Doing Lean UX in the lending software world: lessons learned

If somebody told me two years ago that I’d be joining a lending company as a Lean UX practitioner, I’d just laugh: this type of financial software was way far beyond my interests. Besides, being a ‘practitioner’, a methodologist, seemed to fit me like a saddle on a cow.

But never say never— here I stand after ~20 months working for 4finance, an online money-lending non-banking institution. And I have to confess, now I am a Lean enthusiast and practitioner. And before I go exploring new horizons and applying Lean to the projects I always dreamt to work on, I want to summarise my experience with online lending software.

Maybe some will find these takeaways useful for their own work , may be my colleagues from the business teams will see how easy it is to apply the basic Lean UX principles and will turn to the light side :)

Start a project by matching a real customer with a real problem

It sounds easy, even primitive, and yet we repeat the same mistakes again and again:

1. We confuse ourselves for customers (even when it’s clearly not so).

Let’s create an iOS app, we say, designing a lending tool for sub-prime customers, who have troubles paying off their current loans taken to buy a washing machine, having holidays, or paying off the debts. Yeah, we might have an iPhone, and iWatch. They — most probably — don’t.

2. We jump into solutions and product features too early, and then look for data to confirm our ideas.

Nowadays everyone knows user research is important. Business teams know what questions need to be answered before the product launch. But how we answer these questions is still a problem:

- Who are your customers?
- We looked at the analytics data.
- Do people need this product?
- Doh, of course they do, because we created it.
- Is the product usable?
- We focus on UX.
( — ‘Validating Product Ideas’ by Tomer Sharon)

The best thing we can do to avoid such a self-deceiving trap, is to check whether our ideas are based on the real problems people have.

Instead of relying entirely on global market research, go out and run live interviews with potential customers. Unless we want to copy an existing product, understanding the real customer and their real problems is the only key to competitive advantage on the market where everybody is copying each other: UI, home pages with smiling families and generic too-good-to-be-true promises.

It’s the small details done right, that will convert the customer

  • Anticipate and answer the main questions the customer has about your service, ditch all the marketing cliches (they just take up the screen’s space, nobody reads it anyway).
  • Choose the right language. Select the words the customer would use themselves, don’t make them think about terminology. And never hide important details under obscure messaging and small fonts. Even if it works ones, it won’t pay off in the long run.

Do lean research with potential customers

With financial software it’s not easy, because people usually do not chat freely with strangers about their financial situation. International markets are also a challenge — how do you interview a Mexican or a Swedish customer? From my experience,

  • If you have any budget, spend it on hiring a local research agency and interview 5–8 real people from your target audience. The task is to validate the problem, or the main product advantage. It can be done with open questions, competitor’s products, or some basic proposition designs (even static images work just fine). Mind the words people use describing the problem — you’ll use them in marketing and the final designs. Negative experience they had with the currently available alternatives is also very important — you’ll need to differentiate your product.
  • If you don’t a have a budget, but have a running business in the country — start building good relationship with the local marketing or customer care team. Lean research can be really quick and dirty (it only needs to be iterative), and your colleagues can help either finding the target audience on a shoestring pricing or analysing the support calls.
  • If you don’t have a research budget, and don’t a have a business in that country — tell the business team, the best they can do is a spinoff of an existing project, improved as much as online research allows. And plan to interview customers and to collaborate with the customer satisfaction team as soon as you have a public product.

Once again, interviewing live customers is not easy (and is not cheap for international projects), but every time you do it, you are rewarded with insights that let you create an outstanding product. And it’s definitely a more reliable foundation than following a C-level product owner’s feature and design requests.

Analyse customers’ fears as well as problems

Fears are not real problems, they might never happen, and people speak of them more openly during user interviews.

The basic list of concerns about taking a loan is quite typical, and applies to all types of a lending product’s customers:

  • Understanding the real loan pricing and terms
  • Understanding penalties
  • Fear of the company mis-using their data (mail and phone spam)
  • Whether your product/company is a fair dealer

Addressing those fears already can make your product look better and more trustable than the majority of the competition.

