Designing the Smart Bank

Contact Us

Designing the Smart Bank

How banks can deliver the experience digitally native customers want.

Earlier this year, two reports were published highlighting the banking industry’s vulnerability when it comes to millennials (people born between 1980 and 2000). Accenture’s Digital Disruption in Banking and Scratch’s Millennial Disruption Index both place banks at a high risk for disruption. The numbers are telling:


Millennials think all banks have the same offerings

Scratch's Millenial Disruption Index


Canadian millennials say they would be likely to bank with a non-financial service company

Digital Disruption in Banking


Estimated percentage of banking revenues that will be at risk by 2020 due to disruption

Digital Disruption in Banking

The financial industry is facing a significant challenge: how do banks adapt the way they do business to better serve and connect with their digitally native customers?

At Heist Data + Design, we love the challenge of solving complicated customer experience problems. Taking a design thinking approach, we set out to discover what it is young adults want from their banks and identify new opportunities to evolve the customer experience and better meet the needs of the millennial generation.

Over the course of three months, we connected with almost 400 millennial banking customers, bank employees, and other financial service professionals through targeted surveys and live, in-person interviews. Contrary to our initial hypothesis, young adults haven’t lost faith in their banks - only 2.9% of customers had a negative opinion of their financial institution. Canadian banks are highly trusted. That being said, nearly everyone we spoke with wants their bank to provide an experience that is more aligned with the way they live today.

Our research uncovered three Key Takeaways:

  • Young adults have a transactional relationship with their banks, which has created a gap between their needs and the services banks offer.
  • They want financial advice, strategies, and support but don’t see their banks as catalysts to financial well-being.
  • Day-to-day banking apps designed with customer empathy will better meet the needs of both young adults and banks.

There is no doubt that over the next 5 to 10 years innovations like wearable technology and digital currencies will play a major role in the evolution of banking. But when it comes to meeting the immediate needs of the millennial generation, the solution is much simpler. By redesigning the mobile-banking experience, Canada’s banks can reestablish their relationship with digitally native customers, continue to build on the trust they’ve earned, and empower young adults with the financial confidence that will make them valuable customers today and in the future.

The rise of transactional banking.

How the experience of being a banking customer has changed.

  • Branch-Centric Banking
  • Mobile-Centric Banking

Over the past two decades, financial institutions have introduced a slew of services designed to make day-to-day banking more convenient for their customers.

While the industry should be applauded for their track record of customer-centered innovation, it almost certainly came with unintended consequences. As convenience increased, customers relied less on local branches - opportunities for banks to deliver personalized support and build meaningful relationships with their customers started to disappear.

65% of Canadian retail banking customers view their relationship as transactional versus advice-driven.

Accenture 2014 North American Consumer Digital Banking Survey

For today's young adults, the banking experience is almost entirely transactional. Their most common day-to-day banking tasks take place on their laptops and smartphone, and when they do need help, they don't turn to their bank for support or guidance. In fact, according to CGI, only 7% of customers surveyed consult their bank for financial advice.

This change in customer behaviour has amplified the disconnect between young customers and the banking industry. The value-added services that banks provide in-branch simply don’t reach customers whose banking experience centres around their phones.

Zeynep S.

“Oh yeah, I want to learn more [about finances], but I don’t even know where to start.”

Why customers want more from their banks.

The seven financial needs of knowledge-thirsty millennials.

Just because banking has become primarily a transactional service doesn’t mean young adults don’t want or need financial guidance. Due to a number of factors - the high cost of post-secondary education, record housing prices, the pressure to save for retirement - millennials have just as great a need for financial guidance as the generations that came before them.

Our interviews revealed seven key financial needs of millennials:

  1. Storage and access to their money
  2. The ability to transfer money to friends, family and colleagues
  3. A clearer understanding of the financial products that are available to them
  4. An easy way to pay bills and automate transactions
  5. Information on managing and reducing debt
  6. Saving strategies and support
  7. Ways to avoid big financial mistakes

Our survey participants and interviewees acknowledged that banks offer solutions that meet these needs, but primarily in-branch. Only a subset of these financial needs are being met by the digital banking ecosystem. The majority of young adults indicated that the digital transaction-focused services banks provide are far from perfect.

CGI’s Understanding Financial Customers in the Digital Era found that only 37% of customers are satisfied with the wealth-building advice they receive from their bank and only 34% believe their bank is doing a good job of telling them what they are spending their money on and how they can save. "Consumers are demanding services that go beyond meeting basic needs to ones that enhance the quality of their lives, such as advice on building wealth, budgeting, saving and paying off debt.”

