The insurance industry is in the middle of a profound digital transformation. Innovative new companies such as Lemonade have disrupted the way insurance companies used to work. The digital insurance market is currently growing rapidly.
Current Scenario and Pain-points
The number of people using digital insurance plans has doubled in the past five years, and it’s expected to grow even further in the next five years. On the flip side, due to digitization of the insurance sector, the human touch is being replaced by the digital interface, and establishing trust among users has become a major challenge as it is a key component of a good user experience especially in the insurance sector. To overcome this challenge, it’s imperative to have the right trust markers in place. When users do not trust an insurer’s website, they are quick to switch to an insurer that has relevant trust markers and a better digital user experience.
According to the Capgemini and Efma research report, “policyholders no longer waver when it comes to dropping a provider in pursuit of solution providers with better digital user experience”.
PAIN-POINTS
There are various pain points associated with the Insurtech sector given the complexity of their products and offerings.
Pain points such as:
Legalese and jargon lead to an increase in intellectual load.
Lack of tailored, personalised recommendations
Tedious self-servicing, including claims management and policy surrender.
Lack of advice and communication regarding policy-related queries demotivates the user.
Lack of transparency and visibility in procedures affect the credibility of the organization.
Organization-centric Information Architecture and Navigation do not match the user’s mental model.
Lack of human touch negatively impacts engagement and user trust.
Complicated forms confuse the users and reduce engagement
Possible Solutions
Turn complex and cumbersome journeys into simple but informative experiences – Provide a simple information architecture and reduce the cognitive load, avoiding users from being overwhelmed with information but at the same time, ensuring they can expand the information if they need to dig deeper to understand the product to its core.
Nudge users to make well-informed choices – Providing transparent and clear information regarding the most crucial information such as what is covered and not covered, dispute resolution, etc that the user needs to make an informed choice.
Generate trust and transparency – By providing relevant information regarding crucial processes and information such as claim management, setting the right expectations, explaining why certain questions are asked and how it impacts pricing, what the company does with this private personal data, etc…
Keeping the choices minimum – By chunking information, showing only relevant information at a time to reduce cognitive load.
Prompt advice – To help users with their queries at any point in time because users are going to need some level of guidance and reassurance during the purchase process for something as complex and important as insurance.
Promoting user control – Users need to feel in control of their purchasing and decision-making process. We can promote that by giving them the freedom to choose what they want to do to ensure that they are getting good coverage at an acceptable price.
Case Study
Lemonade offers renters/homeowner’s insurance. It uses A.I and chat-bots to handle claims and offer personalised policies. No bureaucracies or insurance brokers, just a desktop and a mobile interface. The Lemonade website is extremely intuitive and easy to use and it’s designed by keeping the users front and center, following UX design best practices and a simple interface.
Let’s see how they achieved it:
Using a conversational tone – helps in more conversions.
Using easy-to-understand UX copy – reduces the cognitive load and increases engagement and retention.
Smooth and conversational onboarding – The onboarding process is as seamless as a continuous conversation and each screen answers a question that complements the previous.
Humanising digital experience – Adding a virtual assistant Maya, makes users feel like they are talking to an actual human being and helps build the user’s trust.
Provides relevant information – In every instance, only the content you need at the moment is presented to you and that significantly reduces information overload.
Builds certainty and promotes making informed choices– By giving users all the information they need to make choices.
our perspective
The insurance industry is in the process of transitioning to digitalization, but in general, is not fast enough as its traditional system complexity needs to go through a thoughtful shift. To bring that thoughtful shift, there are 3 best design practices that Insurtech can apply to improve their digital customer experience.
Integrate digital and human interaction – Even though consumers prefer digital transactions, they need to be sure that a natural person will be there for them when necessary and will understand their goals, desires, and frustrations.
Personalised user experience – The experience should be as personal to the user as possible based on the complex set of products offered by the insurer and the consumers’ different needs and circumstances.
Design with empathy – Designing with the consumer at the centre requires empathy for what they are going through at a particular moment when they interact with the company.
Conclusion
From a customer perspective, insurance can be a complex industry, with a vast range of products and options. Following design best practices while putting consumers at the center, seamlessly integrating digital and human interactions, personalising products to their circumstances, and treating them with empathy, companies can earn customers’ trust and loyalty.
Conversational Design is a human-like-filter that’s layered on top of bots. Conveying information to the users fulfills the objective, but being conversational brings a natural touch and boosts user engagement.Conversational Design is a rapidly growing field as it mimics real-life conversations, allowing users to interact with technology in a more intuitive and personalized way, imagine a bot that can be just as silly, smart or humourous as the user. Conversational design makes the interaction seem organic, even if it’s just a system of networks. Though we know it’s a machine on the other end, tailoring these interactions for users makes it feel more human, natural and effortless.
Forms of Conversational Design in our everyday lives
1. Digital voice assistants
Voice assistants are one of the most advanced implementations of conversational design. They can do everything from telling jokes, stories to informing us about the weather and much more. Experts predict that by 2024, there will be 8.4 billion digital voice assistants in use worldwide, outnumbering the global population. And by 2025, the transaction value of purchases made through these devices is expected to reach $164 billion!
So, it’s safe to say that our AI friends are here to stay.
Hey Siri, tell us what you can do!!
Siri can perform various tasks such as making calls, sending messages, setting reminders, providing weather updates, searching for information on the internet, playing music, controlling smart home devices, and more. With advanced features such as voice recognition technology, it recognizes individual voices and provides customized responses based on individual preferences. Siri can also integrate with third-party apps to provide personalized and relevant responses to users. It can even entertain you by telling jokes, singing songs, and providing live sports updates.
2. Chatbot
A chatbot, on the other hand, is designed to understand and respond to a conversation in a natural, human-like manner. The chatbot is equipped with artificial intelligence and access to knowledge databases to become ‘contextually aware’. It can then pick up variations in a customer’s question and give relevant answers to numerous users simultaneously, thanks to the incredibly short reaction time.
Chatbots will Now Book Tickets To Events & Shows for you
The chatbot of a Cinema theater website lets visitors book tickets and view the trailer for the movie they want to watch – which helps them make a buying decision. The chatbot, in addition to providing support, also helps increase sales.
This application of chatbot isn’t just limited to movie theaters. Performers, sports teams, organizations, nonprofits, and anyone creating an event can use chatbots to smoothly sell tickets to their fans and audiences.
3. Interactive applications
In the online world, you’ll find various conversational design examples. From ecommerce platforms to news websites, modern technological solutions are being adopted by all leading organizations, particularly when it comes to customer service and improving the user experience.
How Duolingo interacts with users who come to learn languages
Duolingo helps users learn a language with small conversational exercises. The number of downloads for Duolingo has surpassed 500 million, which speaks for its good conversational design and ease of use.
Duolingo has made a partnership with Open AI. GPT-4 deepens the conversation on Duolingo. It will now offer English-speaking users AI-powered conversations in French or Spanish, and can use GPT-4 to explain the mistakes language learners have made. With the help of GPT4, they have introduced 2 new features – Role Play, an AI conversation partner, and Explain my Answer, which breaks down the rules when you make a mistake.
Ever chatted with a bot or voice assistant and thought it was a human on the other end?
That’s the magic of conversational design! It’s all about creating a conversation that’s structured yet engaging between you and your digital friend. It typically involves creating a script of potential user interactions and identifying the intents and entities that the chatbot or voice assistant should recognize.
Phases of the process :
Converts speech to text using Automatic speech recognition (ASR).
Interprets the meaning of the user’s request by using Natural language understanding (NLU).
By leveraging machine learning, it generates a response that simulates human-like language –Through Natural Language Generation (NLG).
Finally, it converts the response into speech using text-to-speech software
Fundamentals of Conversational Design
Responsiveness – Quick response is expected out of bots. It also means that the design can be interacted with using different devices and platforms.
Availability – With conversational services like chatbots, the users can get issues resolved at any time of the day. Time is precious, speed is everything.
Simplicity – Language that is simple and easy to understand is extremely crucial. This is what makes it conversational.
Error tolerant – To err is human. It becomes important for machines to understand imperfect information from users and still provide them with relevant answers.
Conversational design Vs Conversational UX
Conversational design and conversational UX are two related but distinct concepts in the field of conversational interfaces.Conversational design is all about creating a chatbot or voice assistant that can have natural and engaging conversations with users. It involves designing the conversation’s structure, content, and flow to meet users’ needs. On the other hand, conversational UX focuses on the overall experience of using a conversational interface. This means designing the conversation to meet user goals, understanding their preferences and limitations, and making the interface intuitive and enjoyable to use.
Best Practices
Understand the balance between technology, psychology, and language – Structured data like variables, and entities are necessary for the artificial brain. Whereas the human brain functions with empathy, direction, and encouragement. And the common factor that unites them both is language. Understanding these three dimensions gives users a better experience.
Design a persona for trust– Create a strong persona that enables you to use a consistent vocabulary that speaks to the users. This ensures likability and trust.
