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(PART II) Your Path to a Successful Product with UXDA’s Financial Design Methodology: the Value Pyramid


(PART II) Your Path to a Successful Product with UXDA’s Financial Design Methodology: the Value Pyramid

Last week, we published the first article in a series in which we guide you through UXDA’s award-winning financial design methodology. If you missed it, go back to get specific tips and tricks for instant implementation. If you have already read it, let's move forward and learn how to increase the demand for your product and create an ultimate market advantage with the Product Value Pyramid.

This is Part II in a series of articles in which I reveal the key mechanisms that are the foundation of UXDA's unique Financial Design Methodology already used to create 60+ financial services. If you haven't done so already, check out Part I of this article about the Product Value Pyramid.


In the first part of the series, we analyzed the conditions under which some financial services are still in demand despite their outdated design and uncomfortable service, while others are on the verge of disappearing even while offering killer features.

These questions led me to create the Product Value Pyramid that consists of five stages. The basis is functionality, the stage at which most banks and vendors are stuck. The four other stages are closely connected to user experience and are practiced by enormously successful FinTechs and progressively thinking banks.


In the previous article, we covered the first two stages: functionality and usability. Following is a short description of each.

1. Functionality Stage

At the stage of market emergence, key decision-making criteria for buyers is determined by functionality. Functionality is used as the main unique feature of the product if it's among the first to the market. It's all about providing the desired result to the client by using the product features.

2. Usability Stage

As the demand for a product begins to grow, and the production technology or the provision of a service is stabilized, the market becomes interesting to competitors. At this stage, functionality loses its key advantage. The technology is steadily reproduced, and many more alternatives appear on the market. Manufacturers are beginning to think more and more about the convenience of their products or services.

Now, we move on to the three extra competitive advantages that make financial products a true “game changer.”

3rd Stage Aesthetics

Demand is growing along with competition, so more and more products with similar functionality and basic convenience enter the market. The product becomes interesting for the early majority, or the so-called pragmatists, who are convinced of its benefits and usability and will grow the market by another 34%.


Offering something special, something that can outcompete others, becomes really challenging. And, suddenly someone figures it all out: what if you offer users not just convenient function, but the opportunity to experience enjoyable emotions while using the product, and the market is introduced to not only functional and usable but also a more beautiful and appealing product?

Buyers gladly respond to this. They like that the product not only provides some benefits but also does it in a pleasant way, evoking positive emotions. So, aesthetics becomes the key competitive advantage of the product at this stage of the Product Value Pyramid.

An example from the auto industry

The production of the world's first affordable automobile─the Ford Model T─ended in 1927. Overall, 15 million of these first cars were produced. The demand grew from 10,000 vehicles produced in 1909 to more than 2 million produced in 1923. Such fantastic demand inevitably led to the emergence of new competitors and the transition of the market to the next stage.

Aesthetics had become one of the most important characteristics of new cars. Consumers increasingly chose to enjoy the design of the car as well as comfort. Driving became enjoyable, delighting the driver with positive emotions. As a result, in the 1930s, more and more sophisticated and stunning cars appeared on the market.


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What does this mean for banking?

Despite the fact that some banking products have not yet reached the Usability stage, advanced FinTech services care a lot about not only the ease of use, but also the Aesthetics of their digital services. By the reaction of their customers, they see that visually attractive financial products evoke more positive emotions than a template design. Perhaps this can explain FinTech’s significant market success without incurring significant marketing costs.

Research confirms that consumers not only prefer more beautiful products, but also perceive their disadvantages more easily. Apparently, people are ready to be more forgiving of mistakes made not only by their beautiful friends, but also by beautiful services. However, we must bear in mind that the basic level of functionality and usability should not be compromised, as it’s addressed to the basic needs of users. Even the most beautiful car will fail if it doesn't move or is uncomfortable to drive.

The ongoing massive improvement in the functionality and convenience of digital financial products creates the conditions for using the Aesthetic value as a competitive advantage. And, we see that there are more and more beautiful financial products appearing on the market.

