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An interesting 'interest'-feature

2023/03/31 #uiux

Peaking my interest

As an expat one inevitably collects a myriad of bank accounts and payment apps from all over the world. After all, one of the first things one needs to do when moving to a new country is open up a bank account to pay rent (and closing them after one has moved away is easier said than done). What might sound like a tax reporting nightmare to some (I feel for you US citizens) can actually be a blessing in disguise for people like me. After all, apps from banks, payment providers and other financial services are of special interest to me not only because I have worked for a fintech startup for over three years but also because it is fascinating to see them navigate within a heavily regulated environment. And there is no better way to stay on top of current developments than experiencing the offering of so many different competitors first-hand as a customer.

Online direct banks have been especially interesting players to keep an eye on in that respect as they are more willing to try out new approaches both when it comes to their business models as well as the way they expect their customers to interact with their products. One of those more innovative banks I have an account with is Wise (formerly called TransferWise until their 2021 rebranding) and when Wise emailed me about a new feature called “Interest” a few months ago I found it noteworthy enough to investigate further.

A different 'Interest'

Put plainly, 'Interest' is Wise's version of regular bank's savings account. If you switch part or all of your balance to 'Interest', Wise invests your money in an interest-earning fund which tracks the central bank's interest rate while keeping your money available to you at all times. While the benefit for the user is supposed to be the experience of a regular savings account but with higher interest rates, legally it is not quite so simple. After all, it's not Wise giving you a fixed interest rate for keeping a balance in your account that they can invest and profit off of themselves (the regular bank model) but rather yourself investing your balance in an interest-earning fund at your own risk through Wise. As such, all the regulatory obligations for investments apply to Wise the same way they do to any other online broker.

Nice, but...

I got access to the feature shortly after the recent redesign of Wise's branding got rolled out to their iOS app so I was especially curious to see how their new UI lends itself to this delicate balancing act of complying with the stringent regulatory frameworks without becoming overly complicated and user unfriendly. Here are the screenshots showing the full happy path I experienced when going through the process of activating 'Interest' for my account:

Overall, I must say that I was impressed. On the face of it, I think Wise has done a tremendous job at keeping the process of changing a balance to 'Interest' quite simple. I counted a minimum of 8 pages the user has to go through - not bad considering how much information has to be conveyed due to the regulatory surroundings and how many options the user has (such as choosing which balance the change should affect, if all or only parts of a balance should be changed, citizenship, taxability in more than one country, ...). Even still, this is a good lesson in not trying to do too much on a single screen but rather split it up into comprehensible chunks.

...the devil is in the details

Their new flat look seems to work in favor of a minimalistic design approach focusing on the content which I love (I am the first to admit that I am a sucker for simple user interfaces without much clutter). But when looking a bit more closely at how Wise has achieved this clean look and feel things get a bit more nuanced. As it turns out, most of the information that is legally required to be shown to (and accepted by) the user if hidden behind pop-ups and links to web content. This includes the terms and conditions, the fund prospectus and the key information document about the fund the user is investing. Abstracting the complex underlying technicalities for the user is a very difficult task and it's extremely hard to find the right balance or to even know where to look for it. Go to far and you stretch the definition of informed consent. Abstract too little and the user gets overwhelmed by the amount of information and feels like it doesn't even make sense to try to understand what is going on.

A problem without a solution?

Just like this, what seemed clean and simple at first quickly becomes complicated and scattered around when taking a closer look. It's no wonder since laws and regulations (thankfully) require brokers to be very transparent about the nature of the products they are selling which means that there is little to no leeway in how things like the fund prospectus or key information document look. However, I still think there is a better way to deal with this than to only include extremely limited information within the app itself and to simply link out to those documents for everything else.

One better way to deal with this could be to offer approachable explainers alongside or even within those legal documents, guiding the user through the gist of what they are saying and putting it into context without abstracting them to just a few bullet points. Of course this would require closer integration between Wise and the legally responsible provider of such information (in this case the issuing company Blackrock). To be fair to Wise however, I am not sure there even is a satisfying design solution for this problem - I just do not think that Wise has solved it here either.

A pleasant surprise

After going through the process of changing my balance to 'Interest' I wanted to revert my account back to its regular setting. I wasn’t sure how the app would handle this and if I might not be able to access those settings until my prior change had been completed. In the past I have seen and experienced countless instances of keeping your application in some sort of limbo for the time it takes for them to process it instead of giving the user the option to revert back to the original state or to simply cancel the application. To my pleasant surprise, there was no such issue here and changing back to a cash balance was extremely straightforward - consisting of only three pages. Take a look at the screenshots I took of the entire process:

Take aways

This concludes my little investigation into Wise's new 'Interest'-feature. In the end there are several lessons I take away from this exercise: