We take a look a design thinking and how it can be applied to the Financial Services sector at another instalment of our regular Byte Breakfast series.

1. I’m going to try and use 20 minutes to help
everyone change their perspective on how they
discover and consequently solve problems.
And to do that, I’m going to start today by talking
about one of the most significant innovations
that’s happened in the financial industry. It’s a
world changing technology, and it’s an old one
that I guarantee you’re all carrying with you. Paper
Money.

2. And more specifically, I want to talk about this
guy. Perhaps the most famous paper currency.
The American dollar.
We’ve all probably used one, but you might not
have properly looked at one.
And if you did properly look at one, you’d see
that design-wise, it’s really horrible. And I’m
going to show you why.

3. To look at, the American dollar is a design nightmare. It’s a mismatch of
different fonts, swirls and symbols, resulting in a completely overloaded
interface.
It’s a design problem that clearly started badly and has got worse over
the years as more and more counterfeiting measures have come in to
play.
Looks wise, there’s a lot to dislike.
Source: Wikipedia

4. But beyond the aesthetic there are deeper problems too. As we all
know design isn’t just how it looks, but how it works, and from a
usability point of view the American note system fails badly too.

5. This is the Dollar redesign project. It’s run by a chap called
Richard Smith and each year he runs a competition to
rethink the US dollar.
And in doing so, he’s come up with several areas where he
believes paper money could improve;

6. Things like
Colour;
Size;
Functionality; … ie. how do people actually use it
Composition; … what’s it made from and how it’s produced. Whats it’s
durability, what’s it carbon footprint?
And to illustrate why some of these traits matter I want to play you a
short video of a paper money user called Tommy Edison.

7. So, the dollar bill. Not the greatest system if you’re blind.

8. And just from looking at that short video, you see those design issues
that are highlighted in the dollar redesign project occurring as real world
user problems.
And I don’t know about you, but when I see that. When I see someone
experiencing the issues I immediately associate more personally with
them and become interested in solving them.
It causes you to have empathy for the user, and see the problems
differently. And it’s that word, empathy, that I’m going to focus in on
today.

9. This is Australian Money and since about 1996, each and everyone of the issues in the dollar redesign project have been addressed in the real world
by the design team.
In the Australian system different values have different colours. This is a logical coding system and every brain can process it irrespective of language.
It’s a universal index for sorting which can be learnt really quickly.
Secondly Size; Each bill feels different in your hand. Between a fifty and a five for example there’s about a 4cm difference so you can tell the
difference between notes in your pocket.
That leads us on to Functionality where because of the sizing and the colours of the bill you can see what you’ve got without taking stuff out your
wallet. And if like, Tommy Edison you can’t physically see the bills, you still know what you’ve got.
Lastly Composition; I’m sure a lot of you will know that Australian bills are know as polymer bills. They’re made of plastic. And in terms of durability
they last about 4 to 5 times longer than paper money. Making the bills plastic has other benefits too - the bills will survive a trip through the washing
machine which is estimated by the bank of england to cost them about £100m at the moment. Or if you’re clumsy like me and drop one in a public
toilet, which all of us I’m sure have had the misfortune of doing at some point, you can actually pick it up and run it under the tap.

10. Polymer notes have been good business for the Australians too. They now manufacturer poly
The good design of the money it turns out, is also good business.

11. So I want to make a couple of observations about the usability problems and design chronolo

12. Firstly, at it’s outset paper money was not designed around all of it’s future users - in
the US for example, the original Greenback dollar was issued by Abraham Lincoln to
solve a short term problem during the civil war to help the federal government raise
money and pay soldiers in a form that couple be easily sent home.
The design didn’t consider the day-to-day needs of people in the future who would
eventually use the notes, purely the immediate problem of getting paper money
quickly in to the system.
Secondly, it’s what we see with paper money is that the best version of it is now
emerging at arguably the tail end of the paper money era.

13. David Wolman is the author of the book, the end of
money. And I listened to a podcast with him recently
where he said that the truly interesting frontier of design
isn’t going to be the banknotes of 2016, it’s going to be
the interface with mobile apps and what designers are
doing to make our interactions with money more fluid,
more sophisticated and possibly wiser.

14. So, from paper money’s design history, we see some fundamental lessons emerging…
1) Paper money was not designed with people in mind.
2) All the problems with paper money emerged after the design work had taken place.
And two of these ‘P’s’ here, ‘people’ and ‘problems’ that are fundamental to a process with Em

15. Design thinking is a process that many of you may have heard about and
some of you may have seen applied.
It’s been popularised in the last twenty years or so by many tech startups
and grown ups. Tim Brown from IDEO is one of the most famous evangelists
of it, and Steve Jobs who some of you might have heard of famously applied
some of the design thinking principles in his time at Apple.

16. At it’s heart, design thinking isn’t a way of designing products and services, but a
method for tackling any problem.
And it looks to solve problems in three ways, by bringing together what people want,
what technology can enable and what is economically viable.
And the Design Thinking process itself is involves focusing on 5 key areas.

