ClearTax’s consumer vertical has two primary offerings: Tax filing and Mutual funds. But the vision for the consumer vertical had always been to cater to all needs that arise in the much broader landscape of personal finance management. To understand user behaviour pertaining to different aspects of personal finance management, we went ahead and conducted a 2-month long user research study and a market study. The aim of the user study was to understand user behaviour, behaviour influences, needs and trigger points w.r.t personal finance. In parallel, the aim of the market study was to understand how different players in the financial space were tackling different aspects of consumer finance and to understand if there was a white space with regards to the same.
Here is a case study on the User research process:
User research: Understanding consumer personal finance
A case study documenting a month-long research session to understand consumer personal finance. Conducted during my…
The reasoning behind carrying out both these studies in parallel was to see if there is an overlap found in the user needs and the white space in the market. We found white spaces in both the studies that overlapped, which meant an immediate opportunity to lay down a product roadmap and attack the market.
Insights from User research
From the user research conducted above, we got several insights on how users approach Taxes and Mutual funds.
- Among most other factors that influenced financial behaviour, the most pertinent of them was a combination of age and income range of a user. Most behavioural traits trickled down to these aforementioned factors.
- The age groups defined were in the ranges of sub 25, 25–30 and 30+. Among the 25–30 group, there was a subcategory of the users being single or married as this event triggered a substantial change in financial behaviour.
- We noticed that a lot of people; even in tier-one cities have minimal knowledge about saving taxes in the sub-25-year-old segment. This knowledge slowly picks up substantially, but so do liabilities.
- Even in the age groups above 25, there were a substantial number of cases who did not save on their taxes because they did not know how to.
- When it comes to mutual funds, a lot of people heard of the term but did not know what they were in the sub 30 segment. There is a chunk of aware people, but the majority of people are put off by the steep learning curve and intimidating content form of the financial world.
- Awareness of taxes and investment grew in the 30+ segment and users tended to seek advice more actively and to understand financial strategy in general. It becomes important at this time due to rising costs, number of dependants and liabilities. But by this time, most of the users surveyed felt like they should have started much earlier.
- Awareness of crafting a financial strategy based on one’s own needs was a critical pain point across segments. This tended to lessen as the age went up as most people in the upper category of age tended to seek active help in finances.
- A critical gap was how most products in the market offered services and a platter of products. It was down to the users to understand their needs, translate them into a financial strategy and make necessary investments on top of that. But most users were barely financially aware thanks to the intimidating content form in the financial industry in general. There was an explicit need for hand holding users and educating them. Tailoring solutions for their needs increased their trust as we noted was the case in user interactions with financially aware friends or advisors.
The product offering
The product offering from ClearTax was simple. To offer users a one-stop hub of investments that are tailored to your specific needs. The tax filing avenue would be used as a hook to increase user adoption of the platform. Every year, millions of people file their taxes through ClearTax and there is a cross-sell of mutual funds through the tax filing journey. I have written a separate case study on the same here:
F2S: Edge of tomorrow
My account of the ultra fast-paced, iterative, data-intensive project in ClearTax: F2S, where I lived, died and…
For the V1 release, we aimed to cater to the needs of some very particular segments from our user research: People who were earning more than 8 lakhs per annum and residing in tier-one cities. The total addressable market for the same was calculated to be about 5 million people. Most of these people overlapped with the users that were already filing their taxes on ClearTax.
The aim was to create a product that handholds users through a series of personalised user journies that are relevant to their stage in life and their income range. This would be done through recommendations, which lead users into different journies that combine vocalisation of their goals, formulation of those into a financial strategy and subsequently, investment.
The plan was to add more financial instruments in the future like Flexi FDs, PPF and NPS etc to get a solution that encompasses all financial instruments and hence enable in dishing out more comprehensive, tailored financial recommendations to users. But for the V1, we were working with the pieces to this puzzle we already had in hand: tax filing and mutual fund investments.
