UX Research: Digital Incentives Study (2024)

TLDR: A generative/discovery research study that informed the bank’s strategic direction. The goal was to understand the current client sentiment on digital incentives and their preferences in the context of banking. It served as a foundational resource for various stakeholders in the digital department to understand the current landscape and identify key areas of focus, considering the bank’s objective is to increase digital adoption and reduce frontline costs.

My role: Lead Researcher

Background

The bank’s primary objective is to increase client adoption of digital self-serve services to reduce frontline costs (e.g., branch and call center expenses). This involves migrating more transactions to digital channels to achieve cost savings.

As part of the Digital First initiative, stakeholders sought to explore digital incentives space to attract and retain clients on the bank’s digital channels (online and mobile banking). They approached us for research insights to inform strategic direction.

digital incentive
brainstorm
analysis

Approach, Method, and Analysis

The research ask was broad and vague (e.g., How can we use digital incentives to encourage clients to adopt and engage with digital banking?). I proposed a funneled approach—a two-phase research strategy. The first phase (which was this study) would aim to broadly understand the current incentive landscape clients are in and assess their sentiment toward various digital incentive types. The second phase would involve testing behaviourally informed interventions with the specific incentive types we would prioritize.

In the first phase, I conducted a general online survey (n=400) to gauge clients' engagement with different digital incentive features available in the market and their preferences for digital incentives in everyday banking. The survey collected both qualitative and quantitative responses.

For analysis, I used qualitative methods (e.g., thematic analysis) to understand, in clients' own words, why they preferred certain incentive types. I also applied quantitative methods (e.g., MaxDiff analysis, cross tabs and segment comparison) to identify distinct preferences and patterns across client segments. These segments were not limited to basic demographics but also included behavioural factors such as digital activeness, payment behaviour, and deposit behaviour.

Results

While stakeholders were initially interested in segmenting clients by age or income, one of the key findings of this study was that, among existing digital banking users, there were no significant differences in incentive preferences across demographic segments.

I recommended a different approach to client segmentation—rather than relying on demographics or a basic digital vs. non-digital distinction, we should take a deeper dive into clients’ digital banking behaviour. I proposed a behaviourally informed segmentation strategy, integrating transaction data and digital user behavioural data (e.g., clickstream data) to analyze clients’ overall behaviour and tendencies. This approach would enable the delivery of context-based incentives tailored to how clients interact with digital banking.

I also suggested actionable next steps for the stakeholders (i.e., So what’s next after this research study?):

  • Determine which incentives/type(s) we would like to explore further

  • Refine details of the incentives while gauging feasibility and capability with relevant stakeholders (e.g., tech)

  • Test the refined version with our clients to gauge their preferences and investigate their decision-making behaviour. Examples of potential research questions could be (but not limited to):

    • Do clients prefer consecutive rewards or one-time rewards if the total amount would be the same or larger?

    • If we provide a description of equivalent dollar value for reward points or promotional interest rate incentives, would clients still prefer cash rewards or other rewards?

    • Does the timing of introducing incentives matter? When is the right time to intervene and present the incentives?

Impact

This study enabled stakeholders to validate their assumptions regarding digital incentives, leading to stakeholder buy-in for the recommended next steps. This was the first discovery research report on digital incentives, which served as a foundational resource for various teams in the digital department to understand the current landscape and identify key areas of focus.