Have a human-centric design process – The foundation of a positive conversational experience is human centricity.When there is a lack of empathy, the user feels lost and unimportant. Understanding users’ concerns, motivations, and context builds trust. It makes the conversation natural and human-like.
Use role-play and sample dialogue – One will play user and one will play the role of voice assistant or chatbot. They talk for the most part while seated back to back from one another. This enables them to eventually reach their most natural conversation after a few iterations.
Keep it simple with edge cases – Avoid wasting too much time attempting to resolve rarely occurring situations. 80% of your time should not be spent on 20% of your users in all those strange exceptions. Instead, it’s better to direct them to an agent or a website for more information.
Chat GPT empowering the specially abled
Be My Eyes uses GPT-4 to transform visual accessibility.
With the new visual input capability of GPT-4 (in research preview), Be My Eyes began developing a GPT-4 powered Virtual Volunteer™ within the Be My Eyes app that can generate the same level of context and understanding as a human volunteer.
It helps to analyze and respond to images that are submitted alongside prompts and answer questions or perform tasks based on those images. The advantage of using GPT4 is the ability to have a conversation and the greater degree of analytical prowess offered by the technology.
What the future holds for Conversational Design
Increased personalization – That could include chatbots and virtual assistants that understand individual users’ preferences and can adapt their responses accordingly.
Multimodal interfaces – We can expect to see conversational interfaces that incorporate other modalities such as gesture, touch, and even brain-computer interfaces.
Emotionally intelligent interactions – As conversational agents become more human-like, they will need to be able to recognize and respond to users’ emotions.
Integration with other technologies – Conversational design will become more powerful as it is integrated with other technologies such as augmented reality, virtual reality, and the internet of things. This could enable conversational interfaces to interact with physical environments in new and exciting ways.
Greater accessibility – Conversational design has the potential to make technology more accessible to people with disabilities.
Natural Language Processing – As NLP technology continues to advance, chatbots and virtual assistants could become even better at understanding and interpreting complex language structures and idioms.
The demand for conversational design is expanding, and the underlying technologies are becoming more advanced. It will be interesting to see what the future holds and what new use cases and experiences we start to see as technology advances and more businesses use conversational design.
Our Design Perspective
The opportunity for conversational design is immense. Users’ use of different platforms such as websites and mobile applications may be simplified due to this technical advancement, which can also help businesses increase the quality of their services. Customer support, marketing, and online information design can all be made more valuable with the implementation of conversational design. Conversational design involves creating engaging, natural, and interpersonal interaction between computers and users. Conversational designers must consider how users will engage with them, what the interface will say or do in response, and how to provide an intuitive and efficient user experience.
The finest quality, exclusivity, and extravagance are all attributes associated with luxury. It describes goods, services, or experiences that go above and beyond the bare essentials of life and are connected to a certain degree of luxury, pleasure, or prestige. It is deemed highly desirable within a culture or society that portrays a person’s social status, standards, and wealth.
The luxury consumers of the digital age
The impact of the digital age and technology is evident when evaluating the performance of luxury brands in the current market. Consumer responsiveness has greatly increased, with typical buyers becoming more technologically savvy.
Types of luxury product shoppers & designing for them
Lavish spenders
People who lead a lavish lifestyle, filled with travel and entertainment and have the money to spend lavishly on luxury.
Opportunists
Opportunists are those with a smaller but still sizable amount of money who occasionally splurge on luxury items.
Aspirationalists
They prioritise company ethics and brand integrity even more than Millennials do.
Digitize end-to-end supply chain
During the epidemic, we witnessed what the internet world can do for us. People discovered ways to stay connected through the tech/digital world while the real world collapsed.
Before the pandemic, there were dreamlike retail spaces. However, with the development of technology, increased accessibility, and millennial consumers with their smarter and more dynamic lifestyle choices, the online market for luxury products saw an axis shift.
How luxury brands create unique digital experiences
Storytelling
To create a distinctive digital experience that goes beyond product descriptions and sales pitches, luxury brands embrace storytelling. They provide material that highlights the brand’s origins and values, conveys its story, and evokes customers’ emotions.
Virtual events
To provide an exclusive and immersive digital experience, luxury businesses conduct virtual events like fashion shows, product launches, and brand partnerships. These gatherings aim to engage customers, spark conversation, and foster a sense of community around the brand.
Customized interfaces
Luxury brands create unique digital user interfaces that convey their visual character and exude elegance. The user interface of the website, social media pages, and mobile apps are all created to provide a premium experience that appeals to the brand’s intended market.
Limited edition products
Limited edition products made by luxury firms are frequently sold online only. These goods are intended to evoke feelings of exclusivity and urgency, encouraging people to buy right away before they run out.
Personalization
Through features like virtual shopping assistants, tailored product recommendations, and customised content, luxury businesses provide highly personalised experiences.
Authenticity treasures value
For those who understand the value of authenticity, luxury goes beyond materialistic possessions. The value of luxury lies in the sense of status that it provides. They seek out luxury products that are expertly made, and have the best craftsmanship with the utmost care, paying close attention to every last detail.
It is simpler for counterfeiters to create and sell fake luxury products in the digital age, as e-commerce has replaced traditional retail. For luxury firms to set themselves apart from copycats, they must emphasize the authenticity of their products.
Higher price = Better quality?
Luxury items are often marketed as exclusive and rare, and a high price tag can contribute to this perception. Consumers may believe they are getting a higher quality item simply because it is more expensive and exclusive. While expensive luxury goods are often considered to be of higher quality, it isn’t always the case.
Luxury goods are frequently produced using premium materials and with greater care and precision during the crafting process. The materials and craftsmanship used in luxury items frequently reflect the quality, even though the price may not always directly reflect it.
How the digital world is responsible for counterfeiting luxury products?
Online marketplaces
Online stores like Amazon, eBay, and Alibaba have made it simpler for counterfeiters to entice naive buyers with bogus luxury goods. These sites are challenging to monitor, and counterfeiters frequently conceal themselves by using many accounts and false identities.
Social media
Social media sites like Instagram and Facebook have developed into ideal platforms for counterfeiters to advertise and sell their knockoff versions of high-end goods. To reach a big audience, they frequently make use of trending hashtags and influencers.
Digital printing
The development of digital printing technology has made it simpler for imitators to create high-quality replicas of expensive goods, including apparel, accessories, and packaging.
Cybercrime
Cybercrime is a problem that is getting worse, and hackers are employing digital technologies to steal people’s financial and personal information to sell fake luxury goods or carry out transactions using false identities.
What the brands are doing to keep the counterfeiters at bay?
Beyond The Logo
Logos are easy to replicate, but quality craftsmanship is not. A brand can be given a tremendous boost of authenticity by highlighting traditional workmanship, handcrafted elements, and heritage processes.
Redefine Customer Connection
The consumers of luxury goods are evolving. The new rich of today are millennials and there is a shift where experience and sustainability are being prioritised over items, consumption, and exclusivity.
Supply Chain Management
To trace the flow of their products and stop fake goods from entering the supply chain, they are putting in place measures like barcoding and tracking systems.
Collaboration
To prevent counterfeiting, brands collaborate with governments, law enforcement organizations, and business associations. Additionally, they are collaborating with digital firms to create cutting-edge technologies that can help identify and stop the entry of counterfeit goods.
Public Awareness
Consumers are being educated on how to spot real goods and what to look for to avoid buying fake goods.
Luxury could be the upcoming trend
Although there are still plenty of people who spend extravagantly to show off their status, we can see an alternative rising trend of minimalist luxury over the past decade or two. Consumers are increasingly choosing and putting into practice the opposite tendency, which is buying fewer items and buying better.
Our perspective
The luxury market is a growing industry in fashion, jewelry, watches, home decor, and more. Designing for luxury requires a unique skill set and a deep understanding of user psychology, the luxury market, and the risks associated with it. Understanding current trends and connecting with upcoming consumers can help brands go a long way. Staying relevant can help businesses stay competitive, attract new customers, create new opportunities, and build their brand image in their respective industries.
The field of UX has been advancing rapidly over the past several years due to the introduction of enhanced technologies and innovative ideas. In the midst of such advancements, it is crucial to understand the long-term implications and gain perspective on the bigger picture, and this is where Green UX or sustainable UX plays an important role.
Environmental Impact
Before we dive deep into the topic, let us try to understand the current scenario and get some context.
Global warming has been increasing, and we can see its impact in our daily lives. But how does the internet and the digital world contribute to this phenomenon?
According to statistics, if the Internet were a country, it would be the 7th largest polluter. It produces nearly 1.6 billion annual metric tonnes of greenhouse gases, significantly contributing to the greenhouse effect and the consequent changes in our environment. Furthermore, the data centres that support the internet, which are being used by numerous devices every day, contribute another 2% to carbon emissions, increasing the impact of the internet in our environment. Now, imagine billions of people browsing through billions of pages on the internet and the resulting amount of carbon dioxide produced from this activity.
Given these jarring numbers and facts, how can we as experienced designers work towards reducing the environment’s suffrage through our designs and ideas? This is where Green UX or Sustainable UX comes in.
