A Software Revolution has Begun: Are Banks Prepared?

by Eric Lindeen 0

An amazing revolution in software and consumer behavior is occurring and many of those who might benefit are missing the opportunity. Smartphones are changing consumer behavior, and with that the way consumers and business people want to interact with their world. The organizations and software developers that embrace this change early will be able to gain significant market share. Banks are lagging behind in this respect and yet have some of the greatest opportunities to capitalize on this movement.

A typical smartphone today has the computing power of a desktop PC from 6-7 years ago. They are loaded with powerful features like HD video, GPS, touch screens, and most importantly apps. Consumers spend 80% of their mobile time in apps and only a fraction of their time in browsers.

Apps today are (mostly) intuitive and usable on a level that traditional software often hasn’t achieved. Consider learning to use Microsoft Excel or Outlook. You’ll need manuals, books, training, and YouTube videos to be competent in even half the capabilities available. Most apps today have a page or two of help at most. In fact, the assumption is that a good mobile app should be so intuitive that a user will be able to use it successfully with no training.

An emerging field in computer science is Natural User Interfaces. The idea behind this new field is that the ideal software won’t be a tool that requires learning, but is so intuitive to use that we can figure out functionality as we need it. Mobile apps are the first to embrace this idea en masse, although they are still far from the end goal. Software developers in gaming are also pursuing this goal.

However, not every software developer has seen the light. During a conversation with a developer who had created a new B2B application, I had great difficulty explaining to him that the interface was quite frankly horrible. He explained that users needed to understand the complexity of the underlying data structures and there was no way to “simplify” the complex business processes his software enables.

I asked him how the interface would be if it was a mobile app. He promptly resounded that it would be horrible, but that was irrelevant because mobile apps are for consumers and his software is written for business people. I was making progress. I asked if he was a business person. “Yes,” he replied. Then I asked if he was a consumer. Again, “yes.” He didn’t immediately repent, but I could tell he was starting to think about usability in a different light.

Here is the key to building business software in this new era. All business people are consumers. Our expectations of business software are driven by our consumer experiences. Claiming that software is written for business is not a valid excuse for creating poor software.

Consumers, as a result of their short attention span (who has time to read a manual) and improved usability in mobile apps, are coming to expect much greater usability from their software. Software providers in gaming are now delivering on that expectation. Organizations that conduct any level of user experience testing have noticed that consumers grimace more frequently when the next step isn’t obvious. Worse, when they do what they believe is logical and the software doesn’t understand their intent.

That brings me back to banking software. As an industry, we have some of the oldest software around. Some core systems are pushing 40 years, back when IBM green screens were still displayed on a green screen. In defense of elder software, some of it is pretty well designed. Sadly, while it has served banks well, it is now desperately in need of an upgrade. Financial institutions are embracing the need to move towards more contemporary software (with things like relational databases and configurable workflows), and that is great. Even so, much of the “new” software in our industry still assumes that users will undergo extensive training before they are productive.

In the coming years, expect to see employees rebel against the status quo. I’ve noticed increasing frequency with which employees will choose to complete some tasks on their mobile device instead of their desktop because it is faster and easier. Yes, I realize that sometimes it is an excuse to update Facebook or Pinterest, but there are also some legitimate cases. I expect the number of times where using a mobile device to increase productivity will continue to grow.

The revolution in software usability has begun. The companies and developers who stick with the old line will see mass migration from their platforms. Those who embrace a model where user experience is as important as what’s under the covers will see their market share flourish. The lesson in all of this is that all software will be impacted by increasing consumer expectations, not just mobile banking apps. You’ll soon see rebellion on the floor where employees demand software that doesn’t work against them.

Eric Lindeen is marketing director for Zoot Enterprises Inc., a provider of loan origination, account acquisition and credit risk management solutions for large financial institutions. You can follow him on Twitter @EricLindeen. Visit Zoot’s Credit Strategy Session on PaymentsJournal.