This gap between need and service offering has reduced (and will continue to reduce) customers’ satisfaction with their banks while eroding loyalty as young adults look elsewhere for assistance.

Angeline T.

“I don’t talk to my bank because I feel like they would judge me. So there’s some insecurity. I don’t feel like they would take time to understand my needs or explain things in a way that I understand.”

Using mobile to create value for millennial banking customers.

Five key moments in the customer journey that banks should focus on to build relationships with mobile-centric customers.

Millennials have not given up on traditional banks - at least, not yet. But in order to keep that from happening, banks need to prove their worth as more than a storage facility for money. They’ll need to learn how to cultivate relationships with their digitally native customers that start within the confines of their mobile and online apps, and continue throughout the customer journey. They need to create a mobile-centric customer experience.

Our design sprints uncovered a number of ways that banks can use mobile to close the gap between the needs and wants of digitally native customers and the value that their mobile experiences offer.

Five key moments that banks should focus on to build relationships with mobile-centric millennials

Balance and activity inquiry

Saving and debt reduction


Education and support

Mobile payments and money transfers

1. Balance and activity inquiry

“The relationship I have with [my bank] is with an ATM interface and a website that’s pretty much a big spreadsheet - it’s not very personal.”Ksenija G.

According to a 2013 ING poll, 21% of respondents check their bank balance at least once a day and 55% do it at least once a week. We see this behaviour as a key opportunity for banks to deliver increased value and strengthen their relationship with young adults.

Financial Timeline

Open the account summary screen of most banking apps and you’ll be presented with a view that resembles a spreadsheet. Taking a cue from familiar social media apps, we envision a single timeline view that contains customers’ complete financial activity. This view would provide banks with the opportunity to incorporate contextually relevant support information more naturally.

By incorporating chequing, savings and credit account information into the timeline, customers can quickly view their entire financial story in one place.Colour and type play an important role in highlighting key milestones throughout the customer’s financial timeline.Contextually relevant links make information in the timeline not only informative, but actionable.

Make it visual

One common complaint we heard from customers was that banking apps are cold and unfriendly. By making the experience more visual, apps immediately become more engaging.

Trend spotting

Being able to quickly extract meaningful information is crucial for mobile-centric banking customers. Graphs and other forms of data visualizations give people the ability to identify trends in spending, saving and debt management that they can use to plan future financial activity.

2. Saving and debt reduction

“There is a lot I don’t know. If I have $100, what do I do with it? Still wouldn’t feel that is a convo I can have with banks. $500, or $1000 might change that. $100 doesn’t have any upswing, doesn’t make enough change.”Steve L.

Young adults have the perception that banks are primarily focused on helping people save for large goals - a down payment on a house, RESPs, retirement - things that cash-strapped 20-somethings know they’ll eventually want, but don’t seem immediately relevant.

There is, however, an opportunity for banks to help customers develop positive savings habits by creating tools and interfaces that encourage and motivate their customers to focus on smaller, more attainable goals. It starts by turning unfocused savings accounts into goal-oriented savings buckets.

Motivation is key

Motivational messaging and imagery plays an important role in encouraging young adults to contribute to their savings goals and reduce debt. Letting them know how far they’ve come, and how many contributions they have left, makes those goals more attainable.

Education through goal setting

Helping mobile-centric customers understand how to save is an important factor to increasing customer loyalty. Simple actions like getting them to name a goal, decide how much they want to save and when they want to reach their goal, banks can help customers plan an easy to follow contribution schedule.

The power of images

Images are a big motivational tool when it comes to encouraging people to save. That’s why we envision a savings experience that incorporates an image related to a customer’s goal. Now every time customers open their app, they’ll be reminded of what it is they are saving for and be more likely to put a little extra away every week.

3. Forecasting

“Everyone logs in to online banking to check where they are, they have to figure out what’s coming up, how much they have, and then they use another tool for forecasting. But if you can save me 10 minutes every week to look at my budget as I am going forward, that’s huge.”Adam W.

48% of millennials express an interest in real-time and forward-looking spending analysis and 67% want their bank to provide tools and services which help them create and monitor budgets.