Although I will refrain from sharing the exact details of the longer-term roadmap, the shorter-term roadmap was straight forward. ClearTax has what is almost a monopoly in the tax filing market. The only competitor is the government of India However, in the mutual funds division (ClearTax Invest), ClearTax had fallen behind its competitors due to failure to capitalise on some key opportunities:
1. Lack of mobile Presence
Although ClearTax had a respectable mutual fund platform, competitors raced ahead in the game due to mobile-first experiences that had been designed for their respective mutual fund offerings. A key aspect of mutual fund products is performance monitoring and constant engagement and education of the user and the desktop platform we had did not offer this. It was imperative to define an experience for the mobile form factor owing to the huge numbers available on mobile and to the significantly better opportunities for engagement.
2. Lack of Direct Funds
While all the competitors had gone direct, which essentially translates into an extra 1% gain on mutual fund profits, ClearTax invest still did not have a direct license owing to some legal complications. Another top priority of this product roadmap was to sort this issue out and go direct as soon as possible.
In addition, we floated an MVP of the mobile experience for tax filing during the tax season of 2019. Much to our surprise, despite the broken experience of the MVP, we got a decent conversion rate of over 12% from the mobile tax filing experience. This was unexpected as tax filing is an elaborate process that is not suited for carrying out on mobile due to excessive data filling and information backup that needs to be provided. However, learning from this was that a lot of India is undeniably on mobiles.
In addition to the insights that we had from user research, it was imperative that we worked on these aforementioned flaws and went to market with a well-rounded product.
The primary purpose of the homescreen was two-fold:
- To display all product offerings that the application had to offer and
- To guide users through financial journeys through recommendation cards that change according to the type of user and the time of year or the outset of the financial market.
The most basic card in place was for us to get to know the demographics and financial basics of a user so that we could personalise the rest of the home screen recommendations accordingly.
As of now, we just had two product offerings: tax filing and mutual funds. The offering scalability was considered but since the roadmap did not focus on getting another new product vertical into the application for the next 10–12 months at the least, we decided to keep the offerings on the top and let the user scroll through the recommendation feed uninterrupted.
The recommendation card feed acts as the primary mode of engagement for a user. The feed is akin to a personal financial assistant, who digs different aspects of a user’s finances and creates a personalised road map to improve one’s finances contextually in accordance with the user’s needs.
The bottom navigation is fairly simple and consists of the three high-frequency actions of the application: browsing through recommendations, searching for funds and visiting dashboard to monitor the status of investments or tax filing.
The recommendation feed is dynamic and will include other functional cards in different contexts which prompt the user to take certain actions like completing investment, submitting documents for the KYC process, setting up a mandate to ensure hasslefree SIP deductions for an investment etc.
Search and Dashboard
From the search page, a user can get a snapshot of top funds across categories.
The dashboard shows the user a view of the current market outlook to make better investment decisions. It also offers the user with a consummate summary of the user’s investments and their performance.
Further in the dashboard, a single entry gives the user to the fund transaction history. Further flows like pausing a SIP, Initiating a systematic withdrawal/transfer plan etc can be invoked from here.
The Fund page
The below image is that of the current fund page on ClearTax invest; albeit on desktop.
During the user research session mentioned earlier, we took a deep look into the performance of the fund page. There was a huge drop off in the funnel of the current ecosystem as the traffic approached the fund page.
It wasn’t difficult to understand why. More than 87% of the user market consisted of users who are completely new to the process of mutual fund investments. The current fund page simply failed to communicate the story of the fund in a succinct and comprehensible way to these users. Instead, the page was filled with ratios, values, charts and a lot of technical elements which simply rebuffed the users who came to a particular fund page. The aim there was to help the user arrive at a decision of whether to buy a fund or not in a quick and easy manner and the current page was not doing that. It was heavy on intimidating financial jargon and the outdated design added to the confusion.