Sustainable Web Manifesto
A sustainable web manifesto is a movement led by designers, to encourage and educate people about the importance of designing for sustainability.
The manifesto employs a people and planet-first approach and helps articulate how digital products and services can help enable this change. It respects the principles which call for an internet that is:
Clean-The services we provide and services we use will be powered by renewable energy.
Efficient-The products and services we provide will use the least amount of energy and material resources possible.
Open-The products and services we provide will be accessible, allow for the open exchange of information, and allow users to control their data.
Honest-The products and services we provide will not mislead or exploit users through our design or content.
Regenerative-The products and services we provide will support an economy that nourishes people and the planet.
Resilient-The products and services we provide will function in the times and places where people need them most.
What should we do?
In order to design for sustainability, it is important for us to identify the steps in the design process that can be changed to make a more sustainable end product.
The following suggestions are provided on how to include sustainability in our designs:
Optimise user journey
Make sure that every component on the page assists the user in achieving their goal. Therefore, the task should be accomplished in the minimum steps possible.
The amount of time people spend on a digital product is equal to the amount of data they have to load.
If something is not used — get rid of it as it surely affects the loading speed in a negative way, even if you do not see it.
For example, the website for the Aliter Network is a low carbon website and has a clean, effective design with all the elements specified up front.
Efficient Visual Aids
Remove unnecessary visuals to reduce load time and dependency, as the more visual elements you have on your page, the more effort it requires to load. Eg:-Auto-play videos, Large Images. This can be replaced with adaptive images & videos.
Compress your content to enhance scannability and reduce load time, which will increase the performance of your website as well.
Optimised videos and images: To reduce server load, use lower resolution images and videos with the option to request a higher quality.
Remove unnecessary visuals to reduce load time and dependency, as the more visual elements you have on your page, the more effort it requires to load. Eg:-Auto-play videos, Large Images. This can be replaced with adaptive images & videos.
Compress your content to enhance scannability and reduce load time, which will increase the performance of your website as well.
Optimised videos and images: To reduce server load, use lower resolution images and videos with the option to request a higher quality.
Mobile first approach
When you design for small screens, you focus your design process on highlighting the core features around what works with less real estate.
The principle of progressive enhancement, which says that if something offers a great experience on a smaller device with fewer resources, the experience can then be enhanced for users with more powerful devices and using larger screens.
This consumes less energy and data, making the product more accessible.
Low Energy Colours
Choose sustainable colours that require less energy, and yet provide a good user experience.
Mindfully introduce dark mode as it can be beneficial only for certain use cases and also keep accessibility in mind.
As you might expect, darker colours require less energy and brighter colours require more energy.
Volkswagen has committed to decarbonize all aspects of its business, and when planning the Canadian launch of the ID4 electric vehicle, Type 1 asked if the website could both support the company’s vision and be low carbon. This leads to a 50% cleaner website compared to the earlier version.
Encourage eco friendly behaviour
Minify your code by removing unnecessary design or white spaces.
Use cache to load user information and browsing styles faster and produce less demand on server as well as reducing number of steps to achieve a task.
Increase exposure to eco-friendly options by creating awareness through your design and remind users about recycling, reusing, and reducing in several app screens.
Similarly, Google’s aim is to run on carbon-free energy by 2030, which includes their data centres, devices, and services, as well as their workplace.
They are adding features to products to help users make sustainable choices. For example, in Google Maps, while looking for hotels and flights, you can find eco-certified properties as well as flights with CO2 emissions.
On the other hand, designing an engaging sustainable website can be difficult, therefore, to understand it better, there are websites of various design agencies that have sustainable content and approaches, as shown below.
These websites had also contributed to the sustainable web manifesto, to be a part of the solution along with their specific sustainability factors.
Manoverboard
Manoverboard is a design agency that uses a sustainable approach in both their website as well as their design solutions .Their work and principles include:
Easy to navigate, audience-centric websites where the user can immediately understand what to accomplish.
Fast-loading content with a low carbon footprint
Authentic and honest services with creative brands that endure.
Design that meets clear accessibility and sustainability standards.
Years of user experience expertise, which includes design development, branding, identity and website care along with the audit.
This design agency also meets the highest standards of social and environmental impact. As a result, it is certified as a B corporation and donates 1% of its revenues.
The managing director of Wholegrain Digital, Tom Greenwood leads the sustainable web manifesto and has written a book on sustainable web design. This agency promises that their website as well as the website they build are 67% less polluting than the industry average.
Their mission is to create critical low-carbon websites, and they include all of the necessary certifications to be recognised as a sustainable agency. (Source-https://www.wholegraindigital.com/)
Benefits of green ux for businesses
So, how can we as a company benefit from Green UX?
It can minimise your carbon footprint
Sustainability can not only help you lower your carbon impact but also increase your financial security. Utilising sustainable techniques will help you use fewer resources in the construction and hosting of your website.
It’s beneficial to the environment
Sustainability is beneficial to both your company and the environment. By lowering emissions and resource usage, you can benefit the environment by designing and developing a sustainable website.
It can enhance consumer experience
You can improve the usability and accessibility of your website by implementing sustainability measures. This will enhance the user experience and motivate users to return to your website in the future.
It can assist in optimising business workflow
Your business workflow can be optimised with the aid of sustainable web design. Utilising sustainable practices will help your website run more efficiently and load pages faster. This will enhance your general effectiveness and optimise your business workflow.
It separates you from your competitors.
Consumers are placing more and more value on sustainability in the modern corporate environment. You may differentiate yourself from the competition and convince your clients that you care about the environment by adding sustainable techniques into your website design.
It benefits business.
Users are becoming more aware of environmental issues, which can help you grow your business by attracting new clients. This is due to the fact that sustainability is frequently viewed as a positive quality and can support the development of credibility and trust with your target audience.
Consumers’ perception regarding sustainability
According to a corporate social responsibility study conducted in the USA, it was noticed that:
63% want corporations to drive social and environmental change in the absence of government action.
87% of consumers will make a purchase because a company advocated for an issue they care about.
76% expect companies to take action against climate change.
73% would stop purchasing from a company that doesn’t care about climate change.
Summary
We have a long way to go before we can fully embrace sustainability at every level of the organisation and differentiate ourselves in the market. Sustainability needs to be practised with transparency at each vertical and needs to align with our vision and motto.
You are now in the lead. For our users and the Earth, let’s design something that is extremely “Green and Sustainable”.
Have you ever read something, or seen something and questioned its origin? Seen rumours that may make sense, but the genuinity of which has riddled you? Just in the last year itself, we have seen smiles appear where they never existed, dates happen without being proposed, and a photo win a photography contest, without passing through a camera lens. How, you ask? All thanks to the wonder that is AI, which now helps us create and collaborate with aplomb. However, with all its splendour, it also raises questions on the authenticity of every piece of information? What we saw as the future, is now a reality. We’re in the realm of artificial intelligence. And it is time to take on the mantle of responsibility & regulation, before AI takes the responsibility of regulating us.
Generative AI, on one hand, is a tool that brings convenience, but on the other, it is also a tool for misinformation that could prove risky to humanity. The only way to avoid such scenarios is with complete disclosure. A declaration that negates the effects of harmful misinformation that could lead to chaotic outcomes. This is when we, a group of creative individuals at The Minimalist, decided to step forward, and create icons that would bring clarity to end the disparity. These icons are called – The Authenticons. A name derived by combining two words, Authentic + Icons.
These iconic heroes have been summoned to fight the good fight against plagiarism, spreading of fake news and the creation of fake profiles to scam people. In times where ethics seem shaky, fake propagandas lead to manipulation, and creativity faces an uncertain future, The Authenticons aim to demarcate visual, textual and audio content based on AI or Human implementation.
We created symbols for human made, AI generated, and a combination of both.
The idea was to create icons through a service design approach that were as simple and functional, like the veg-non veg marker, or the male female symbols that we are all so familiar with, amongst other such popular symbols. Research showed that this group needed to be simple, type based for wider visibility and have human elements to ensure that they are easily understood.
Ease of use was top of mind during ideation. And the inspiration came from the universal language of mathematical codes that are script agnostic. The eyeball, an amazing natural scanner that can detect the difference between Human made and AI generated images over time, became our starting point.
Using this insight and the keys available on every keyboard or keypad, we created our first icon to represent human made with <o>
The next symbol needed to represent Artificial Intelligence, and the inspiration came from its abbreviation, AI and became ^[
Once these two were established, the third icon for Human & AI came organically, combining the first two icons to create ^o[
The mission assigned to these Authenticons was simple, reach out to people and ask them to authenticate their content. Because no one wants to live in a world where a non-existent virus cooked up by AI goes viral, or an insensitive piece of work hurts sensibilities due to the absence of human emotion. A new age beckons, but a new rage reckons we need stronger etiquette. Which is why we implore you to keep an eye on the marvels of AI and embrace The Authenticons!
PS: TM does not hold any IP rights to the aforementioned icons. We encourage people to use these as and when they see fit, without the need for credits.
