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to Invest in Usability?
Harrison (guest author)
In 1998, James Gleick wrote a book entitled "Faster" telling us of how the world is speeding up, time is becoming an ever increasing commodity and how little we seem to have left of it…
Some financial information is useless in seconds these days and while the world seems to have access to "real time" information, not that many people use it - first they have to understand it and that mean presenting it in an understandable and usable fashion…
Making decisions regarding your investments is difficult,
even during the best of times, and it is interesting to look at the reasons and drivers behind
"putting your money where your mouth is". Usability, I believe, is a key part of the
investment decision process. In an increasingly complex and technological world, a lot of
people are perusing, gathering, and analyzing financial information using
the internet. This is often the key material that helps people make their
investment decisions in one particular way or another.
After spending the last 7 years
putting web strategies to the test for financial institutions, banks and fund managers, I
have started thinking a lot about how information and its presentation play a role in turning viewers, or "viewsers", into customers and investors.
Until just recently, I was unaware of how important it is! I now find that others, and particularly
WebWord.com, are asking questions about the subject -- asking the very same questions I have asked
before. How does usability play a role in making investment decisions?
Investing, Usability, and the UK
Investing, especially in the UK, is essentially a lot of leg-work for the people who know little of finance or the finance industry. Indeed, only a fair percentage of people in the UK bother to invest at all. Most are happy casting their hard earned cash at credit cards, personal loans and the like which cost a
People are often bemused and confused by something I like to call "wicked advertising". Fund managers often plaster us with compound and cumulative statistics, clever emotional strategies and awards that seemingly everyone appears to win. Even if you are looking at bank accounts or credit cards you are presented with gross and not net interest rates, special introductory offers and initial transfer discounts. This just lulls many people into a false sense of security.
The web, in all of its complexity, does present an opportunity to disseminate financial information of various types and indeed has helped to shape a new type of investor. Investment related or centred sites of all types are continuing to help investors see through the multi-million pound marketing campaigns and slight of hand tactics employed by investment providers.
Usability, albeit for a small number of us, plays an important role in effectively demystifying investment. Investment management companies and financial portals akin to
The Motley Fool and Interactive Investor in the UK are also helping to make investment available to everyone regardless of class etc, etc.
Investment decisions are often about mapping relationships between multiple sets of data. Data which is important enough to make us buy or sell, invest or dispel. Often, and in many cases on the web there appear sets of data, but these are frequently disparate and no advantage is gained from correlation or comparison, leaving only question marks and
There has been a speedy cultural change regarding investment in the UK. Many companies and individuals now talk of the Empowered Investor. Individuals who don't trust companies or their investment products until they and they alone have done the research and know everything there is to know. Historically, individuals have used financial advisors - people who know the ins and outs of investment very well and can guide people through the proverbial maze, but with many taking huge profits and premiums at the cost of the
investors. Roles have changed and disintermediation has been effectively removing financial advisors from the equation. I would be willing to bet that the financial advisors have lost out in proportion to the increasing number of investors, but
unfortunately I don't have any statistics to hand.
Giving people the tools to reach empowerment is one thing, getting them there is another. And this I argue, is exactly where usability plays its key role in influencing investment. I had some years ago perceived usability playing a dual role in investment, but then I found I had overlooked a third interesting and seemingly obvious twist. A twist which had initially remained hidden.
These influences, or spheres are:
The way in which fund managers, banks and mutual funds present information pertaining to their very own products is key to the uptake of their products. As one focus group participant put it "How can we be expected to give them money, if they can't build a decent website…"
Portals and Infomediaries
Portals such as The Motley Fool or Interactive Investor in the UK provide investment and financially related information of all types across nearly all products. Information dissemination and empowering the investor are their goals and they aren't doing a bad job either.
The way in which they provide and present information is crucial to the investor understanding value and influencing the decisions they make.
The third and probably most interesting sphere is that of all companies - companies who use the web or internet as their business. If a company has customers and its primary or even secondary channel is the web, then its services better be usable and intuitive or else users and potential customers will turn away in droves to look for an alternative service that fulfils their needs and goals.
If I, as an investor in
Amazon.com, find their site unusable, then why should I throw my savings and hard earned cash at it? If revenues are dependent on and at the fate of the terrible usability demons lurking in the lifeblood processes of their site - they will suffer and so will every investor.
Like many before me, I use Amazon as an example of simplistic transactional processing which works - but you would be surprised just how many companies screw
up these processes and the usability, or just plainly ignore it. Shouting "it can wait until after our launch" isn't good enough anymore. Luckily, Amazon do it fairly right!
All investors seem
different. They do things differently, but they all subscribe to common processes, which we tend to overlook while providing them information of one sort or another.
I am talking about finding common processes that people use without really thinking or knowing
it. After spending some time researching this issue it became clear that investors want to make decisions, hence the use of financial advisors, but in the new world of investing, they are taking it upon themselves to make more money by cutting out middlemen and doing it
themselves. Usability is a big part of helping them to understand and act upon information that they gather. Presenting information in an intuitive fashion and allowing them to manipulate it can effectively be supporting their decision making process. This part of the puzzle has come to be known as Decision Support.
This cycle began life as a chain, a linear process which was drawn from many focus groups and interview sessions. Asking people what they want to do, what pieces of information fit their somewhat blank jigsaw puzzle. It is about what people go through during
This process consists of various phases, each of which has to be satisfied to some degree before the next could be considered, culminating in a decision.
As this process developed, it became clear that it wasn't a totally linear process and that it also had the capacity to move in both directions or at least between a few key areas.
This, after some experimentation and following a number of investors through their investment processes began to turn into a cycle. This cycle was repetitive and was also seen to be used for every individual investment people made, but only parts of it - primarily the analysis/evaluation, trading and monitoring parts were repeated.
People often have to re-evaluate their investment and given the markets of the past year this is not surprising. This re-evaluation created an almost bouncing effect, where they checked investments against their primary goals. If it wasn't doing what they wanted, then it was sold and the cycle was ended, beginning again with another new investment, or worse, the realisation that they needed to take a different approach.
In essence and hopefully through a little textual evocation - albeit a short one, I have convinced people that usability is far reaching into the investment market. In times when the customer is god, companies reputations and representation of information through whatever medium is more important now than ever…especially using the web. Hopefully one or two people will spot that and think about it next time their website is down, or if they are trying to hide information from the masses - they're a lot more careful than people think!