Interview by Matthew Dove
Ralph Harreiter is a CEO with serious vision. Along with his colleagues at Graz-based Parkside, he’s bringing a standard of user experience to fintech which consumers not only sorely need but richly deserve. Here, Harreiter talks to TFT’s senior editor, Matthew Dove, about legacy challenges, home-town pride and airport misery…
Occupation: CEO, Parkside
Book: Zen and the Art of Motorcycle Maintenance
Film: Down by Law (a 1986 black-and-white indie flick written and directed by Jim Jarmusch)
Hobbies: Snowboarding and skiing – “That’s kind of obvious as I’m Austrian!”
The Fintech Times: What first attracted you to working in fintech?
Ralph Harreiter: That actually didn’t happen on purpose, that was more accidental. When we started it was a totally new domain for Parkside. We were contracted by a client who wanted us to work on UX and UI for financial products. What we really liked about it was the actual challenge of working with complicated fintech applications to make them usable, to apply user experience to a financial product. Working on UX, even for a B2B product, was what we really liked in the beginning.
TFT: And why UX specifically? Did you spot a gap in the market?
RH: In the first place, it wasn’t a strategic approach. We just liked the challenge. We liked to break something complex down into digestible parts. We looked and we saw that, especially in the fintech market, there are lots of opportunities because there’s still tons of legacy applications. That’s when we said, “Okay, let’s focus a little more on fintech products.”
TFT: What are the major problems facing traditional financial institutions?
RH: When we talk of traditional institutions, I would assume that there are a couple of main challenges and problems, and some that we might not even be aware of. However, from our perspective, as software developers with a UX focus, the challenge that the corporates face is that they’re corporates!
They’re slow and for many years they haven’t had a user-centric approach. They’re also dealing with numerous legacy applications, so they’re not just slow in innovation and adoption of new technologies because they’re corporates but also partly due to security issues. Then there’s regulatory requirements to think about. It’s hard to move fast. That’s what we see as the biggest challenge that those corporates need to tackle.
the challenge that the corporates face is that they’re corporates!
TFT: What can fintechs do to speed them along?
RH: Let’s look at it this way; fintechs, which are often startups, or external partners like Parkside have the advantage, and it’s one simple thing. They are not part of the corporate structure. You don’t have to go through however many departments to get something approved, you can do what you like to do. For this reason, at Parkside, we always take the user’s perspective and we always come from a user first approach.
That’s in our DNA.
For us, that comes without question, we just do it whereas the corporates have to learn it. This is our biggest advantage, there is no legacy we have to deal with at least when we’re working on new stuff or on separate projects for corporates. And the same goes for startups but with them it’s the user focus and smaller teams.
A lot of companies in finance and banking simply don’t have the talent, the engineer talent as well as the UI designers. Many corporates, and we’re working with some of them, they’re just not able to attract this kind of talent. There are engineers who want to work on new technologies but when they think of, let’s say a bank, they don’t think “Oh wow, I’ll get to do all this cool, crazy stuff working for a corporate.”
TFT: How important is UX to the mass adoption of fintech innovations? One of the major complaints that we hear about innovations like cryptocurrencies is that they’re practically impossible to use.
RH: Well, that’s my belief too. You need to look at UX not just from the part of UX which deals with design but the whole user experience. In my opinion, UX takes in the whole thing, the work flow, every process, everything.
I believe UX is key for new technologies or for new products in the fintech area in order to achieve mass adoption. I don’t know if it’s a good thing, but I would assume that for the majority of users UX is way more important than, for example, security. People choose products that are usable, products that work! It depends on the area you’re talking about, of course, but in my experience people want products that work and that have good UX. With security and everything else they’re like, “I trust you.” In Europe, perhaps, there’s more focus on security but UX is still absolutely key for the mass adoption of new technologies especially in the fintech market.
I believe UX is key for new technologies or for new products in the fintech area in order to achieve mass adoption.
TFT: What advice would you give to fintech and incumbent companies developing fintech products?
RH: There’s different advice I would give.
So, for startups, the one thing I would tell them, and it’s a sensitive area, is do not betray people’s trust. You earn trust and from time to time you see startups that don’t work out. It’s not because of their product or UX but because of trust issues which is bad for the whole field.
For the corporates, it’s actually what I alluded to earlier. Startups and external partners can move so much faster, and they’re already doing that. So for the corporates, my advice would be to work with startups. They can start innovation programmes, they can build separate departments and we’re seeing that happen. If they don’t want to work with external partners, they can build their own departments which often sit outside of the company. They don’t even need to be in the same building.
TFT: What do you consider to be Parkside’s greatest achievement so far?
RH: In reality, it’s nothing client or project related. Yes, we’re working with LinkedIn, we’re a trusted vendor to them and we’ve earned their trust. We also have a stellar reputation with the clients we work with. What we’re proudest of is having been able to build a company like Parkside in Graz. Graz is a super nice town, it’s a university town, however, it’s not huge (it has a population of around 300,000 people).
Here we’ve been able to build a truly international company, both people-wise (Parkside employs 72 people from more than 20 different nations) and in-terms of 70% of our revenue coming from overseas. That’s something I specifically like, that’s something of which we are very proud.
TFT: This edition’s cover story features AI in finance. How do you expect the use of artificial intelligence to affect user experience?
RH: I would say massively and in a great way, hopefully. As I’m flying a lot, I often use this as an example of how AI in general will help us and it also applies to the fintech space. Imagine calling the helpline of either Lufthansa or British Airways. Today, you’re waiting maybe 10 to 15 minutes and then there’s someone who tries but cannot help you. With machine learning and AI in the near future, imagine you call the hotline and a friendly voice picks up immediately and can actually answer your questions and help you. That’s the first iteration.
The next iteration is, when I’m calling they already know what I’m going to ask. The final iteration is that I don’t have to call because, based on AI and machine learning, they will reach out to me actively and contact me with alternative options for the flight that was cancelled.
With machine learning and AI in the near future, imagine you call the hotline and a friendly voice picks up immediately and can actually answer your questions and help you.
Today, if your flight gets cancelled, that’s a super bad user experience. You’re at the airport and nothing works, you have to wait. That’s a real life experience that will be made much better by machine learning and natural language processing. I believe that if it’s done in the right way, machine learning will be greatly helpful and I think that will apply to every single sector, not just the fintech space but everything. You need to look at the user experience as not just the “screens” but the whole experience, i.e. the offer that the product is trying to make or the processes that might be adapted to me personally. I think that machine learning will be a huge shift towards better UX.
You need to look at the user experience as not just the “screens” but the whole experience
TFT: Flight details are one thing but bank accounts are a somewhat different proposition. Do you think consumers are ready to trust proactive and predictive systems with their money?
RH: That’s a good question, I don’t know but we will see. That all depends on how it’s used. I would say that if people have the feeling that the AI is being helpful and not making decisions on their behalf. Feeling in control will be key, that feeling of, “I’ve got everything I want and everything works out as I want it to, however, I’m still in control.” I think that might be the key. Of course, there will be products and companies that do it better and there will be companies that don’t do it in the right way. We’ll see both kinds.
There’s little doubt which kind of products and companies the Graz Gatsby and his band of UX specialists will be working with. As the undeniable value of good fintech user experience manifests itself even more prominently in the coming months and years, we’ll undoubtedly be seeing a lot more of Ralph Harreiter and Parkside as well…