Understanding the concept of Move-To-Earn in the Web 3.0 space is crucial to grasp the paradigm shift that game mechanics are bringing to the fitness world.
The Objective
This combination of fitness and gamification is commonly known as “FitFi” and is a great way to incentivize and motivate users to lead healthier, more active lives.
Exploratory Research
Move-to-earn cryptocurrency programs use GPS, step counters, and other sensors on the user’s mobile device to track their activity and automatically reward them for being active.
These tokens obtained through Move-to-Earn can be used within the game world or converted to crypto or fiat money.
This promotes a more active lifestyle and has several potential uses in the future for Augmented Reality (AR) and Virtual Reality (VR) technologies, promoting the continued development of metaverse and blockchain technology.
When Web 3.0 Meets Gamified Fitness
Fitness gamification has already proven to be a good advancement. When fitness and games combine, there is more motivation, interest, and a sense of accomplishment.
Wearables and tracking devices are used to measure progress, and meeting objectives and milestones are frequently used to implement gamified fitness.
Correlational Research
Impact of Pandemic on Fitness
The pandemic had a significant impact on the fitness industry, with gyms shutting down, an increase in virtual fitness sessions and coaches, and a growing emphasis on personal health.
As a result, businesses have been pushed to build up an online presence and look for fresh methods to engage with customers.
The Problem Statement
A growing number of sedentary lifestyles harm mental and physical health.
Many games in the market encourage fitness but are not fully immersive enough to engage users.
With the rise of Web3, people are interested in socializing and interacting.
User Personas
The Solution
The ShapeShift game is a Web3 game that burns in real life and earns in the virtual world.
The game merges both worlds to give a truly immersive experience and builds healthy habits while doing so.
It is accessible to all age groups and fitness levels and is designed to attract millennials and GenZ users.
Users can earn tokens and monetize them in fiat money.
The game is also designed to build a community and reach global fitness coaches.
It is connected to a wearable to track daily steps, calories, and other data.
Users create their account
Users create their avatars and connect with the wearables
Then you need to sync the mobile game to the wearable
Dashboard
Leader Board
Marketplace
Profile
The Conclusion
The game’s Move-to-Earn mechanics, gamification, and community building are changing the paradigm in the world of fitness. The game combines the latest technology with healthy living, and as a result, it is a great way to promote an active lifestyle and encourage people to prioritize their health.
The Hackathon by The Minimalist brought forward some fascinating ideas for a luxury fashion brand.
The Concept
Team “The Luxe Legion” presented the concept of Meta Luxe. This concept addresses the challenge of online luxury retail, where customers cannot experience the product and get validation before purchasing it.
Objective
Meta Luxe aims to enhance the luxury shopping experience by providing an immersive, personalised, and exclusive experience through extended reality.
Problem Statement
The brand focuses on enhancing its luxury experience by embracing the principles of slow commerce, where attention shifts to the finer details of craftsmanship, heritage, tranquillity, and value of the experience. However, the biggest drawback of online retail therapy is the inability to experience the product in real life. Hence, the objective of Meta Luxe is to make the shopping experience more engaging and personalised, thus increasing conversions and sales for the brand and increasing its social media reach.
The Market
Meta Luxe caters to four major user groups:
Connoisseurs
Experientialists
Aesthetes
Aspirers
The team chose the groups that constitute the majority of sales – the Experientialists and the Aesthetes.
These are 25-40-year-olds from tier 1 and 2 cities
The HENRYs (High Earners, Not Rich Yet)
The rise of women consumers
The growth of luxury spending in tier 2 and 3 cities form an emerging consumer base
The Challenge
The team’s solution to the challenge is to create a metaverse that customers can enter through an invitation to experience luxury shopping in a unique and personalised way.
User Flow
A golden ticket allows users access to the Metaverse
A user can choose an avatar or create one
In the main lobby, users can choose between the store or fashion walk
When a user enters the store, the help desk determines the purpose of their visit
Selecting ‘something specific’ opens the following dialog box
Selecting ‘explore myself’ the user gets to opt for a stylist
Users have a variety of options when choosing a stylist
By hovering over the stylist’s name, the user can view the cost packages and continue browsing the section
Based on the user’s style & preferences, the stylist would recommend options
The longer the user browses, the more options are suggested by the AI stylist
Once the user accepts the style they proceed to the trial room, where the stylist converses about how it suits them
If the user is satisfied with the look, they can proceed to the ramp and flaunt their look
During the ramp walk, other users can appreciate the look and the main user can share the look with others to purchase
This is how other users will see when the main user is on the ramp walk
The main user lands on the cart section where they have to proceed to checkout and can browse through other accessories like a perfume
The scent of the perfume will be presented visually for an immersive experience
They can browse through the list of suggested perfumes to complete their look
If the user chooses a perfume, it will be added to their cart and then they can make the purchase and check out
The user is directed to the main Luxe lobby where they can go to the profile and look at the options to dress their avatar and share it with their friends on social media
The Conclusion
The Meta Luxe provides an inventive and personalised solution to enhance the luxury shopping experience. By creating a metaverse, The brand can increase conversions and sales while providing customers with an immersive and unique experience.
In a world where everything is moving at a fast pace, a business owner has to wear many hats. From sales and marketing to product development and customer service, there never seem to be enough hours in the day. That’s why many businesses turn to third-party logistics (3PL) providers for help managing their supply chain.
What is Third-Party Logistics (3PL)?
In simple terms, 3PL is when a business outsources all or part of its logistics operations to a third-party provider. This can include everything from warehousing and transportation to order fulfillment and inventory management. By partnering with a 3PL provider, businesses can reduce their operational costs and focus on what they do best – growing their business.
Difference between 1PL vs 2PL vs 3PL vs 4PL
The world of logistics has recently introduced a new concept called Fifth-Party Logistics (5PL), which refers to the use of an external party to manage and coordinate the entire logistics network on behalf of the client. These providers act as consultants and offer end-to-end solutions for managing and optimizing their clients’ supply chains.
Role of 3PL in supply chain management
3PL plays a vital role in supply chain management by providing specialised services to improve the efficiency, flexibility and profitability of supply chain operations. Here are some key areas that illustrate how 3PL can assist in different stages and segments of the supply chain:
3PL’s Interaction with Technology
3PL providers leverage a combination of technology, systems, and devices to streamline their logistics operations, reduce costs, and enhance customer service. Some of the key tools and techniques used by 3PL providers are:
Design suggestions for 3PL
The 3PL (third-party logistics) industry is responsible for managing the movement of goods from one place to another on behalf of businesses. UX design can play a crucial role in improving the efficiency and effectiveness of 3PL operations through the following design suggestions for the 3PL industry:
Some Challenges and their Design Solutions for the 3PL Industry
1. Challenge :
Rising transportation costs
Fuel prices and other transportation costs are rising, which can increase the cost of logistics services.
Solution :
To develop a set of tools that would enable 3PL providers to optimize their transportation operations and reduce costs. To achieve this goal, we propose to design route optimization tools that can minimize fuel consumption, reduce travel time, and enhance vehicle utilization.
How can route optimization help third-party logistics providers?
Third-party logistics (3PL) companies handle thousands of orders on a daily basis, therefore manually tackling these orders can add to expenses and hamper deliveries. The best way to improve transport and logistics efficiency is through route optimization.
Route optimization helps fleet supervisors find the shortest, fastest, and most cost-effective routes for their vehicles, reducing costs, improving delivery times, and enhancing customer satisfaction.
Effective ways to reduce cost by designing and using route optimization solutions
Fleet drivers can reach the right customers at the right time by using AI-based route optimization software that helps in cutting down the logistics costs through the usage of a smart vehicle routing algorithm by
Minimizing the exposure to violation, traffic, and safety risks to decrease costly liabilities such as insurance expenses.
Optimizing routes to reduce the distance traveled, thereby lowering fuel costs.
Decreasing the time that vehicles spend on the road, resulting in lower maintenance costs and a reduction in overall operational costs.
Here’s how to implement the solution
1. By using a software to speed up deliveries
Manual delivery of 5k+ products will raise the operational cost of logistics while route optimization software automates and plans the route, hence reducing the cost-effectively. An efficiently designed route optimization software provides information on the Expected Time of Arrival (ETA) and immediate delivery status. The software automatically allocates, optimises and adjusts the ETA and routes in terms of delivery constraints like traffic and congestion.
2. Route optimization to organise activities of 3PL companies
The software is designed in a way that the dispatchers provide a clear input of tasks to get accurate results. This input will help drivers deliver the shipment and receive an invoice for it. Also, it can make a big difference in real time delivery of the right product and the right place.
