How to build the best solution for the end user
Software development based on data. It sounds logical, but it's not yet commonplace in FinTech. VI Company's Kevin Wareman explains why it's THE way to achieve the goals of financial organizations. Kevin leads the Strategy & Consultancy Team at VI Company. He works daily with teams of developers and UI/UX designers, developing FinTech software the data-driven way.
What does data-driven mean?
'Instead of relying on intuition or gut feeling, or being influenced by what the competitor is doing, modern organizations are most effective by making decisions based on facts. Facts based on data.' There is more data now than ever. By 2025, 181 zettabytes of data are expected to be in circulation worldwide. A number with 21 zeros that continues to grow every year; in 2022 it was 97 ZB. And that data is worth money, lots of money. Back in 2017, The Economist headlined that the world's most valuable commodity is no longer oil, but data. Big data. 'Data-driven organizations make better decisions through insights from data and are better able to monitor the market and respond to it on time. Thus, they achieve better performance and more profit. So data-driven software development is a logical step.' Data-driven software development is the process where data is the key driver of design and development decisions.
Why data-driven development?
Data-driven software development helps developers find potential problems, prioritize the most valuable features, and improve the quality of output. It provides informed decisions about the design and functionality of solutions. Which also allows them to be continuously improved. 'The retail market lies far ahead with e-commerce. We learn from their methodologies, with the end user in mind. The FinTech market is quite different. There is still a lot of looking at each other and compliancy is often an inhibiting factor, but we still recommend working based on data as well.' At the retail level, you see banks, for example, already achieving great success, such as with Tikkie. Something that was once started as a trial balloon, by an agile team. 'They should be proud of that, to work this way. This is also how we like to work with our customers.'
How do you get the right data?
To get to the right data, you can collect information qualitatively and quantitatively. Qualitatively through interviews or by having users test existing applications. Quantitatively, for example, based on analytics. Important is that you always do a baseline measurement first. We often collect qualitative data by putting together panels and having them run through scenarios. By asking open questions and having them walk through an application. That way we first collect results passively, and then actively. So that we can eventually work with a partner party, on the customer side, to look at the analytics, for example. Our big advantage here is our knowledge of the financial sector.' In practice, this means that VI Company thinks along about specific KPIs, such as: increasing the conversion rate (trade conversion) or optimizing the customer experience, distinguishing between the novice and experienced investor.
What are the benefits?
'What we find out based on data is essential. The right approach is demonstrable AND the results are measurable.' We live in a world where it is no longer necessary to make decisions based on assumptions. The risks of heading into a solution direction too quickly, without testing whether that is the solution to the problem, are great. 'You throw away your investment of time and money. Or you drive visitors away. Without measurability, you're sailing blind.' Moreover: 'With data-driven software development, you switch better on two levels. First, you’ll be faster to find out what the real problem is. Whether what you came up with is something that's really going to help you. Second, it helps you discover whether the solution you have in mind is already there and, if so, how to make it even better. Regardless of what level you're acting on, it will always ensure that you save time and cost.'
What are the challenges?
'We want to challenge FinTech companies to break their default way of thinking and working. So not to act like: We've always done it this way, our competitor does it too. Because we can look in on multiple clients, we see what's going on in the market and where we can make a difference.' It's not just the mindset in the FinTech industry; compliance also plays a role. 'The legal challenge with financials is that data collection is often not allowed. We are not allowed to use general analytics, only internal tools, and usually only in small proportions. Contact with customers is also not appreciated. Whereas I think end users actually appreciate being approached to make the experience better.'
Who are we doing it for?
The advantage for FinTech organizations is that with a data-driven approach, they have way more leverage to justify their investment. It's better for developers as well, and the value for the customer is much greater. 'Our UI and UX designers have been thinking and working in this data-driven method for a long time, and now we are embedding it more and more in our workflow. With data-driven development, we make a better solution for our customers. Well, actually for the customer's customer. That is sometimes forgotten. But that is ultimately who we are doing it for.’
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