We monitored the heatmaps of these fund pages through heatmaps and the one element that consistently beat engagement benchmarks was the return calculator. It gave the users a simple picture of what would happen to their money if invested in a particular fund. Also, due to its interactive nature and non-terminal nature of the function, users were not afraid to engage with the feature.
During the user research session mentioned above, the line of inquiry was two-fold. For users who had invested in mutual funds, we asked them to narrate the story of their last couple of mutual fund investments and asked them their core reason for investing in a particular fund. For users who had dropped off on the fund pages, we flipped this question around and asked them why they did not invest in a particular fund. These lines of inquiry gave us a set of traits that users looked for in a particular fund.
Simply put, these were: return value, return consistency, ability of a fund to prevent losses, volatility and returns per unit risk (This was mostly from our advanced users). We then went ahead to devise an easy way for users to consume the information pertaining to a particular fund. We did this by mapping the fund ratios to these aforementioned performance traits. This insights section was worded in such a way as to remove all unnecessary jargon. The copy was simplified and tested with a group of elemental users for comprehensibility.
In the mobile view, the challenge was to help a user to achieve an investment decision at the first scroll glance of the fund page. In this section, we only put up essential information that the users were looking for. This section would represent a fund’s general performance. Once this section captured the interest of the user, the insights section was available to the users in the second fold of the fund page.
The return calculator had default values that were slightly above the average investment values. Parallel studies, like the mutual funds, cross-sell study that was referenced above, showed an improvement of investment probability if the return calculator showed returns in excess of crore rupees. To enable the same, the default values represented values in crores and encouraged users to invest more for compounded returns.
We bucketed information into three separate tabs. The first one was insights. This was followed by an “About fund” and “People also bought” sections. Initially, all three sections were in one massive scrollable screen. But we decided to split these and hide certain sections in tabs. Tabs limit visibility of certain sections. This is advantageous if the section, in particular, has more ways for the user to get lost. In both the “About fund” and the “People also bought” sections, there were multiple exits for the user from the fund page. Hence, we limited the visibility of these sections on the fund page by chunking them into tabs.
Initially, we iterated with different variants of the fund page. Most of these variants had no graph as we felt there was no tangible information a user got from the graph. Also, the graphs had close to zero interactivity on the heatmaps of the existing fund pages. But to our surprise, the variants with a graph performed better. This was down to a graph giving a picture of the fund’s performance at a single view. We hence decided to retain the graph element on the first fold of the mobile fund page.
Another point of iteration was the insights section. The other major iteration in consideration was an insights section with ratings for each insight subcategory. We defined the insight rating mechanism to allow for that granularity in rating. But user tests revealed that users faced an analysis paralysis from this section. Also, users wanted to know which funds did best in each of these sections. These were way too many routes for users to get lost. Hence, we decided to restrict the rating to the fund overall, with a one-line informative description going under each of the insight categories.
In the “People also bought” section too, we decided to limit the number of funds to 4 as more number of funds represented more of an opportunity for the user to get lost in a state of analysis paralysis.
There was the search option on top of the page to enable searching other finds and a bookmarking option that allowed the user to monitor the fund’s performance before making a decision to invest.
The checkout experience for the users has been kept minimal, with important information from one step prior carrying forward into the next step.
The recommended amount of investment is suggested by default when the user clicks on invest now. This amount is usually the average investment in the fund. Also, by default, the user is encouraged to make a SIP as opposed to a one-time lumpsum investment because of the longer-term benefits of averaging out market fluctuation through a SIP. The user is also recommended of the same when a switch to a lump sum mode is made. A similar nudge is presented to the user when he/she chooses to change the monthly investment date.
However, the checkout experience for first-time users is slightly longer due to the extra details that are needed to be collected in the journey. In addition to the details in the checkout flow above, there are extra data points like PAN number, marital status etc that are mandated to be collected by the mutual fund application before the investment is submitted to the AMC.
In most other mutual fund applications, the KYC process, which is essential to complete your first mutual fund transaction, is usually done before the investment process. The KYC process involves filling a lot of fields and submitting a handful of documents. It is an arduous flow that leads to a lot of user drop off.
