In our day and age, everyone is racing towards creating the smoothest, most hassle-free customer experiences. Banks are no exception to this rule.
The idea of introducing hurdles into the customer experience might sound a bit backward. It’s easy to think of friction as something to avoid at all costs, especially when providing that quick and easy experience is the gold standard. But, as we’ll discuss today, not all friction is the enemy.
In fact, friction isn’t inherently bad at all. It’s all about how it’s used.
Friction Isn’t a Dirty Word
We often aim to cut it out of the equation entirely, especially in banking, where the race is on to make transactions as speedy as possible. But, there are many times at which a little resistance to the banking experience is essential. The key lies in understanding when and where to add that resistance.
In the rush to provide a frictionless experience, financial institutions can sometimes skip over important considerations. In a lot of ways, security and the well-being of customers is actually reliant on a degree of friction.
Take, for example, the ease with which someone can access their funds to complete a transaction. It’s super convenient… until that person starts indulging harmful habits like problem gambling. This is where a dash of artificial friction— like a delay before a transaction goes through or an extra step of verification — can be a smart move. It forces a moment of pause, a breather for customers to rethink potentially impulsive decisions that could hurt them financially in the long run.
That’s one example. However, strategically deploying positive friction points can make a world of difference in banking. It will turn potential pitfalls into powerful safeguards for customers. The trick isn’t to eliminate friction but to know when a bit of resistance can actually enrich the customer experience, offering protection and pause where it’s most needed.
Good for Business, Great for Banks
Thoughtfully placed friction isn’t just about safeguarding customers. It’s also a win for merchants and banks.
For retailers and other merchants, it means customers are more likely to make purchases they’re confident about. It will help cut down on buyer’s remorse, which is one of the leading causes of returns and chargebacks. These are more than just a headache to process; they can also damage the relationship between customers and merchants.
Banks, too, stand to gain from strategically placed speed bumps. Fewer chargebacks mean less administration and a smoother operation. Plus, it avoids the awkward situation of dealing with disputes over small transactions.
In cases of low-dollar transactions, it’s often easier for the bank just to simply reimburse merchants from their own pocket. They eat the cost of the dispute, rather than go through the rigmarole of a formal chargeback process. And, let’s not forget about security. Adding layers of verification can make it tougher for fraudsters to break through. This helps ensure that customers’ accounts are safe from unauthorized access.
Finding the Sweet Spot
The drive towards making banking a smoother process isn’t going anywhere (nor should it). But it’s important to remember that a bit of well-placed friction can be a force for good.
Again, it’s about striking the perfect balance. Institutions should seek to weave in just enough resistance to protect and cause a moment’s pause, without turning the process into an obstacle course.
Making distinctions between the kind of friction that frustrates on one hand, and the kind that safeguards on the other, helps create a banking experience that’s more than just “efficient.” It’s also secure and considerate.
It’s a nuanced approach, demanding a delicate balance of forces. But, it’s an approach that acknowledges the complexity of our financial lives and the need for a banking experience that supports us, at every step of the way.