3. By assisting when there is a shortage of delivery personnel
Delivery agents are an important part of the logistics industry as the human effort increases the overall cost of a logistic operation. Hence, route optimization is the best solution for 3PL companies in different ways:
Increases the number of completed deliveries and drops
Showcases planned routes and possible stops
Reduces the working hour of workers and offers enough breaks
4. By managing different types of delivery options
If you want to cover various delivery options, then you need an integrated and cohesive order fulfilment centre that can give you information about the current status of every product in the logistic. Route optimization helps your diverse delivery options in the following manners:
Improves end-to-end visibility of the entire shipping process
Real-time optimization and communication after placing the order
Enhances the experience of customer services
Provides options for affordable delivery options
2. Challenge :
Labour shortages
The logistics industry is facing a shortage of warehouse workers, which can lead to increased labour costs and difficulty in meeting customer demand.
Solution :
By leveraging cloud-based technology to create a platform that seamlessly integrates with major robotic fleets and software systems, 3PLs can significantly increase automation in manufacturing plants and distribution centers. This can ultimately alleviate the shortage of warehouse workers in the logistics industry.
Here’s how to implement the solution –
1. Consolidate warehouses to streamline fulfilment process and reduce costs
As e-commerce continues to grow, maintaining separate warehouses for retail and e-commerce orders can result in increased expenses and duplicated inventory. To address this challenge and reduce costs, 3PLs are integrating their warehouses and networks, gaining better inventory visibility, and streamlining their fulfilment processes to address staffing and retention challenges.
2. Implement automation technology to modernize manufacturing and distribution processes
To meet modern fulfilment demand, 3PLs must keep up with the latest technology and systems, especially when labour is scarce. Automation is essential to handle fluctuating e-commerce volumes, global staffing changes, and rising labour costs. By implementing automation technologies, fulfilment centres can satisfy rising consumer demands, modernize their processes and workforce, and enable workers to manage high-volume fluctuations with greater ease and precision.
3. Leverage cloud technology-based platforms and robotic fleets
The 3PL industry is facing a significant labour shortage, and robotic fleets and software systems can help reduce dependence on human labour. Robotic fleets can automate several processes, such as picking and packing, which are typically carried out by human workers. By automating these processes, 3PL companies can reduce their dependence on human labour, lower recruitment and retention costs, and modernize their operations.
3. Challenge :
Time consuming long packaging process
The logistics industry is facing issues of higher packaging time before dispatching orders for deliveries.
Solution :
Designing a unified platform that combines automation, standardisation, predictive analytics, multi-packing, and incentives all of which help in speeding up the packaging process and ensure that orders are processed quickly and efficiently.
Here’s how to implement the solution
1. Automate packaging systems & design interface
Implementing automated packaging systems with user-friendly interfaces is an effective way to reduce packaging time in logistics. These systems create custom packaging for each order, reducing manual labour and increasing efficiency. User-friendly interfaces simplify the packing process, reducing human error and the need for extensive training. Overall, this solution optimizes packing processes, reduces labour costs, and enhances productivity in the logistics industry.
2. Optimise the packing process by designing a suitable technology
Optimizing the packing process by creating standardized procedures and leveraging technology can also reduce packaging time in logistics. For instance, using mobile devices to scan products and generate shipping labels can speed up the process and reduce errors. Employing barcoding or RFID technology to track inventory can also help ensure accurate packing and reduce the time spent searching for products.
Ex: Amazon Supply Chain
Amazon’s supply chain basically refers to storage , warehousing of the products, costing , inventory management, delivery and returns, etc. Amazon has enhanced each of these elements to ensure a seamless supply chain. With third-party sellers being responsible for 55% of all sales made on Amazon, Amazon offers two fulfilment options to sellers – Fulfilled by Amazon (FBA) and Fulfilled by Merchant (FBM).
Strategies to speed up the packaging process by Amazon :
Automation: Amazon uses advance technologies such as robots and conveyor systems to automate the packaging process. These technologies help to minimise manual labour, reduce errors, and speed up the process.
Standardisation: Amazon has standardised its packaging process, with all products packed in a similar way using standardised materials. This helps to streamline the process and reduce the time required to pack each order.
Predictive analytics: Amazon uses predictive analytics to anticipate demand and adjust its inventory levels and packaging resources accordingly. This helps to ensure that the right packaging materials and resources are available at the right time.
Multi-packing: Amazon has developed a system of multi-packing, in which multiple orders are packaged together in a single box. This helps to reduce the amount of time and resources required to package each individual order.
Incentives: Amazon incentivizes its employees to work quickly and efficiently, offering bonuses and rewards for meeting packaging targets.
Manufacturing and logistics professionals face numerous challenges when interacting with digital systems for 3PL.
Harsh working environments, crowded conditions, and multitasking can negatively impact productivity, employee satisfaction, and customer experience. To address these challenges, companies can invest in design solutions that prioritize safety, efficiency, and comfort. By creating a well-designed workspace, companies can improve productivity, reduce costs, and enhance customer satisfaction.
E-commerce companies can collaborate with logistics partners to optimize the supply chain and reduce shipping times. By adopting digital technologies such as automation, robotics, machine learning, and data dashboards, companies can improve order fulfillment accuracy and speed, enhance customer experience, and build brand loyalty.
Our design perspective
Designing for the 3PL industry involves a user-centred design approach that leverages research, prototyping and testing to create solutions that address the specific challenges faced by 3PL providers. The goal is to create interfaces and tools that are easy to use, efficient and improves the overall logistics experience for 3PL providers and contribute to a more sustainable future.
Gen Z has grown up with technology, the internet, and social media, thus they are commonly stereotyped as tech addicts, anti-social, or social justice warriors.
Introduction
This generation in their 20s feels they’re too old and have not achieved enough. The hustle culture comes from the pressure to achieve success quickly in this fast-paced nature of the digital age. One of the reasons is that, with several devices, this generation is accustomed to multitasking and rapidly switching between activities. Furthermore, Gen Z grew up with access to any information they require. Because of this ease of availability, Gen Z has developed shorter attention spans.
Hedonistic life has become a way to catch up for the lost times
The pandemic denied them access to important milestones of their lives. This altered state, post covid and the opportunity to reflect on their mortality during lockdown is expected to unlock a more hedonistic and carefree way of life.
Our take on Designing for Gen Z
Gen Z is known for its individualism and they expect designs to cater to its need for uniqueness and individuality. As a result, the designs that appealed to the Millennials are now outdated. Gen Z has different expectations from digital product experiences. And since they are currently the target market for brands, it is crucial to develop brand messages, visuals, and online experiences that engage them and cater to their needs.
Here we have discussed how designers can stay ahead of the competition while designing for Gen Z.
What Gen Z is seeking from brands
Inclusivity
Gen Z is more accepting of people irrespective of their gender, race, or color. This is one of the factors brands are using to lure Gen Z and Millennials. Younger consumers expect brands to stand for something, not just sell products. In fact, 69% of Gen Z say they are more likely to buy from a company that supports social causes.
Personalization
91% of consumers are more likely to shop with brands that provide relevant offers and recommendations. As personalization becomes a non-negotiable for Gen Z, brands are increasingly reimagining activities that were typically done in a physical space, such as digital experiences.
Instant Gratification
Generation Z prefers video and image-sharing apps, online messengers, and social networking services mainly for likes, comments, shares, and followers which encourages them to create more content to receive social validation.
Value for Digital Identity
Users of Gen Z are eager to share information in exchange for a more personalized experience. For instance, if it results in a better experience by seamlessly connecting to their friends and interests, users will have no trouble logging in to a new app using their Instagram or Twitter credentials.
What is Gen Z’s buying behavior like
They lean more toward sustainable shopping
The concern that Generation Z has for the environment and the future presents a tremendous potential for sustainable corporate growth.
“Did you know? 73% of Genz consumers are willing to pay 10% more for sustainable products.”
Social Commerce Growth
Social commerce is expected to account for 4.3% of all retail e-commerce sales in the US in 2021. Social commerce is an e-commerce trend that is here to stay, and it will be very powerful in the future.
Influencers have a great influence
Compared to older age groups, Genz shoppers are less likely to trust companies. Instead, they choose to follow influencers on Instagram and YouTube, who have a high following and reach and decide if the product is worth buying or not.
Mobile Payments
Gen Z embraces mobile payments like mobile apps and mobile wallets. Over the past years, mobile apps have been increasing in popularity, and have given great results.
Gen Z consumer characteristics
Educated Consumers
They frequently conduct research and analyze choices before making a purchase decision since they tend to be “educated/informed consumers.”
Compare Prices
They frequently have far less loyalty to particular companies and instead seek to compare prices to get the best deals.
Company Ethics
They prioritize company ethics and brand integrity even more than Millennials do.
Shop via Social Media
Out of all the generations, they’re the most likely to shop via social media as they are open to exploration.
Seek High-Quality Products
Gen Z consumers have high standards for both customer service and product quality.
How brands are creating a habit-forming loop
Fomo
TikTok uses FOMO to keep users engaged & provides a steady stream of new and trending content that they might not want to miss out on
Engaging Rewards
Rewards in this case are the number of likes/comments one receives. The users mostly go back to the app to check to see how it’s performing & end up scrolling for hours.
Intuitive UI
The interface is easy to use. Simple features like a scrollable feed, easy to edit videos tool – Encourage users to experiment and create videos themselves.