For ClearBlack, we have actively placed the KYC process after a user’s first investment. This is done to segment the task and then encourage users through the success of the investment task to complete the KYC task. After testing both the flows, we noticed that more users tend to complete their KYC process after an investment has been made.
There are two types of checks happening at the time of first user investment. After we collect the user’s bank account details, there is a verification step through a penny drop mechanism. Another check that happens at this point is a KYC check that is done against a user’s PAN number. Depending on the KYC status, the last screen of the flow changes accordingly.
For users who have not completed a KYC prior to their first investment, there is an extra KYC flow that follows the user after successful completion of the checkout flow. On the desktop front, ClearTax has an option of going either with a video KYC or a manual KYC option, However, on the mobile, we have limited that option to the manual KYC. This was done for three particular reasons:
- Half the information required in the manual KYC flow is already provided by a first-time investor during the time of the first investment.
- The error rate in the Video KYC flow is high and the turn over time is 3 days. However, for a manual KYC, this time is down to 1 day. Moreover, the completion or success rate of KYC is significantly higher.
- The video KYC comes to ClearTax at a cost from a third party vendor. This translates to an extra cost per KYC done.
After a first time user finishes the KYC flow, if the user had made an investment in the form of a monthly SIP, there is an additional step to sign up for a mandate. A mandate is an instruction to the bank allowing for automatic deductions of the SIP. This is done conditionally on the basis of the success or failure of the KYC process.
Hence, after one day of doing the KYC process, a card is floated on the home screen asking the user to opt-in for a mandate for hassle-free SIP payments.
Here is the mandate flow:
Income tax filing
On the tax filing front, there are three options for the user to choose from.
- Uploading the user’s tax data from a form 16.
- Uploading the user’s data by logging into the income tax website of the government of India.
- Manually entering data to complete the income tax return.
These options are shown on the ITR home page and ClearTax recommends the user to upload a form 16 as the flow has the highest completion rate and the lowest manual data input rate.
The ITR flow is divided into three stages: Pre-pay tax, tax review and the tax filing flows.
The pre-pay tax flow mostly deals with collecting user data through either of the modes presented. The preference is given to the user uploading a form 16, which makes the process faster. Once the user selects the upload form 16 option, a wizard parses documents in the user’s phone and automatically selects documents that might be a form 16 or form 26AS. From there, data is parsed and filled into the digital fields on ClearTax’s platform.
Among form 16s too, many organisations hand out form 16 in two parts: Form 16 (A) and form 16(B). Our parsing algorithm recognises this distinction when a form is uploaded and automatically requests the user to preferably upload the other half of form 16 to help finish filing faster.
Tax review flow
In this stage of the flow, after parsing the form 16s uploaded by the user, ClearTax identifies data points and pre-fills it in a document with the format that matches that of the IT department.
This data is then shown to the user and the user is asked to fill in any leftover data points in the form. There are specific sections in this part of the flow which have been made intentionally inaccessible on mobile due to their over complexity for the mobile form factor. Like in the capital gains part of income tax, users are promptly redirected to the desktop client through a link which takes to the user to the desktop client with saved progress of the income tax return.
Post the review, a consolidated tax summary is shown to the user. From here, the user can proceed to filing if there is no tax due on the return. This journey consists of multiple steps with many interspersed error states. The first is a declaration. Post the declaration, ClearTax generates the return in the format of the income tax department. Post this, the document is submitted to the IT dept servers and an acknowledgement is awaited.
The complete filing process is done in bottom modal sheets to ensure that the user does not exit the flow. This is a crucial part of the flow and the bottom modal sheet has no mode of exit until the process finishes. Escape routes are offered in case of errors.
In the coming days, I will be adding the process of designing the design language for this project. A couple of other journeys like onboarding will be added too. Stay tuned!
This project was done in conjunction with Chetan Ramesh and Nikhil EVR.