4th stage: Status

Large growth leads to mass production. The cost of the product is reduced. The market is actively segmented by offering customers all new product variations depending on their capabilities, preferences and status. There are more and more conservative buyers on the market who are ready to pay more only if the product offers them some privileges.


The product is increasingly becoming an element of lifestyle, informing the public of certain status of its owner. At this point, manufacturers realize that they can produce products specifically for different customer audiences, creating a special set of characteristics in terms of functionality, convenience and aesthetics. These sets of characteristics are especially important to narrow target groups of consumers.

An example from the auto industry

Automakers are beginning to actively segment the model range, trying to personalize the offer and conquer the market in parts. For the elite, they begin to produce luxurious and expensive cars, which, in turn, are divided into representative and sports; for families:- roomy and budget cars; for young people: flashy and compact; for workers: pick-ups, etc.

You can immediately determine to which social group a person belongs by their car. Social dimension is added to the functional and aesthetic characteristics of the product. The idea of a single functional product for all is transformed into many modifications for every taste and need.


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What does this mean for banking?

There are already quite a few financial products intended for a certain category of consumers. For example, “Step” - a mobile bank for teens, even before launch, collected approximately 500,000 customers on its waiting list. The company aims to address the needs of what it believes is an underserved market in mobile banking—the 75 million children and young adults under the age of 21 in the U.S., who are still being forced to use cash.

Nevertheless, given that the digital banking industry is at the Usability stage of the Product Value Pyramid, the Status value doesn't look so relevant for the majority of users. I’m not sure that a service that is not very convenient and visually appealing will interest me just because it is created specifically for people like me. After all, I just would not be pleased to use it.

Status value becomes an advantage only in the presence of appropriate functionality, convenience and aesthetics. This is the only way to achieve ultimate customer centricity. If these aspects are missing or do not match your users, then segmentation will not help. Consider the example of the digital-only bank, “Finn” by J.P.Morgan, which reached only 47,000 signups nationwide and decided to shut down.

As with cars, the segmentation of banking digital services can be incredibly wide. You can make an application for wealthy users, which will be available only if there is a certain amount in the account. It may offer special privileges and serve as a symbol of high social status. You can create a financial service for families that will be specialized in centralized family account management with a budgeting and control system.

Despite the fact that we see a lot of attempts to launch such services, the main peak of their popularity still seems to be ahead when market demand will be ready. Family cars, as well as the other specified categories of cars, also did not immediately reach mass demand.

5th stage: Mission

The product market is fully formed and has gone from growth to the stage of maturity. From the point of view of the S curve in market development, it is getting closer to a turning point. Demand continues to grow due to the late majority and skeptics.


And, suddenly a revolutionary offer appears on the market, which, at first, looks like another modification for a certain segment of consumers. However, it does not offer a new modification, but a new value reference point─a new world view beyond the usual benefits of the product.

Such a product is capable of undermining the existing market by offering an innovative vision that can transform this market, initiating a new technological revolution. Thus, the product ceases to be only a source of convenience or joy and becomes very significant for a certain group of consumers connecting with them at the level of values.

An example from the auto industry

If we look at the automotive industry, over the past few decades, there is a feeling that competitors cannot come up with anything totally new. No significant changes have occurred for a long time.

But, recently, everything changed. In 2004, only a year after its foundation, an electric car startup, “Tesla Motors,” raised U.S. $7.5 million from Elon Musk in round A. As Musk stated in Recode’s interview: “Tesla is incredibly important for the future of sustainable transport and energy generation. The fundamental purpose, the fundamental good that Tesla provides is accelerating the advent of sustainable transport and energy production."


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Tesla had the courage to disrupt the automotive industry in spite of the oil lobby resistance. The value it brings to the world empowered millions of people and resulted in a high demand for Tesla automobiles. Musk wouldn't have experienced such success had he launched his product in a highly competitive market. What he did instead was disrupt the market. So, we see that, today, each car producer develops its own electric models.

