needs of the users or address their problems. In theory, design thinking can solve this problem.

Today, the major players in the banking and financial sector are transitioning inside and out to place consumers’ needs ahead of their business. You’ll find design thinking at the forefront of it all.

Role of Design Thinking in Banking

1. Empathizing with digital banking users

A large amount of data about customer needs and pain points, business goals, and product features are collected at the empathize stage. Comprehensive research can help gather knowledge about user behavior and find ways to improve the onboarding experience for new users. Also, empathizing is crucial to find out if the digital banking journey is frustrating at any stage.

2. Defining core value and user problems 

The research from the empathize stage can help observe existing issues from the standpoint of the users. When stating the needs of the users, you can also highlight opportunities for innovation. By laying down all the observations and data from the research above, you can identify unmet needs or common pain points.

3. Ideating online banking solutions 

After identifying the pain points and unmet consumer needs, the next stage is to brainstorm and collate a wide range of creative ideas that will address those expectations or needs. At this stage, all the team members come together to share notions, ideate, and build on each other’s ideas.

4. Prototyping digital banking product 

The goal of prototyping digital banking products is to find out which part of the ideas work. You have to weigh the impact of your ideas against their feasibility through feedback. Also, the concept can change based on feedback and the protype can update accordingly.

5. Testing banking prototype 

At this stage, you have to put the prototype in the hands of your target audience. You have to see if your product meets the needs of the users and solves the problems that they were facing. Also, do not shy away from gathering feedback and continuously making improvements to your product.

Design thinking in banking determining success in today’s digital age

Design thinking and design is playing an influential role in determining the success of business in any industry (including banking) and according to Stephen Gates, the head of Citi Design, Citi Bank, “There is no greater Trojan horse to change an organization than design thinking.” This fact is also supported by the DVI (Design Value Index) which is a summary of the market performance of fifteen design-driven companies including SAP, Nike, IBM, and Apple.

The banking industry has experienced a period of disruption owing to technological advances and a shift to design thinking. Let’s talk about Citi Bank. The banking giant that has gone all-in to explore design thinking; with their efforts to make each customer interaction stronger.

Citi launched its FinTech unit in October 2015 to act like a startup inside a bank that is dedicated to mobile-first solutions for its banking customers. The bank even signed a deal with a design consultant, Ideo, to train Citi employees on design thinking. Design thinking permits everyone to participate and come into the process. The company considers this a massive transformation that has helped them move forward and creativity isn’t just a department anymore. From Citi’s mobile app to the introduction of new products and services; everything revolves around ensuring a smooth with customer experience.

Even the Deutsche Bank is utilizing design thinking to achieve customer proximity.

How can Banks overcome challenges associated with Design Thinking: 

1. Empathizing with customers and knowing that simply declaring ‘customer-centric’ is no longer enough

Understanding that customer is the core of banking. And, so is taking proper steps to ensure that you meet consumer needs. Design-driven efforts encourage reaching out to customers to find out the values that attract them to the offering. For instance, approaching customers in the local bank branch and asking about their banking experience. This means encouraging each stakeholder- from management to employees- to follow design thinking and become customer-centric.

2. Ensuring the presence of customers in everyday routine

Banks need to include their employees more into the ideation process and also take into consideration the feedback from customers to truly challenge the might of FinTech apps. By incorporating design thinking in banking, banks can come up with in-house apps that cater to the needs of the customers. Banking customers can provide their feedback and ideas so that improvements can be made accordingly.

3. Encouraging an environment of experimentation

Design-driven companies follow ideation and rapid prototyping to solve complex user problems. And, the same culture ought to be a part of banking. Since banks cater to a large customer base, they’re usually shy of experimenting as much as FinTech companies.


The benefits of design thinking are being touted by finance industry experts as a tool to address the several challenges that the industry faces. After all, design thinking has been called the “hottest new trend in banking” by the Financial Brand Magazine in 2018. There is a link between design thinking and the capability of adapting to changing consumer demands. And, if some banks are still not on board, they need to start.

If you don’t know where to start, you can reach out to Divami. Also, check out our portfolio.

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