How Design Thinking Can Power Payments Innovation

How Design Thinking Can Power Payments Innovation

How Design Thinking Can Power Payments Innovation

Krista Kostuch

Krista Kostuch

Krista Kostuch is director of user experience for the Issuer Product Group at TSYS. She leads a team of UX researchers and architects who design innovative payment solutions.

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When it comes to innovation in payments, there is an enormous amount of power and potential with the practice of design thinking.

One of the early pioneers of design thinking, Tim Brown, describes it as "a human-centered and collaborative approach to problem solving, using a design mindset to solve complex problems." As CEO of IDEO, one of the original Silicon Valley design and consulting firms, he and his team initially used design thinking to create consumer goods like toothbrushes but eventually expanded into digital experiences, services and environments.

So what does design thinking have to offer payments? The first thing to note is that it is an approach, not a process. Think of it more as a flexible system of phases, with pieces and parts that overlap and are applied as needed. (See figure 1). This user-centered approach starts with gathering user data, creating design artifacts that help teams understand how designs address user needs, and then testing those designs with users.

But design thinking has a way of changing the culture and mindset of any organization, whether it's consumer-facing or not. It allows us to ask the right questions and think about the people using products and services more than the 1s and 0s behind it all.

Design Thinking 101. This chart shows a circular diagram that gives 6 phases of the design process: Empathize, Define, Ideate, Prototype, Test and Implement.

It's true that this way of thinking may require more time up front in a product development life cycle. However, it allows us to fail early and discover that our assumptions might be wrong, which saves us time and money in the long run. There are more cycles of success and failure, and the organization must shift its expectations to encourage many rapid cycles of exploration, failure and success. We learn from our mistakes and develop a product that improves as it is built, progressing to excellence and leaving mistakes behind.

With this approach, great ideas are going to emerge and help a payments organization succeed or improve the bottom line.

Design for the bottom line

Top design firms have recently provided scientific proof that design thinking translates to a substantial business impact. 

Recently, the digital product design firm InVision published a report that surveyed thousands of companies to explore the relationship between design practices and business performance. It concluded that "those dominating their industries are the ones treating the screen like the most important place on Earth. In fact, companies with high design maturity see cost savings, revenue gains, and brand and market position improvements as a result of their design efforts."

McKinsey & Company found a similar conclusion in its report, concluding that companies that are excelling adopt an analytical approach to design, put the user experience front and center, nurture top design talent and empower them in cross-functional teams. Moreover, they iterate, test and learn rapidly, incorporating user insights from the first idea until long after the launch.

However, InVision found that the banking industry lags behind when it comes to design maturity, and McKinsey reported that many companies have been slow to catch up. And more than 40% of the companies McKinsey surveyed still aren't talking to their end users during development.

This data tells us that now, more than ever, we need to implement design thinking and human-centered design into our world of digital payments. Whether it's a consumer-facing card-management application, or an enterprise data and analytics platform, there are so many new, complex interactions essential to completing tasks within the ecosystem of payment products and services.

Inclusive approach to design

Design thinking is based on the premise that when we take the time, working together, to truly understand our audience — what they need and what will delight them — we can create something better, something different, or something that no one else has done. Note that together is the key word and fuels the power of design thinking.

It's an inclusive approach to design with a focus on not only who you're designing for, but also who you're designing with. In the digital world of design, we need ideas from business, technology and design teams. These three diverse segments offer distinctly different ways of thinking, thus pushing our creative boundaries beyond what we are able to do alone. It also allows us to go past the obvious, leveraging collective expertise and establishing a shared language while creating buy-in amongst your team.

Given the power behind design thinking, the potential for innovation is huge, especially in the payments industry.  It allows the best ideas to surface from a diverse group of skilled team members — reflective of the population making payments out in the 'real world' — and to receive the most comprehensive feedback. It also enables and increases our chances to create something no one else in the industry has done before. 

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by Krista

Krista Kostuch

Krista Kostuch is director of user experience for the Issuer Product Group at TSYS. She leads a team of UX researchers and architects who design innovative payment solutions. She also chairs the Enterprise UX Forum that is leading the way in the institutionalization of user experience at TSYS. Kostuch is a certified experience and usability analyst who has more than 15 years of practicing user-centered design within the financial industry.

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