9 Pitfalls of Financial Web Applications and How to Avoid Them

Digital banking and financial applications are becoming increasingly integral to our daily lives. Today, most Americans have used digital banking in the past year, with a significant majority (71 percent) preferring to manage their bank accounts through mobile apps or computers. In fact, millennials lead this trend (74 percent), while Generation Z follows closely behind (68 percent) . By 2025, around 4.5 billion people globally are expected to use mobile payments.  

Given this growth, it’s crucial to develop financial web applications correctly. Despite many successful implementations, there are still nine common pitfalls in financial web applications, ranging from poor user experience to security and scalability issues. This blog explores these pitfalls and offers strategies to avoid them.

Security Vulnerabilities

Security is paramount in financial applications. Unfortunately, even major institutions have faced breaches. For example, in May 2019, First American Financial Corp exposed 885 million credit card applications due to a business logic flaw on their website.  Security threats like phishing, ransomware, malware, password guessing, DDoS attacks, undiscovered data leaks, and insecure API configurations are common.

To avoid these security pitfalls:

While the security landscape is ever evolving and more complex to manage, there are some fundamental best practices to deploy to limit security vulnerabilities. A few of these are listed below:

1. Implement end-to-end encryption to protect data during transmission.
2. Conduct regular security audits and penetration testing to identify and mitigate vulnerabilities.
3. Use multi-factor authentication (MFA) to add an extra layer of security.
4. Provide employee training on security best practices to prevent internal errors that could lead to data leaks.

Poor User Experience (UX)

A poor user experience can lead to user frustration, abandonment, and reduced conversion rates. According to Google, 57% of users won’t recommend a business with a poorly designed mobile site.  Common UX issues include biometric login failures, app freezing, and inadequate reporting. For instance, some banking apps have issues with checking deposits and providing total balance visibility.

To improve UX:

1. Conduct user research and usability testing to understand user needs and pain points.
2. Read and respond to reviews to address user concerns promptly.
3. Ensure intuitive and consistent navigation to enhance ease of use.
4. Implement responsive design to ensure the app works well on all devices.
5. Regularly update the design based on user feedback to keep the app relevant and user-friendly.

Lack of Accessibility

Accessibility is a big issue. According to the American Bankers Association, 73% of Americans access their bank accounts online, BUT 27% of adults have disabilities that prevent them from doing so. And, more than half of all banks fail to meet customer needs due to a lack of digital accessibility.

To enhance accessibility:

The best way to get started is to consider the needs of users and follow these basic principles and guidelines when designing your application:

1. Follow WCAG guidelines to make web content accessible to people with disabilities.
2. Ensure color contrast meets accessibility standards for readability.
3. Provide accessible login portals that do not rely solely on cognitive function tests.
4. Include semantic markup for better navigation by assistive technologies.
5. Provide alternative text for images to convey information through screen readers.
6. Ensure keyboard navigability for users who cannot use a mouse.
7. Test with accessibility tools and real users with disabilities to identify and fix issues early.

Inadequate Performance and Scalability

Performance issues like slow load times and downtime during peak usage can significantly impact user experience. A one-second delay in page load time can lead to a 7% reduction in conversions .

To improve performance and scalability:

1. Optimize server and client-side performance to ensure fast load times.
2. Utilize content delivery networks (CDNs) to reduce latency.
3. Implement scalable infrastructure using cloud services to handle variable loads.
4. Regularly monitor and stress test the application to identify and address performance bottlenecks.
5. Use tools like Pagespeed Insights and GTMetrix to measure your website performance

Complex or Lengthy Onboarding Processes

Complex onboarding processes can deter new users. Research by Deloitte revealed that a whopping 40% of consumers have abandoned a bank onboarding process. When asked the most common culprit, users cited overly time consuming paperwork and too many personal questions. By contracts, according to Invesp, companies who optimize and simplify their onboarding process can see a 15% increase in user engagement and retention.

To streamline onboarding:

Some basic guidelines to streamline onboarding are listed below. But don’t go this alone. Our UI/UX designers at Unosquare can help you understand user drop-off and design an optimal onboarding experience. The guidelines are to:

1. Gain insights into customer onboarding behavior to identify friction points.
2. Simplify registration forms and processes by removing redundant steps.
3. Offer social login options to speed up the process.
4. Provide clear instructions and guided tutorials to assist users.
5. Allow users to save progress and return later to complete the process at their convenience.

Insufficient Customer Support

Poor customer support can significantly impact user satisfaction, with 56% of customers ceasing to use a financial service due to inadequate support.

To enhance customer support:

1. Offer multiple support channels such as chat, email, and phone.
2. Implement AI-powered chatbots for immediate assistance.
3. Provide a comprehensive FAQ and knowledge base to help users find answers quickly.
4. Regularly train support staff and monitor their performance to ensure high-quality service.

Non-compliance with Regulatory Standards

Compliance with regulations like GDPR and PCI DSS is essential to avoid legal issues and maintain trust. Non-compliance can result in significant fines and reputational damage.

To ensure compliance:

1. Stay updated with relevant regulations and implement necessary measures.
2. Conduct regular compliance audits to identify and rectify non-compliance issues.
3. Seek legal counsel for regulatory guidance to navigate complex legal landscapes.

Poor Integration with Third-Party Services

Integrating third-party services can enhance functionality but also presents challenges such as ensuring compatibility and maintaining data security.

To avoid integration pitfalls:

1. Choose reliable and reputable third-party providers to minimize risks.
2. Ensure secure and seamless API integrations to protect data and maintain functionality.
3. Regularly test and maintain integrations to ensure they continue to meet business needs.
4. Provide fallback options in case of third-party failures to ensure continuity.

Ineffective Data Management and Analytics

Effective data management is crucial for accuracy and insights. Poor data management can lead to inconsistencies and missed opportunities.

To improve data management:

1. Implement robust data management practices to ensure data integrity.
2. Ensure data accuracy and consistency across all systems.
3. Utilize advanced analytics tools to gain actionable insights.
4. Regularly review and update data policies to stay current with best practices.

Conclusion

In summary, developing a successful financial application involves avoiding common pitfalls related to security, user experience, accessibility, performance, onboarding, customer support, compliance, integration, and data management. By proactively addressing these issues, financial institutions can enhance user satisfaction, ensure security, and drive growth.

Building a FinTech application is a substantial investment, often requiring between 2,000 to 3,500 hours for development. Engaging with experienced professionals and continuously adapting to user feedback and technological advancements can help create a robust and user-friendly financial application.  With more than 2,500 projects under our belt and a focus on financial services and Fintech, we have the expertise you need to ensure you not only avoid common pitfalls, but that you actually thrive and grow. Contact us if you have a Fintech application you need to design or build.