But this list is a bit generic. Analysing your target audience specific fears gives you more product insights, like

  • People who use credit cards’ overdraft regularly, are afraid of late repayment (you can offer to cover this automatically for a fixed fee).
  • People who have open loans, fear to pay extra to the original lender, if there are better re-financing opportunities (you can offer to set up a constant watch over the market and inform about the options).
  • People fear they will not re-pay current debts (you can offer to set up an intelligent solution that will look after your monthly budget and savings).
  • People are afraid of the online credit card and identity theft (you offer them a smart solution that will look at suspicious transactions, just like your smart software informs you on suspicious logins from unknown devices).
Credit Karma is addressing a fear of theft, not a real theft

Combine that with their past negative experience people describe during the interviews, and you have a very good list of ‘dos and don’ts’ for your product.

Reputation is everything

The worst mistake a lending company can make is to consider people, who take loans online, to live in the information vacuum. No. People will google you, dig through TrustPilot and other reviews, even check your customer support line.

So if your loan price is ~3 times higher than that of a bank’s, let your customer service and customer experience be equally better:

• Don’t lie about the deal conditions

• Explain the terms and pricing openly — that will pay-off in customer retention

• Answer every negative review and share it with the product or business teams

Shorten and simplify the application process

1. Use fewer form fields — skip all optional questions, and let your marketing department find other ways.

2. Fewer form steps — allow the customer to complete the application form in parts, guide through the whole process and show the progress, like “~3 of 5 steps done”:

N26 is a great example of a lightweight ‘checklist’ navigation

3. Let the customer enter only the most important information, and leave the heavy lifting to the software backend and various integrations. Ideally, the customer should be able to identify themselves with mobile phone + personal id + bank id, and the rest is gathered in the background (public, governmental and other databases).

4. It’s good to remind the product team and yourself that from the customer’s perspective, the ideal application flow looks like this:

I need XXX money, send it to: _________, [ NOW ]

It pays off to deliver a product as close as possible to this ideal — with the powerful backend software and integrations, not a myriad of questions asked via step-by-step online form.

UI design: functional and legible over fancy and trendy

UX-ers love great design. Plus, we must think about our portfolio. Of course, we want the latest trends, hi-res videos, images and fancy animations.

Now, the question is what is needed:

Readability is most important for people with impaired vision (hey, more than 50% of our clientele are 40+ years old — do you think they’ll love reading in that tiny font?).

Animations are good, when they are meaningful. But little jumping form labels are harder to use than plain ones set firmly above the form field.

Hi-res imagery and videos are cool, when they don’t impair your task on a slow internet connection

This list can be rather long — and the only way to get rid of such problems is to let designers see how live customers use the product. Which is, test, test, test and listen to the real customer feedback.

The final lesson — adapt your methodology to the situation

- What did they say about our team?
- They say, we are not Agile.
- But we always deliver even before the deadline!
- That’s why they are going to assign a Scrum-master to us.
— (from a conversation overheard at work)

No methodology, however great, should be applied blindly (Alistair Cockburn’s ideas about that are as actual as 15 years ago). Lean UX is a rich and versatile tool box that can be used differently, depending on the current project phase and circumstances. So judge by the situation — and apply Lean in its most effective and clear form — or invent your own variation.

Lean UX is a no-nonsense approach, and should be loved by the business and risk teams. Keeping the meetings within the customer->problem->solution->competitive advantage boundaries gives all teams a clear understanding of the product. And it gives enough material for the UX team to come up with a viable product design.

It is not that important, whether you persuade everyone to use a Lean canvas (imho, the best business model cheat-sheet ever created) or proper terminology. Detailed persona’s photos and walls covered with sticky notes are not mandatory for a good UX work. Understanding the project + collaboration with the business teams are.

Epilogue

For me, the best working moments are not about winning in a discussion with a business team, or doing well whatever we are good at. The best moments reveal something new — an alternative reality we were unaware of. And this happens when we step out of the comfort zone, out of the office into the real world with the real people — and test our best ideas to see them fail once, and twice, until done right — or failed and rejected completely. But at least thus we will not create something wrong and unwanted, that will linger on forever because nobody will want to accept the truth.