17. These are;
Empathy > Problem definition > Ideation > Prototyping > Testing/feedback.

18. Now, to a certain degree it could be argued that a few of these
steps typically exist in most businesses. It’s not uncommon for
example to move from an identified problem, in to some level
of ideation and through to a proposed solution.

19. However where design thinking’s real power lies is in beginning with
empathy. Design thinking is founded on the idea of first spending time
with the stakeholders you’re looking to problem solve for. The focus in
on understanding their conditions, constraints and requirements, before
you try and identify their problems.
To explain it another way, conventional problem solving assumes that
the problem we’re solving at the outset is the correct one and rushes us
towards a solution.

20. To look at the chronology of paper money you could easily
argue that the initial designs were born from designers
working to solve one problem, perhaps the brief was ’how do
we get paper money quickly in to the market’ and as a
consequence other key problems around the actual usability
of the money itself were overlooked.

21. What we see is that with the US note the usability problems are a
consequence of the design process, whereas in the Australian
version by starting with empathy and understanding how the
money will get used, the design becomes a consequence of the
problems.

22. So, why does a more empathetic approach to problem solving
matter?
Well Design Thinking has been popularised as it offers a
method to bring what you might call left brained and right
brained thinkers, together around one approach.

23. Traditionally When looking to tackle a problem most large corporations have
often design at this rational end of the scales. Business analysts assume that
they already know all the problems and just require the fastest route to the
solution.
This has often led to products and services being developed in a business
vacuum, without the ideal user experience for the customer being front of
mind. Products are conceived that on paper exploit a genuine business
opportunity, but in reality can’t exist without the business also being able to
understand what a good user experience looks like.

24. A prime example of this is the story of WEVE the mobile wallet joint venture from EE, o2
and Vodafone that, before Apple Pay, was supposed to deliver a standard mobile wallet
experience for customers.
The telcos here saw the £14bn mobile payments market projections and they wanted a
piece of it. It was a product driven by a business need.
However, six months before it’s release the project was axed as the companies and I
quote ‘couldn’t agree on the apps functionality’.
More candidly, on leaving the company one of the senior executives was quoted as
saying, “Apple were focused on delivering a consistent user experience for payment on
iPhones – mobile operators however were not prepared to, they just wanted to compete
with each other.”
This for me is a prime example of a product developed rationally and sensibly around
business opportunity, but which also needed a unified approach from the investors on the
customer experience they thought they should deliver.

25. At the other end of these scales, some businesses,often make
the mistake of designing entirely emotionally. They develop
ideas that perhaps people want but miss the rational validation
phase to understand if these ideas are commercially viable or
mass market.

26. Empathy led Design Thinking sits in the sweet spot between
the emotional and rational approach to problem solving. It
encourages us to find genuine problems to solve through
rational observation and research and then enables us to
develop potential solutions through constant testing and
creative prototyping alongside customers.

27. So going back to Empathy as the driving force for problem solving
in this way, I want to try and help you understand what empathy
really means, and how it’s getting used.
For me, when we talk about empathy in design, what we really
mean is being able to understand people’s lives enough that you
can take a meaningful design decision as a consequence.

28. One example of empathy for me is the film Heat. Where on entering the bank
Robert De Niro’s character shouts
‘Your money is insured by the federal government, you’re not gonna lose a
dime!’
That’s Empathy. This is a well designed heist. De Niro knows that a potential
problem for his hostages might be fear of losses, and by opening with this
statement he nips that in the bud.
Now if you were going to push the metaphor further you’d probably question
whether hockey masks and AK47’s were a good decision in winning the
customers over, but hopefully you get the idea.

29. The Heat example is a trivial one of course, so I thought I’d give
a couple of examples of how Empathy is being used in
business right now.

30. Firstly, empathy is being used to drive entire business propositions.
This is a new service from the financial software company Intuit. Intuit are headquartered
out in California and have written quite a bit about how they use empathy and design
thinking in throughout their business.
This is one of their new products, called Tada. And it’s a really simple messaging based
tax return service. And from the very beginning you can really see empathy for genuine
user problems coming through.
The language focuses on the speed and affordability of the service. Users chat to a
person rather than filling out forms, they photograph documents rather than scanning
them. All the updates happen in a bitesized SMS style interface rather than a lengthy
web view.
Empathy here, is the driver of this entire business proposition.

31. At a product level too empathy is also driving features.
Services like Google Now and Siri are prime examples of designing by understanding real
user problems.
This is a screen grab I took from my phone last week where the OS had recognised that I’d
got a meeting in my calendar and alerted me 12 minutes before I needed to leave the house
based on traffic conditions at the time.
This is design based not just just around the initial problem of creating the meeting, but the
actual contextual conditions to get me there.
The base experience is a product that allows me to create the meeting, but the better
experience is the one that makes sure I actually have that meeting in the real world.

32. A third example here where empathy can be used to
drive entire innovation processes.
This is IBM’s design thinking framework and it shows
how IBM have adapted a process that fits their internal
goals.
What’s particularly relevant is their idea of ‘sponsor
users’ which provides really in-depth guidelines to how
and why IBM innovation teams should be developing
empathy for real customers in their design process.

