There is a key takeaway for executives from the recent financial mistake by Citibank: the importance of UI design. Even more important, decision-makers in financial institutions need to understand that the banking program they use matters, and a lot. If you don’t agree, ask Citibank, whose UI mistake cost them $500 million.
Top management and directives of financial institutions are well versed in the art of making money, but in today’s world, this is not enough to stay competitive. As Citibank’s case shows us, in a world driven by software, it is necessary that organizations understand the importance of using state-of-the-art software design.
Citibank could have easily avoided this mistake by not using a FinTech transaction software with a User Interface that looked from the 90s. If you are not familiar with what a User Interface is and are looking to understand why it is a major cause of Citibank’s mistake, this post is for you.
Citibank’s $900 Million Mistake
Before going into the details of the importance of UI in software design, let’s take a look at the story behind Citibank’s mistake transfer. It all starts in 2016 with a loan that Revlon, the beauty company, took. Citibank was Revlon’s agent throughout this loan. On August 11, 2020, Citibank was supposed to send interest payments for $7.8 million to creditors.
However, and here is where things start to get messy, when Citibank was supposed to pay the creditors, they sent the wrong amount of money. Instead of the original $7.8 million, they ended up transferring almost $900 million. The company quickly realized the mistake and was able to recover part of the transaction, but it was unable to recover $500 million. The company ended up paying their loan payments which were due in 2023.
It seems that some creditors, fearing that Revlon might not pay them because of their economic situation, decided to keep the money. For others, it seems that they sought this was actually a full payment of the loan in an anticipated manner; this was actually one of the legal arguments that some creditors used. Because they saw that the numbers added up exactly to what they were owed, they assumed that there was no mistake.
Judge Jesse Furman, in charge of the case, ruled against Citigroup after analyzing the situation. In his account of the case, he mentions that three people were involved in the process and in charge of approving the transaction to the Angelo Gordon lenders. So, how could such a mistake occur in the first place? There isn’t one single cause, but rather a series of unfortunate events. For a start, the banking program used had a poor User Interface. Second, Citibank’s contractor failed to do the transfer procedure correctly. Third, the people in charge of approving the procedure did not spot the mistake and instead approved the whole process.
Although the UI mistake was not the only cause of Citibank’s mistake, it was definitely an important part of the problem.
What Is a User Interface?
In short, a User Interface (UI) is what shows up on the screen of a computer when an application is being executed. In other words, this is the screen with which users interact with software. UIs have become very important, as they can help make the experience of an app smooth or traumatic for users. Some of the world’s most popular programs are known because of their user-centered UI.
Designing a powerful UI that everyone loves is both an art and a science. Designers don’t just focus on building pretty interfaces. They want to make sure that elements in a User Interface follow general principles of UX design to facilitate usability. This means using scientific principles that govern human behavior and make it intuitive for users to use an app, sometimes even highlighting the elements of a specific brand.
Build FinTech Software for Humans
One common mistake that many software engineers make when building a program is to think in terms of machines. This is one of the worst things to do in terms of building an app. Paraphrasing expert designer Don Norman, the design of anything, including software, needs to consider humans. This approach is known as human-centered design or user-centered design, and in the software development industry, it means putting the user in the loop.
Software companies shouldn’t just build tools. They need to build them thinking about the people that are going to use them. Failing to do so will surely result in poorly built products with lots of usability issues.
What Went Wrong With Citibank’s Banking Program?
As seen on judge Jesse Furman’s image of the banking software used by Citibank’s contractor, several factors were poorly considered or integrated into the User Interface:
- Lots of information presented with little to no hierarchical structure.
- Lack of colors to aware the users of potential risks or to signal that everything was in order.
- High level of complexity and lack of intuitiveness of the interface.
- No clear UX writing for users to understand what is expected of them throughout the transaction process.
By making use of these elements, software designers can make use of basic functionalities to help users navigate through the complexities of financial transactions. However, the FinTech tool used by Citibank seemed to lack even the most basic requirements of a friendly UI.
The Importance of UI Design in FinTech
Some of the best software tools in the world stand out because of their friendly User Interfaces. For industries like finance where having state-of-the-art tools is a necessity, not a luxury, companies must understand that they should use FinTech tools built by software development experts. Not doing so may result in costly mistakes.
Surprisingly, many directives in a number of industries fail to understand the importance of software design. Just take a look at Boeing’s software fiasco after trying to save some bucks in their airplane software. Although software rules the world, executives tend to bypass the importance of having a world-class digital product. Top software companies acknowledge the importance of Quality Assurance, and they help their clients understand this too.