Accenture 2014 North American Consumer Digital Banking Survey

Most banking apps give customers a very detailed look at what they spent yesterday. But when it comes to planning for tomorrow, people are forced to use third party tools or hacked together solutions. This is a key moment that customers want their banks to support. Customer data plays an important role in allowing banks to connect with customers in a personally relevant way and provide value that is less likely to be matched by third party apps.

Calendar Sync

Helping young adults budget around major social events should be made easier by allowing them to sync their calendars to their bank accounts. Whether it's a friend's birthday or a seasonal holiday, the app should flag upcoming events and suggest ways to save for the potential fluctuation in spending. Recurring financial moments—rent, bills—should also be added to further help young adults budget.

Payday Planning

Payday is when customers most commonly check their account balances and plan their next couple of weeks. Banks would greatly improve the experience if they not only organized their financial data around pay cycles, but allowed customers to automatically direct money to specific spending buckets or savings goals.

Budget Bucketing

Payday makes everyone’s bank account look great. But the truth is, a good chunk of that money is already accounted for. To figure out how much is free to spend and how much needs to be protected for rent, bills, groceries etc., customers divvy up their accounts into percentages. The problem is, most of this is done in their head or with spreadsheets. Following in the footsteps of innovators like Simple, banks should take this burden off customers by allowing them to compartmentalize their Everyday (chequing) account so that their billing expenses are safely separated from their spending money, which we’ve called Pocket Money.

Smart Spend Predictive Budgeting

Identifying trends and understanding their effect on a customer’s future financial health have traditionally fallen within the purview of financial advisors. But given the immense amount of data created by digital banking, more and more young adults expect banks to do something useful with that information. Based on people’s spending habits, banks should automatically analyze the week ahead and create a daily budget that would help customers save for the days they typically spend more.

4. Education and support

“I think I would find it helpful if at least the institution that you are doing business with provided you with information for making smart investments, or said ‘hey, this might be something worth looking at.”Adam P.

The move to transactional banking has left young adults thirsty for financial knowledge. Banks have tried to quench their thirst by creating a deep online (and deeper offline) library of content, calculators and FAQs, but much of it is impersonal and generic - and in the case of apps, non-existent. By integrating the wealth of knowledge that banks have into the day-to-day mobile banking experience, banks have the opportunity to provide personalized, contextual support at key moments of truth in a customer’s lifecycle.

Contextual advice

Integrate educational information directly into key moments in a customer’s activity feed. For instance, instead of just notifying someone that they got paid, nudging them to put some extra money away would help them achieve a specific goal sooner.


A common feature of most apps, notifications give banks the opportunity to help educate customers on actions they could be taking advantage of at moments when it’s most relevant.

Community Advisor Matching

Millennials, like most customers, don’t tend to openly talk about their finances. Using the power of community to overcome this social stigma will be an important aspect of banking in the future. Whether used as a motivational tool or as a way for consumers to find an advisor they’re comfortable working with, community-based messaging would give young adults the opportunity to learn from people in similar situations and give banks new inroads with their customers.

Advisor Hangouts

Embracing video chat would give banks and their advisors new opportunities to build connections with young adults in a way that feels personal and in tune with their life.

5. Mobile payments and money transfers

“It can take up to three days to email money to someone, but with this it would be instant - you’d just do it, and all on your mobile.”Adam W.

Money transfers and mobile payments are becoming increasingly important moments in the lives of young adults. While the battleground over the technical aspects of each are a hot topic, the experience surrounding these moments present banks with a unique opportunity to educate and connect with customers in meaningful ways that current third party apps can’t.

Money Transfers

Whether paying for their half of the rent, or splitting dinner with friends, young adults repeatedly expressed a need for money transfers to be quick, easy and instant - aspects most banks score low on at the moment. This will become a hotly contested area of banking, with companies like Facebook and Square seeking to entice customers away from the money transfer offerings of traditional banking institutions.

Mobile payments

Point of purchase gives banks a great opportunity to surface personal account and budgeting information that would help young adults get a better understanding of how their spending can impact their overall savings goals. Allowing people to use their phone to pay for items directly from pre-determined budget categories within their day-to-day account will make the mobile payment experience a powerful tool for fiscal responsibility.

Steve L.

“If I want to know how to save more money, I feel like [banks] wouldn’t want to help me with that. Too low level, beginner stuff.”

The high cost of doing nothing.

Five reasons why banks need to act now.

Nearly half of millennials asked are counting on tech startups to overhaul the way banks work.