Social Validation
Features such as likes, comments, shares, and followers encourage users to create more content to receive social validation.
Personalization
Based on a user’s profile, browsing history on the app, etc, the app’s algorithm curates content through machine learning to personalize the feed which helps increase engagement.
Let’s understand how TikTok, an app which is designed and developed, especially for Gen Z & is using this habit-forming loop to cater to their needs –
The app is highly engaging and interactive.
Ease of use – all they have to do to get new content is SCROLL.
Accounting for shorter attention span – Short, catchy videos.
More user control – Creating and sharing is easy and gives users control – making it hard for the users to pull themselves away from the app.
Personalization – Use of algorithms to PERSONALISE content.
The use of rewards – likes, comments, increase in the number of followers (instant gratification) makes the app more addictive.
The Road Ahead
Gen Z consumers will hold the largest share of the consumer market within the next few years. Given how different this generation is from the Millenials, we, at The Minimalist, believe that in order to keep Gen Z engaged, we need to be more inventive, explorative, and creative with our designs.
For organizations to stay ahead of the competition, having a creative and out-of-the-box solutions approach will certainly appeal to Gen Z.
Being a sovereign currency, CBDC has special advantages over central bank money, such as integrity, trust, safety, and liquidity. Among other reasons, lowering operational costs associated with physical cash management, promoting financial inclusion, bringing resilience, efficiency, and innovation to the payments system, enhancing the efficiency of the settlement system, fostering innovation in cross-border payments, and giving the general public access to uses that private virtual currencies can offer without the associated risks are the main reasons for investigating the issuance of CBDC in India. In rural areas, using CBDC’s offline capability would be advantageous because it would increase availability and resilience even in the absence of mobile service or electricity. The Reserve Bank of India (RBI) pilot of its central bank digital currency launched and joined a small cohort of central banks researching central bank digital currencies (CBDCs) that have advanced past the conceptual stage to the pilot stage. This has pushed the urgency to create digital solutions for this new financial technology. The Minimalist has proposed some suggestions to help create a smooth user experience by utilizing personalization, data visualization, security, and more.
Introduction.
Defining Central Bank Digital Currency
Central Bank Digital Currency (CBDC) is a digital variant of money issued by a central bank, similar to banknotes and coins which could be used by businesses and households to make payments and as a store of value. CBDC is a fiat currency and not backed by any commodities like silver and gold. Below shows how CBDC would be a universally accepted and accessible form of money issued by the Central Bank.
The Reserve Bank of India (RBI) has defined CBDC as, “the legal tender issued by a central bank in a digital form”. The main features of the CBDC described by RBI are its similarity to fiat or sovereign currency, and its greater accessibility and acceptance due to the given similarity. The RBI also ensures that CBDC will resonate with the core functions of the fiat currency as they will be used in making transactions, as legal tender, or as a means to safely store value.
A CBDC has a combination of digital ledger technology and cryptography to offer this electronic variant of cash. It is a central bank’s liability to issue as a central bank reserve (if held by financial intermediaries) and mimic characteristics of physical cash (if held by individual users).
A central bank’s core function is to provide financial stability and monetary stability. The CBDC would create new opportunities and affect them in two ways.
Current monetary system and payments. CBDC would be expressed in the form of money units like Euros, Dollars, Yen, and other similar worldwide currencies and have the same equation as banknotes and coins.
It may have monetary units of 10, 50, 100, 500, and 1000 like physical banknotes and coins. The central bank will require a new configuration to issue CBDC and make transactions digitally. CBDC has to consider two factors to make this possible
Database to register CBDC.
An application to execute transactions of CBDC
CBDC can be used to exchange services and goods and can also be considered legal tender. Since COVID-19, we have seen a vast increase in the use of digital transactions. Moreover, the latest technologies have allowed financial institutions and governments to provide a credit-based platform in which balances and transactions are recorded digitally.
How does CBDC vary from physical cash?
Cash offers great convenience, is usable, easy to store, and is highly popular worldwide. It is difficult to measure a country’s progress from cash to digitization considering the fact that cash has a high degree of anonymity. It is challenging to measure the exact amount of transactions and the worth of such transactions. CBDC is a digital version of the Rupees kept in your wallet. Storing and transacting with CBDC would be more efficient and convenientthan physical cash.
Centralized and Decentralized ledger systems
Technology consideration shall always remain CBDC’s base; it is digital and the selection of the technology depends upon several factors like sound technical administration, technical stability, and flexibility. CBDC would require a large-scale digital platform hence careful planning is required. On account of these many factors, CBDC should be configured like the functionality of economy, reduce frauds, decentralization for effective participants amongst users, authentication, data integrity, high volume of currency, rate of transactions, design for variable workload, and protection from cyber-attacks.
A ledger is a collection of accounts or series of blocks in which account transactions are recorded digitally after suitable verification by the designated authorities.
There are 2 types of ledgers – Centralized & Distributed Ledger.
Centralized Ledger System
A Centralized Ledger System is acollection of all transactions which is controlled and finalized by a single source. A bank is an example of a centralized asset ledger as the bank has total control over the transactions which are published in the ledger, such as a bank statement. If the central authority shuts down suddenly, then all the transactions fail and cannot be processed further and this can lead to misinterpretation of the transaction details in the bank statement. The activity affects all the end consumers. If a bank has the intention of cheating, then the bank can loot the money of all its clients which can cause serious financial loss. The centralized ledger system doesn’t provide restrictions on the activities that can be done by any user on the ledger, as a result, any user can change transaction details on a ledger.
Distributed Ledger System
A Distributed Ledger System is a shared ledger that is not controlled by a single entity. DLT allows recording their details in the system inmultiple places and at the same time. A single change to a ledger is reflected in all copies within seconds.Cryptography maintains the accuracy and security of the assets stored in the ledger. The assets can be financial, physical, legal, or electronic. It is a fast-developing approach and allows sharing across the ledger (multiple data storage) that have the same data records The ledgers are controlled and maintained by multiple computer servers (nodes).
If a location suddenly shuts down, the remaining locations have the capacity and enough data to maintain the ledger in case of unavailability of the non-working location. That’s how DLT decreases errors and provides real-time information on transactions.
What is Blockchain?
Blockchain is one type of Distributed Ledger System. Blockchain is an advanced database system for recording information in a manner that makes it hard to cheat or hack the mechanism. The popularity and success of Bitcoin made blockchain a trending technology in the world. The technology would be helpful in finance, healthcare, education, and many other sectors.
Blockchain applies methods of algorithm and cryptography to create and verify constantly growing data structures that create a chain of blocks or transaction of blocks that works as a ledger. In multiple computers, all the transactions are recorded with the help of a decentralized public ledger. A record of a new transaction is added as a new block to the chain whenever a new transaction occurs. After performing an authenticity check of the transaction the new block is added to every participant’s node ledger.
Approach
Implementation of CBDC
BIS (2020) highlighted risks associated with the issuance of CBDC that affects financial stability and negatively impacts the monetary system. Hence, BIS adopted a risk-based approach and mentioned three basic and important principles for a central bank to issue CBDC.
It should be aligned with public policy.
It should co-exist with the current form of money.
It should increase the work efficiency of the payment system through competition and innovation.
There are two ways to implement CBDC in the current Monetary system.
Single tier method
Two-tier method.
Direct (Single-tier model)
In a direct implementation, the central bank makes it possible to issue CBDC directly to everyone. Community banks and informal gig workers can also deposit their money directly with the bank. In this method, a Central bank would be responsible for all aspects of the banking system like account keeping, issuance of money, and verification of transactions.
Indirect (Two-tier model)
In an indirect implementation, the Central bank indirectly issues CBDC to the end users through an intermediary layer. The layer would be commercial banks to constitute a claim like wholesale and retail payment. The central bank keeps an eye on the bulk balance of the intermediaries rather than end users and the bank has to make sure that the wholesale balance with intermediaries is equal to the retail balance of the end users.
Hybrid (Two-tier model)
In the Hybrid implementation, an intermediate or payment service provider represents a claim along with a direct claim on the central bank. Central banks issue CBDC to other financial authorities and make those entities responsible for direct transactions to the end consumers. RBI can develop and issue tokens to the authorized (Token Service Provider) entities issued in form of tokens who later distribute amongst end users who engage in retail activities.
Adoption of Graded Implementation of CBDC in India
The main aim of the RBI is to maintain monetary and financial stability and to create efficient and secure payments. India is ahead of many countries in terms of innovation in digital payments. The Reserve Bank will be able to adopt the method of proof of concept, pilots, and launch to implement a graded approach CBDC. The motivation behind issuing CBDC in India includes financial inclusion, trust, security, integrity, resilience, and innovation in the payment system.
The design of CBDC should be aligned with financial stability, efficient operations of payment systems and currency, and the stated objectives of monetary policies. The RBI will use Blockchain and other advanced technologies to make CBDC safe from cyber attacks.