33. • Droplet is a small mobile payments startup aimed at independent merchants
• Tom (one of our team) = droplet user
• Recognised pain point for Droplet as droplet user (customers customer)
• Droplet could actually solve lots of other problems

34. • Homeserve original brief
• Heavy tech spec. Already highlighted problems
• Heavily featured app - claim status. Real time driver progress. etc
• Went back to speaking to real people
• Problems were more basic than assumed

35. • What’s my policy number?
• Who do I call in an emergency
• How do I fix something quickly to limit damage (knowledge normally given on the phone)
• How do I prevent stuff going wrong?

36. 2 relevant stories.
Problem discovery > how it changed
Droplet… anecdotal story
Then a big brand story … minifigs, leading to an actual thing

37. Why then does any of this matter in Financial Services?
It may sound like an interesting process, but is it an important one?
Is it just another trendy nice-to-have, or do design thinking and empathy have a long term relev
I believe they do.

38. Firstly, because financial institutions are getting unbundled at a rate of knots. If you’re here from a
bank, then you’ll know that it’s pretty impossible in the last year to do a financial services talk
without including this graphic. No doubt many of you will have seen it.
This graphic shows, in quite a scary way, how new entrants and startups are challenging every
aspect of what the traditional banks offer.
And the graphic is relevant to the topic, because in the vast majority of these cases many of these
startups will have adopted design thinking as their approach to problem solving.
As I explained Design thinking itself came from silicon valley - and it’s rooted in that philosophy I
shared at the beginning of talk where new products are created by marrying up real customer
problems, with what is technologically feasible and commercially viable.

39. As the last graphic illustrates, a lot has been said about
competition from those new FinTech players. But what about
the competitive threat from large established technology
players too?
This graphic, taken from a recent Capgemini report surveyed
200 global financial services senior leaders and highlights that
the biggest perceived threats are actually from large technology
players particularly Amazon, Apple and Google.
As you’ll all know, these large tech players have a considerable
track record in building products and services customers want,
and have the innovation capabilities and brand presences to
make things happen at scale.

40. And again, the engine you’ll find behind many of these tech
companies like we saw with services earlier from Apple and
Google is rooted in design thinking.
Jeff Bezos here from Amazon commented that Kindle was an
example of determining what customers need first and then
working backwards towards a product solution.
This approach to product development will be really
interesting when it gets pointed at financial services.

41. Before I continue with this slide I’d like to point out that I managed to get almost to the end of my talk before I showed a picture
of a post-it note or mentioned the term FinTech.
But cliche’d picture aside, this slide does make an important point on how design thinking is relevant to financial services and
big business, but particularly to you as individuals.
You see often at these talks you might hear people like me talk about organisational culture, or adopting a culture of design
thinking. This sounds great in practice, but I’m sure in reality many of you come from companies with distributed offices and
potentially thousands of employees. The idea then, of your entire company buying in to design thinking is a non-starter.
However, what I personally love about the idea of designing with empathy in mind is that becomes something that you can apply
as an individual in your job, or your small teams, right now.
The principles of starting with real customer problems, and valuing empathy can genuinely effect what you do in your teams this
time tomorrow. And because design thinking is an approach to problem solving, not a rigid process, you can start to experiment
with the core principles immediately.
Across the globe right now, Design Thinking courses are the fastest growing business classes on many continents. This photo is
taken from Stanfords d.school which now has spin offs in several countries and also offers online learning. The emphasis here
is on individuals up skilling themselves in this approach and then taking that mindset with them in to big businesses, it is rarely
about a business making a wholesale corporate change from the top down.

42. Lastly, when considering this question of how design thinking and empathy relates to financial
services, I think it’s really important to remember that empathy is a new, old idea.
What I mean by that is that most financial products and services, be those to do with credit,
mortgages, accounts or insurances began in an era before technology. They were at their very core
more connected to customer problems because the way the product was accessed was through a
direct human interaction.
As technology has come in and more products have been digitised I believe what we’ve seen is an
empathy gap emerging in business, where the company is now much further from the true
understanding of how its customers feel about their services than they once were.
Design thinking enables digital things, but in a way that doesn’t detach us from real people.

43. So, I’ve only had 20 minutes to rattle through this, but maybe
that’s peaked your interest in this topic and how it empathy
relates to your specific business.

44. Questions to ask yourself;
What if these aren’t the right problems?
What if these aren’t the real users?
What user research do we collect every day?

45. Two great places to start if you are interested.
The first one, is to take 90 minutes out to do Stanford d.school’s free
virtual crash course in design thinking. The link is up here on the screen
and you can grab it after this event too when we ping the slides round.
Secondly, because a lot of you today are from larger companies I’d point
you towards IBMs Design Thinking Guide I showed you earlier. In
particular the sections on how to find, work with and observe users of
products.

46. And of course, if you want to learn more about any of this, you can have a
coffee with me.
We’re always keen to make sure Byte is about you learning, and not us
pitching, but suffice to say we practice everything I’ve shown you here today
in our work at 383.
Here’s a couple of photos from last week of my team in the rain speaking to
customers and then pointing at some post it notes to prove it.
So, if you do want to chat you can get me on john@383project.com, or on
twitter @john383
So, go checkout design thinking.