Can the use of electricity transform the existing automotive market? Sure. First, it is a push toward digitalization and, accordingly, automatization of cars. The principles of driving cars will change dramatically, as will the conditions for their use. Probably the majority will stop seeing cars as a status indicator and will join sharing on demand.

Second, the use of batteries leads to a rethinking of transport and a possible modification in functionality, for example, cars in the form of drones or as delivery through underground tunnels. In any case, it is already clear that the automotive industry is already changing dramatically and will continue to evolve.

What does this mean for banking?

The Mission stage or, one can say, the ideological stage of the Product Value Pyramid, is still far from the banking market. Finance has only recently begun to pay attention to humans and face their needs, pain and fears. And, the majority of consumers are not yet ready to go after the ideological financial product.

It may seem that Bitcoin has taken over the mission to change the financial world. But, if you take a closer look, this product just became a solution for anonymizing cashless transfers, as well as an investment tool. The blockchain contains a much greater potential for changing the world.

However, blockchain is not a product with a mission; it is a technology that can disrupt the financial and related industries. Today, it looks like an electric motor and a battery without Tesla. But, as we know, the first electric cars appeared a hundred years ago but only recently began to enter the mainstream. And, the influence of Tesla is difficult to overestimate.

Perhaps soon, we will see a hero product based on blockchain or other technology that has a mission to change the financial industry, and millions who are ready to change the world will follow it. But, for this, any technology must first become functionally stable, usable and beautiful and adapt to the needs of various consumer clusters.

Monopoly is the exception in the model

The Product Value Pyramid model also explains well why some businesses that do not pay special attention to the upper stages, i.e. Usability, Aesthetics, Status and Mission, still maintain their position in the market, as well as a high level of demand.

It's all about monopoly. If, due to any reason, the market entry barrier is too high and competition cannot be formed, then users are forced to accept functionality without convenience and beauty.

Let's get back to the example we covered in the first part of this article. Craiglist has not changed much since 2000. Many people wonder how this is possible in the age of rapid growth in digital technologies, the internet and user services. This is easily explained in our model.

Craiglist was one of the first to offer users a platform for online classified ads for used items. Their functionality was enough to attract innovators and early followers. When the competitors realized the viability of this market, they launched their platforms with a more convenient interface. But, the uniqueness of the niche was that buyers go where there are more offers, and sellers go where there are more buyers. This is how Craiglist nailed it.

Thus, competitors could not provide functionality at the same level because the Craiglist community had become its functional advantage unavailable for copying by competitors. This allowed Craiglist to essentially monopolize the market and preserve it in the functional stage without straining about its own convenience or beauty.

Similar services can be found everywhere, including in the financial industry. It's about niche products that have virtually no competition. This allows them to remain unchanged, completely ignoring the expectations of users and their need for more enjoyable solutions.

However, in the more competitive domains, the lack of user care leads to a redistribution of demand flows in favor of more progressive competitors using the CX and UX engineering, as well as the Design Thinking approach.


The Product Value Pyramid allows us to understand why, in the Digital Age, user-oriented design is becoming not just popular, but also taking on an increasingly important strategic role. UX design is becoming a key element to ensure compliance with the market stage of a Product value to gain significant competitive advantages.

By only focusing on the convenience, aesthetics and status of the product, you can engage digital users. But, this is not enough to create an attractive-looking interface, it is necessary to integrate user centricity into all levels and processes of the company, putting the delightful user experience at the forefront. We will discuss how to achieve this in the next article about our second model─ UXDA Pyramid of Financial Design Integration.

Feel free to share your thoughts on the Product Value Pyramid in the comments section. And, as always, if you have any questions concerning financial UX design, feel free to drop us a line at


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Alex, Founder/ CEO/ UX Strategist

Alex has dedicated half of his life to studying human psychology, as well as business success, developing 100+ digital projects and 30+ startups. He spent 10 years researching UX and finance to create UXDA's methodology. Alex is a passionate visionary who's capable of solving any challenge to improve the financial industry.

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