As CBDCs are intended to mimic the sovereign or fiat currency issued by the government, the goal behind implementing this financial change is to bring further ease to the system. The RBI aims for CBDC to showcase the same features that are associated with fiat currency by the users. Some “key motivations” identified for launching the CBDC in India include the reduction of operational costs that come with printing fiat currency, enhancing financial inclusion and accessibility, incorporating innovation in the system, easing cross-border transaction experience, and allowing the public to experience the benefits of digital currencies without the attached risks seen in the case of cryptocurrencies (PIB, 2022).
Types of CBDC
India has exhibited primacy in digital payment innovation. The latest payment methods are available 24 hours, a to both retail and wholesale consumers. The payment systems have the lowest transaction cost and are working effortlessly day and night.
CBDC can be classified into two broad categories
Retail CBDC (Individual users and retailers)
Wholesale CBDC (Rare financial institutes and some banks)
Retail CBDC
Targeted and are made for the general public to increase features like accessibility, availability, and traceability, and the main functionality is to support and ease daily financial transactions. With the aim of having greater accessibility, CBDC will allow users with no bank accounts and/or limited network connectivity to obtain and conduct transactions with this digital currency, at a lower transaction cost due to limited interference from intermediaries. Retail CBDC is a direct liability of the Central Bank and provides benefits of settlement and gives safe money for the payments.
Wholesale CBDC
Focused on increasing the efficiency of payments and security of settlements for larger transactions and organizations. A particular aim of the wholesale CBDC is to help users resolve any concerns attached to liquidity and counterparty credit that are normally an area of concern when large transactions are involved. Wholesale CBDC can also offer large retail payment benefits and act as simpler means for settlement systems with real-time and transparent operations. Wholesale CBDCs are highly suitable for central banks in advanced economies, exchanging or trading purposes between central and private banks, and other core organizations.
The Indian Ministry of Finance rolled out its curricular or public notice declaring the beginning of the trial phase for CBDC in India by the Reserve Bank of India (RBI). The use cases of wholesale CBDC were limited to “settlement of secondary market transactions in government securities” making them more suitable for complex organizations within the reach of government jurisdiction. The aim of wholesale banking is to improve the overall banking system by reducing transaction costs by minimizing or eliminating the need for intermediary settlement structures like collateral.
The retail CBDC on the other hand was tested with a closed group of users composed of customers and merchants. For retail CBDC, the intention was set clearly as it is meant to take the place of the traditional paper currency or legal tender issued by the bank. Users will be allowed to conduct transactions through digital wallets offered by respective banks which are meant to embody “all the features of physical cash like trust, safety, and settlement finality”.
Goals of CBDC
The main reason or goal to issue CBDC is to ensure end users can access legal tender if cash were unavailable. CBDC may improve the efficiency of the payment system of both retail and wholesale consumers from the point of sale, peer-to-peer, or online. Usage of cash is reducing because of easily available credit cards and easy-to-use and contactless money transaction apps. Cash is difficult to trace to the government so cash becomes vulnerable to tax evasion, money laundering, and illegal transactions.
CBDCs could assist banks to address systemic objectives such as
Financial inclusion (those who cannot afford or have a bank account)
Reducing money laundering and fraud
Promising a dominant substitute for digital payments
Improve local payments innovation
Developing a new option for monetary policy.
Decrease cross-border transaction costs
CBDC’s benefits to businesses and consumers:
Increase privacy and mobility
Improve convenience
Provide financial security and accessibility
Comparison of payment methods
An Indian CBDC should be able to integrate with current payment and transaction methods like UPI, Paytm, digital wallets, etc. The integration should have user adoption, compatibility with other payment methods, and work efficiency which would be helpful to achieve user adoption.
CBDC vs. Cryptocurrency
Crypto is a new experience and it is getting the attention of a larger number of populations worldwide. Crypto is developed as a new technology. The value and efficiency of crypto are not stated, but in the current scenario enact all the functions similar to traditional transaction methods. It is observed that the price and the returns of crypto positively affect user adoption. CBDC is a centralized digital currency that is controlled by the RBI. Hence, CBDC is a legal tender and can be kept in bank accounts, while it may require blockchain technology or advanced mechanisms for security. CBDC represents the value of fiat currency and is designed for stability and safety.
Crypto is decentralized and not connected to or controlled by any government authority and needs to be stored in digital wallets and is hard to duplicate or forge. Crypto is designed to prevent tampering and is dictated by investors’ interests, beliefs, and usage.
CBDC vs UPI
UPI (Unified Payment Interface) has been employed in India since 2006. The aim of UPI is to provide a platform for online payments, increase financial inclusion, economic development, and effective methods for digitalization in India. UPI works on a technology named open API (Application Programming Interface). Two parties can connect with each other through an open API interface for financial transactions. UPI is a highly accepted payment method in India due to three factors.
Link with Aadhar card
Easy to use
User-friendly app for transactions. Moreover, fintech companies easily integrate with UPI and can provide value-added services.
Digital Rupee is a form of currency similar to fiat currency. In CBDC, when you make a payment to an individual or at a shop, CBDC will move from your wallet to your wallet. You can keep it in your digital wallet as you keep physical currency in your pockets.
In UPI, the transactions occur between two banks or digital wallets to account or account to a digital wallet. UPI is just an interface to make transactions. There is always an intermediation of the bank. While using the UPI app, your bank account gets debited and money gets transferred to the other’s bank account.
Analysis of different payment methods
To understand the standing of CBDCs amongst other existing forms of payments, we compared them on a range of criteria like user adoption, anonymity, accessibility, security, cost, privacy, etc.
Based on the above table, we can see that CBDCs have higher user adoption owing to their features of increased accessibility to users with or without internet and/or bank accounts, making them more versatile. However, in lower city tiers, attitude could be a hindering factor in adopting new technology without the necessary awareness or education. Therefore, it can be concluded that cash would have higher financial inclusion as it is widely used for a prolonged period of time, gaining the trust of all users. Even though CBDCs are secure due to their blockchain technology that will protect users against malicious attacks, users with higher privacy and security concerns may not openly welcome this shift in the financial system.
Pros and Cons of CBDC
CBDC is a sovereign currency that provides a wide range of advantages like integrity, safety, liquidity and trust for the payment system. The main aim of implementing CBDC in India is to decrease operational costs, enhance financial inclusion, efficiency, and innovation of the payment system, improve efficiency in cross-border transactions, and provide a virtual platform to the general public for daily transactions without any risk.
Pros of CBDC
CBDC enhances financial inclusion for individuals from remote areas or developing countries, low-income individuals, families with unmet necessities, or user groups with no bank accounts. Moreover, CBDC (via central bank) would reduce the financial load caused by the issuance of currencies by tech firms and unions, and will enhance processes and speed of the monetary systems, quick settlements in large values, increase the number of cross-border payments and the ability for central banks to credit household CBDC accounts. It will help the government to influence more money flow in the economy and its borrowing cost which will reduce the popularity of cryptocurrencies due to their volatile nature.
Cons of CBDC
Financial Risks increase in the higher exchange rate and lending costs. CBDC would have lower user adoption from remote areas with limited access to the internet, banking facilities, and relevant awareness. Cyber security risks, vulnerability testing, and costs of protecting the firewalls would be higher for CBDC. Operational risks would be high as the employees have to be re-trained and groomed to work in the CBDC culture. A CBDC can be created in minutes and seconds, which if distributed widely may cause inflation without increasing. Moreover, CBDCs will require large-scale allocation and countrywide infrastructure for distribution and payments as these aspects are required to make CBDCs useful.
Cybersecurity and CBDC
With increasing facilities and advancements provided by technology, many countries have considered digitizing their currencies to make their financial structures more flexible, versatile, and accessible. But with digitization comes the risk of cybersecurity concerns from various ends including the risks from private sectors, end users, and the integrity of the financial system itself. As CBDCs will be public-facing and more open when compared to cryptocurrencies, there would be less threat to end users from the private sector, thus painting CBDC in a positive and achievable light. But on the other hand, the increasing number of cyber warfare attacks can put governments in a tricky position as it could pose a threat to the national financial system.
The World Economic Forum (2021) summarized 4 major cybersecurity threats
Credential Theft and Loss
Access to CBDC will be given in the form of credentials or passphrases which make it more prone to theft as they can be simply communicated through paper or physical tokens. Moreover, the physical devices that store the credentials can be susceptible to manmade or natural disasters, leaving the user’s identity and money vulnerable.
Users with Privileged Roles
Central banks, government insiders, law enforcement, and other agents may have privileged access to information or to actions like freezing or withdrawing funds from users’ accounts. On the other hand, third parties or non-central authorities may accept or reject transactions due to malicious intents, putting the security of end users at risk.
System Integrity and ‘Double Spending’
It is possible for intermediary banks that are not subject to central bank regulation to have powers that might be used maliciously to either invalidate transactions or prevent users from engaging in network activity. Denial-of-service attacks (DDoS) and censorship are consequently caused by this.
Quantum Computing
With the rapid advancement in technology, emerging quantum computing will ultimately impact all financial services as it would revolutionize the way all systems work. It would comprise data encryption methodologies and cryptographic primitives used for protecting access, confidentiality, and integrity of data. This evolution would once again destabilize the financial system, causing more concerns for users who have already adopted CBDC.
