In December of 2009, just over a year after the U.S. government passed the $700 billion bank bailout, former Federal Reserve chair Paul Volcker spoke at a conference hosted by the Wall Street Journal. “The most important financial innovation that I have seen the past 20 years,” he said, “is the automatic teller machine.” Volcker, who led the Fed through inflation during the 1970s, was famously frugal and unimpressed by the trappings of Wall Street. The cultural context around 2009 was sympathetic to that perspective — banks were unscrupulous and not to be trusted. Just over a decade and a bull market later, we’re not as skeptical of financial institutions as we were then. Capitalism is viewed less as a system that should be toppled and more as a tool to be manipulated before it manipulates you first.
The Great Recession kicked off the era of fintech that we’re all living in today. If the late Volcker could comment on the financial innovations of the past decade, he would likely agree that we’ve finally bested the ATM. Regulatory changes in the Dodd-Frank act, passed in 2010, required that banks allow consumers to access their own data, and to share it with third parties. That shift was one of many post-recession moves meant to protect consumers and challenge the power of traditional banks. It allowed young companies like Venmo, Bitcoin, and Simple, all of which had launched the year before, to be more easily adopted. It’s also why banks have been eager to launch their own products (like Zelle) to compete with fintechs, or gobble up competitors (like Simple, which recently shut down, a few years after it was bought by BBVA, or Learnvest, which was dissolved by Northwestern Mutual post-acquisition) and keep data to themselves.
If the late Volcker could comment on the financial innovations of the past decade, he would likely agree that we’ve finally bested the ATM.
As finance increasingly moves online (a McKinsey report from last fall estimates a 20 to 50 percent increase in mobile banking globally as a result of the pandemic), digital design has taken a larger role in the way people manage their money. Gamified investment apps like Robinhood and Public have been blamed for goading users into what amounts to gambling. Millennial and Gen-Z courting-companies like Current strongly assert that they’re not banks, and use design to differentiate themselves from their stodgier forebears. (It’s worth noting that, like many fintechs, Current really isn’t a bank, though it functions like one — instead, it partners with two established, FDIC-insured banks.) And of course, there’s crypto, which abstracts the concept of currency entirely. Much of what used to constitute personal finance — the opening of a credit card or bank account, the trading of a stock — can now be done with little fanfare, on a computer or phone, with the swipe of the screen or tap of a button. Physical money is less visible in the lives of many people than it once was, but brands built around it are everywhere. Banks, brokerage firms, credit cards, budgeting apps and buy-now-pay-later services all sell the same thing. They just package it differently.
Physical money is less visible in the lives of many people than it once was, but brands built around it are everywhere.
“Design does a lot of work for trust,” says Professor Bill Maurer, a cultural anthropologist and sociolegal scholar at UC Irvine whose research interests include the development and consumer experience of fintech products. “There’s a reason why, when banking was being democratized in this country and around the world, architects were called in to make these things look important, imposing and permanent. There’s a reason why classic bank architecture is all in the classical style, like Greek columns and all that nonsense.” These symbols of “security and stability” — columns, vaults, marble — “helped people feel comfortable giving their money over to this institution and going to that institution for other financial needs.” Maurer says that the same kind of care and seriousness needs to be put into the design of bank and financial services apps and products.
Marcus, the first consumer product from Goldman Sachs, is an excellent example of a brand that uses design to build trust out of thin air. Prior to 2008, Goldman was an investment bank. It became a bank holding company during the financial crisis, as a means of survival. In exchange, Goldman got access to Federal Reserve funds, and the Federal Reserve got the ability to more tightly regulate Goldman. In 2016, Goldman admitted that it defrauded investors in the years leading up to the crash and paid a $5 billion settlement. That same year, it launched Marcus, which started as a personal loan service but has since expanded into robo-investing, banking and a budgeting app. Today, it cites “intuitive digital experience” as a key brand value. In practice, the Marcus digital experience consists of a dark blue interface dotted with complementary shades of purple, white and green. It combines the useful features of budgeting apps like Mint with the sophisticated, cohesive branding of a midcentury airline.
Graphs of all kinds are a hallmark of modern fintech, and Marcus is no exception. Marcus Insights, a free program that runs on third-party data supplied by users such as credit card transactions and loan accounts, can be used by anyone, whether or not you’re a Marcus customer. It has donut graphs that divvy up spending habits, bar graphs that show fluctuations in account balances. The constant, detailed monitoring of one’s assets made possible through digital financial products isn’t necessarily a bad thing, but it’s not hard to see how it can lead to obsession. Digital financial products have enabled a kind of quantified self, composed of real-time tracking of spending, saving and investments. Like any kind of data tracking, it can give users an illusion of control. And if you’re utilizing something other than a notebook or a spreadsheet to track that information, you can be sure that someone else is keeping an eye on it, too.
The pleasures of using a finance app, whether that’s in the form of “social” features or the shrinking gap in a pie graph tracking a savings goal, are made possible through design. Many of these companies have limited or nonexistent customer service and rely on interfaces to make users feel well taken care of. Marcus’ design also includes that other mainstay of fintech: positive feedback in the form of checkmarks and animation to mark, and sometimes celebrate, relatively mundane events like buying a stock or scheduling a funds transfer. (Robinhood swapped confetti for gem-like shapes earlier this year, following scrutiny amid the Gamestop bubble, but confetti still appears to be a feature in Marcus.)
“Design does a lot of work for trust.”
Of course, design is about more than looks or marketing. Maurer stresses that good functionality is essential, too, because there’s more at stake when your bank’s app fails than, say, your fitness tracker. And there’s a careful balance between too much information (no one wants “Learn More” to lead to an article-length webpage) and not enough (terms like APR should be defined without having to consult a third party). Access to terminology is especially important when it comes to investment products. Lower minimums and no-fee investments have made it easier for people to invest, but that hasn’t coincided with increased financial education or literacy. Sally Madsen, vice president of design strategy at Fidelity and an IDEO alum, thinks there’s an opportunity to “build learning into the experience itself.” Integrating “bite-sized, handy” information that fits into the way that people naturally want to learn.
The design-enabled clarity that makes it possible for people to manage their own financial lives is more complicated when it’s applied to parting with money. “Every company is getting smarter, faster and more efficient at getting consumers to part with their money,” says Wendy De La Rosa, an assistant professor of marketing at Wharton, whose research focuses on improving financial decision-making for low- to middle- income households through behavioral economics. She cites the ubiquity of services like Amazon Prime, designed to create frictionless paths to spending and says consumers need more ways to install financial self-control mechanisms, to help counter the increasingly tempting environment that is the internet. “We need more people creating sludge to spending,” she says.
De La Rosa points to the options consumers have to manage their time and attention through apps and plug-ins, but says there’s been less interest among designers and engineers to create products to help consumers to manage the way they spend money digitally. “How can we as consumers create barriers to our own behavior?” asks De La Rosa. Then she offers some options: What about a pop-up that asks if you really want to make a given purchase? Or a time-delay mechanism that gives you an hour to cancel a purchase before it goes through? When it comes to money, a little friction can go a long way.