Secrets to Simplify Loans and Savings

Published in

Product Soup

5 min readAug 28, 2016

Traditional banking apps try to replicate the legacy of banking practices on their mobile applications which bogs users down and makes them weary of bank work.

What should a banking app always be?

Simple: The app should be clean, with easy process flows, fewer steps, fewer options, intuitive and usable with a consistent, frictionless and non-frustrating experience
User Empathetic: A friendly and engaging app which remembers user actions and frequent use cases to optimize processes and actions
Minimum cognitive load: Have increased design sensitivity, use simple imagery, to remove clutter and visual noise and make cleaner screens with clear action items
Least human interaction: User-centred designed and help options to maximise ease of use and minimise the need for assistance

In the simplest terms the user needs only 2 things from any financial application:

I’ve got money — Help me make the most of it.
I need money — Help me get it.

This prompts us to include 2 primary features in a Banking App: Loans and Savings

Why work in the space of Loans and Savings?

The available solutions are complex
No major game-changing tech-intervention done yet
Increasing demand in our growing economy and bulging middle class

Payments and Expense Tracking are major functionalities in any banking domain, but we choose not to include it in the app because:

Both Payment and Expense tracking are Crowded Market Domains in India, where simple and innovative solutions like wallet payments, cashless transactions, expense management etc. are already implemented by numerous apps like Freecharge, PayTM and Walnut
Many banks have resorted to developing their own apps to compete in the Payments and Expense tracking domain or partnered with such apps

Credit and Financing

Core Vision

Easy Financing
Financial Education
User Engagement

Features

User Centred Design: Consumer experience should be a differentiator
Minimum touch points for user data capture: Leverage camera for documents, e-KYC, e-signatures, pull Aadhar, PAN card, ITR and Bank Statement based information with consent and necessary APIs
Security: User Authentication to avoid impersonation and defaulting
360⁰ Customer view: Borrower should know maximum eligible amount, credit rating, eligibility for which type of loan product etc
Loan Information and Education: Interactive methods to explain loan terms, interest, repayment. Borrower should be able to select repayment duration and see flexible EMI options. Loan product comparison (if any)
Credit Underwriting: Credit Bureau integrations on mobile, easy document verification and approval process where user is constantly informed of the progress. Also, simpler collateral Assessment for higher ticket sized loans or bigger products
Repayments & EMI: Easy repayment / amortisation schedule and EMI’s, reminders, payment tracking with overdues and settlement
Cross-selling and Up-selling: Eligibility for other Products without keying in data. Gauge user behaviour to sell goal-based savings products (co-relate lending habits and saving habits)
Low touch services: online loan organiser / aggregator, budget tracker, refinancing, online credit reviews and payment reminder tools
Community: Track user testimonials, stories, encouragement to repay, share success, information etc.

Process flow

Investments

Core Vision

Interactive Goal Based Savings
Performance Tracking
User Engagement and Education

Savings has 2 components to it: Budgeting and Investment

Budgeting and Investments — 2 components of savings

As discussed earlier there are many apps in the market who do budgeting and expense tracking with an excellent interface and deep insight into spending behaviour of the user. Apps like Walnut do it in a non-intrusive way by just reading the Bank SMS’s in the device. Building a budgeting module will be unnecessary, it’d be best if one could partner with such apps.

Features

User Centred Design
Goal Based Savings: List popular and custom goals, sub-goals. Set corpus and time period. Educate on regular savings and SIP. Also explain tax savings and tax-goals.
Predefined portfolios: Including a bouquet of investments customized to different investor segments, complete with automatic market triggers to transfer money from one instrument to another. User-customizable through easy switches and dials. E.g. encourage user to invest more when the NAV of a portfolio mutual fund is lower than usual
Risk Assessment: Gauge user’s risk tolerance through interactive questionnaire
Portfolio information and Education through Abstraction: Simplification of portfolio and ease of understanding investment information like CAGR, post-tax yield, fees, liquidity, lock-in periods, entry/exit loads and penalties
Minimum touch points for user data capture: Use Optical Character Recognition to minimise data entry and validate proofs captured. Strong integration with banks for information on user data and easy setting-up of monthly payment methods and sweeping from accounts.
Performance and Transparency: Past performance graphs (annualised CAGR over 6 months, 1, 2, 3, 5 years), Risk (quantified range of yield over 365 days), portfolio tracking with yield post-tax, fees and penalties
Triggers and Prompts: Encourage user to set triggers based on investment performance and prompts to switch invested amount from one instrument to other based on market changes
Easy withdrawals: One step withdrawals with easy credit into account
User Engagement: Constant updates on distance from goals, Rewards on meeting goals, gamification to encourage investment in goals, integrate with expense tracker to notify when budgets overshoot in a particular expense category or when extra amount can be invested.
Community: Feed from other users for motivation on investing and meeting goals. For example, Strava is a fitness tracking app which motivates users by showing activity of friends, a savings app can show goals achieved by friends. Forums for experience and education can also be established.