Millenial Disruption Index

After emerging from the 2008 global financial crisis relatively unscathed, and currently reporting quarterly profits reaching the billions, it’s easy to assume big Canadian banks don’t have much reason to be concerned about their future. But failing to deliver on the needs of mobile-centric banking customers will lead to an unbundling of the services and expertise that were once the landmark of banks. Today, millennials are more open to looking elsewhere for help. Not surprisingly, a long list of suitors are emerging with modern attempts to satisfy their needs.

Five reasons why banks need to deliver on the needs of young adults now:

  • Threat of disruption due to unbundling of traditional banking services

    Services, one at a time, are being unbundled from traditional financial services companies and millennials are more than happy to experiment with their dollars.

    Mobile payments

    Paypal, Square, TELUS, Rogers, Starbucks, Apple

    Money management and budgeting, Level

    Advice and financial knowledge

    Edward Jones, Mortgage Brokers,

    Digital banks

    Tangerine, Simple

  • High customer acquisition cost

    Transactional banking is something that customers believe all banks do equally well, so banks are finding it increasingly difficult to differentiate themselves. They’re competing for new customers by cutting fees, offering high introductory rates or even ‘gifts’ such as iPads. This is leading to a commoditization of banking that undermines the value that was once the foundation of their industry, while reinforcing their sameness.

  • Lower customer loyalty

    While customer loyalty may seem strong (most customers say they’ve been at their current bank for 10+ years), the transactional banking model has left that loyalty on shaky ground. The relationships that once anchored customers to their banks are non-existent in the mobile banking experience. A 2013 Forrester study found that 1 in 8 online Canadians would consider switching banks if “another firm offered better mobile banking services.”

  • Increasingly difficult to upsell

    With a weaker relationship to lean on, it’s becoming increasingly difficult for banks to cross-sell millennials on new products such as investment or lending products. This is especially true for mobile-centric customers as the apps rarely include any reason for their customers to keep their financial services with a single institution.

  • Reduced switching costs

    “I have no loyalty to PC because they are an anonymous online entity that I have no relationship with….I would switch in a minute if it was easier and cheaper.” - Mike L

    The commoditization of financial services is starting to erode the commonly held belief that switching banks is difficult. According to a 3 year study conducted by Scratch, 1 in 3 millennials are open to switching banks in the next 90 days. Among 71% of people we surveyed who bank with 2 or more financial institutions, the move is seen as less a hard switch than a gradual transition.

The bottom line is that the banking industry’s inability to keep pace with changing consumer behaviour has led to a commoditization of their products and left them open to an unbundling of their services, two factors that will over time result in fewer customers and leaner quarterly reports.

“..we must challenge the status quo – challenge the rules so we can evolve while keeping the system safe and secure. Always adhering to the spirit of the rules but acknowledging they were written for different times.”

Banking Innovation: difficult, but not impossible – Peter Aceto, CEO Tangerine

Steering the ship.

How empathy and design thinking can help banks change course.

We recognize that change is no small task for Canada’s big banks. Industry regulations, legacy technical systems, and cumbersome internal processes make banking innovation difficult. But not impossible.

Using customer needs as their compass, banks like Tangerine are successfully chipping away at the industry anchors that have caused them to lose pace with their younger customers. And their Overall Customer Satisfaction Index Scores prove that it’s been worth the effort as they lead all midsize banks.

We believe design thinking and customer empathy is the means by which big Canadian banks can begin to change, both externally and internally. Rallying employees at all levels around the unique needs and behaviours of young adults will allow banks to evolve not only the customer experiences, but the processes and systems that deliver them.

The opportunities to use customer data to recommend the right lending, investment or insurance product, in the right context, and from a position of trust will make it worth the effort as today’s 20-somethings become tomorrow's entrepreneurs, home owners, parents and retirees.

Change won’t be easy. But as Peter Aceto, CEO of Tangerine, wrote in a recent blog post, “banking innovation is not easy, but the alternative, as far as we see it, is no longer an option.” We couldn’t agree more.

Let’s build the Smart Bank together.

We believe the mobile-banking experience has the power to change the way we spend, save and think about money. This case study only scratches the surface of the complicated issues presented by banking innovation. To really solve the problem, we need to work with banks. So let’s talk. Let’s dig into this problem together, and let’s create the smart bank of tomorrow.

To share your thoughts, questions or to talk about working together, contact:

Chris Hayes -

Scott MacGregor -

Twitter: @heistmade


Many thanks to all the wonderful people who answered our surveys, spent time chatting with us and contributed to this case study.