In addition to these core concerns, other problem areas will also have to be addressed while designing for CBDC. Centralized data collection can be easily used for citizen surveillance, particularly payment activities, therefore reducing the confidentiality or security behind these transactions. However, this risk can be mitigated either by not collecting or choosing a validation architecture where only the necessary information is seen to validate the transaction. The security guarantee of the ledgers is dependent on third-party vendors whose involvement can be mitigated through regulatory mechanisms such as auditing requirements and stringent breach disclosure requirements. Security concerns have to be kept at the core of designing CBDC as it can soothe the concerns of users with high privacy needs or can be used as a way to establish trust with users with a wavering attitude towards technology and CBDC.
Designing for CBDC
Users and Use Cases
In October 2020, the Bank of International Settlements (BIS) collaborated with several banks the Bank of Canada, the Swiss National Bank, and the Bank of Japan, among others, to understand the core features and foundational principles of CBDC. As there are two broad categories of CBDCs, namely wholesale and retail, the organization found various use cases for different users and scenarios. Several use cases have to be kept in mind while designing CBDCs, which are as stated below:
Well-connected user with a bank account and options for digital payments
Users with limited/no internet and from remote areas
Unbanked users who either do not have a bank account or do desire a bank account
Users with varied accessibility needs
Users that prioritize privacy
Small merchants
To understand the requirements of users, the user stories were defined as “small narrative of a particular user”. User stories aim to convey the user’s goals, tasks to be accomplished, and pain points that may hinder their goal accomplishment. In the case of CBDC, creating user stories will allow us to understand the thoughts, feelings, emotions, and needs of the users at each step of the transaction process or mere interaction journey with CBDC.
Users tend to seek a form of currency or money that will maximize the personal benefits and reduce associated risks and costs. The relative weight of different criteria will vary based on a number of factors such as location, accessibility, attitude towards technological advancements and banking, and cross-border transactions, in addition to some of the use cases mentioned above.
Given below are different use cases that can be uniquely applied to India and the relevant user groups to make CBDC more accessible, approachable, and open to the population.
Programmable Payments (DBT)
CBDC can be used for providing social benefits in other targeted payments in the country, such as the LPG subsidies that can be credited and authorized at LPG agencies and can be further converted to general CBDC or fiat currency at any bank.
Retail payments
Instead of using cards and fiat money, the retail stores can be equipped with specially designed CBDC instruments that will help users make seamless transactions through their wallets or directly to and from the respective bank account of the merchant or the user. This would allow transactions to take place between and among a range of different user groups such as consumers and businesses.
Easier MSME Lending
With direct connection and authentication coming from the bank, drawing accurate borrower risk profiles will become easier, allowing lenders to give more opportunities for MSMEs. Additionally, finances can be easily and directly disbursed without causing any additional transactional or intermediary fees, making borrowing and lending more accessible and affordable. Moreover, the traceability of CBDC in the central system can add to the creditworthiness and transparency which can furthermore increase its resiliency to forgery and financial misconduct.
Offline Payments
The design of CBDC would include an offline wallet based on Near-Field Communication (NFC)-abled devices to allow users with weak or no network to make payments that will be enabled as soon as a secure internet connection gets established.
Some other wide ranges of use cases involve payment settlements between businesses, using CBDCs as a way of identity management for security concerns, cross-border payments, and asset transfers.
The key point to consider while designing CBDC
As CBDCs aim to replace fiat currency or sovereign currency, they should be able to present all the features, characteristics, and advantages that come with physical currency. The design of CBDC is highly reliant on the functions it is expected to perform by various user groups and how the design impacts or alters the existing payment systems, and policies, as well as the structure and stability of the financial system.
The Bank of International Settlements (BIS) (2020) followed a risk-based approach in an effort to identify potential risks, specifically the risks that can overturn financial stability or impact financial market structures. The considerations are given as follows:
It should have a “do no harm” policy, i.e., it should not hinder public policy or cause any turbulence for the stability of the banking systems.
It should coexist with the current forms of transactions and currencies allowing the users more opportunities and freedom to opt for their preferences.
CBDC should be a means of promoting innovation and technological advancement with the main purpose being increasing accessibility for users.
In an article published by the Reserve Bank of Australia (2020), the authors suggest certain design considerations that need to be accounted for while developing CBDCs. The paper elaborates on how account-based CBDCs would require a separate ledger to keep track of the transactions made by users and merchants and would ensure the transfer of CBDC balances from one account to another, while in the case of a token-based CBDC, it would closely simulate the current system where a token represents a “claim” of the central bank. Looking at this classification also poses the question of the degree of security of CBDCs. Account-based CBDC may have lesser security due to the maintenance of a detailed ledger, thus lowering the anonymity of the transactions. There are options available for intermediate privacy in the form of “privacy vouchers” as tested by the European Central Bank (2019) to provide the users with complete anonymity for smaller transactions while larger transactions will be visible to the government. Yet another design consideration for CBDC would be to determine the best technology behind the innovation. Though the Bank of England (2020) suggests the use of Distributed Ledger Technology (DLT) owing to its high resilience and availability, the drawbacks of this system are largely focused on the retail segment where the unavailability of a payment system is often a concern. DLT could negatively impact essential user requirements such as performance, privacy, and security.
Examples: eNaira (Nigeria)
eNaira is a Central Bank of Nigeria-issued digital currency that provides a unique form of money denominated in Naira. In their effort to improve accessibility, eNaira’s background research illustrates how the government has considered several factors allowing direct disbursements of welfare to citizens, facilitating diaspora remittances, and improving the ease of cross-border transactions while reducing the additional costs. They aim to enable and empower each individual or community to make reliable, safe, and efficient payments while reaping the benefits of innovation, inclusion, and accessibility through their design. eNaira also employs the three general principles laid down by the BIS and further expanded them to suit the native needs by incorporating principles like inclusivity, innovation, efficiency, resilience, and a product that is proudly Nigerian. They also took into consideration the World Economic Forum and BIS to establish their architecture of using a “hyper ledger fabric variant” of DLT and other design principles for interoperability, accessibility, and security for users
Examples : Digital Yuan – eCNY (China)
The Deutsche Bank conducted research to understand the e-CNY or the Digital Yuan published by the Public Bank of China (PBOC). The PBOC, central bank, and e-CNY officials have conducted several pilot tests to check for adoption, accessibility, and general attitude of users towards the CBDC.
Some of the goals for the CBDC as noted by the Deutsche Bank research were as follows
A long-term goal was to create a currency that is widely accepted across the globe and has a place in the market similar to other digital currencies. This long-term goal of establishing the digital currency was made in accordance with the design principle that states that the introduction of CBDC should not create an imbalance in the existing financial system and should rather be treated as an additional option for the users to make transactions.
The more immediate short-term goal observed was to “reshape China’s current payment systems”, by presenting a more accessible and versatile method of payment at low cost and security risks.
The Public Bank of China, in its e-CNY design paper, has established the design considerations for the CBDC and incorporated its framework for both the operating system as well as the e-CNY wallet. The e-wallet can be personal or corporate, software or hardware, and a parent or sub-wallet based on the type of holder, carrier, and authorization respectively. They have also highlighted the principles behind the development of CBDC, which are compliance with laws and regulations, safety and convenience, and openness and compatibility. Drawing from the works of BIS and the models proposed by other governments across the globe, the e-CNY also has features like flexible identity as an account-based or value-based system, non-interest accrual, low cost, settlement upon payment, managed anonymity, safety, and programmability.
The Minimalist’s design perspective
Traditionally, design has been thought of as an eye-catching marketing tool used to entice customers to purchase a product. Historically, financial products were also complex and difficult to comprehend. In recent years, there has been a shift in focus to creating rich user design experiences as users become more intuitive when navigating the digital world. Financial institutions, for example, are increasingly realizing the importance of providing their customers with feature-rich mobile banking applications that are easy to navigate and use. Banks will struggle to improve customer satisfaction and win the hearts of digital natives unless they provide a seamless digital banking experience. A study from Chase bank shows that 99% of Gen Z and 98% of Millennials use mobile banking apps. According to research, users now spend 10.8 times more time on FinTech applications, which are typically designed with user experience in mind, than on traditional banking applications. This has made it clearer than ever, that user-centricity should be at the forefront of design. Customer centricity means users expect a more ethical, responsible, and honest attitude from banks and their products. Transparency and content simplification go a long way toward achieving customer-centricity. Our process at The Minimalist aligns and expands on this avenue of user-centricity by combining business needs and user needs to create a thoughtful, impactful, delightful, and innovative experience. The Minimalist’s experience design and technology department has translated their expertise in designing digital products across financial services like insurance, banking, and payments to the emerging CBDC/digital rupee concept. Some design suggestions for a successful experience are listed below:
Personalization
Personalisation uses user behavior data and machine learning to deliver content and functionality that is tailored to a user’s specific needs or interests. Personalization is implicit — it is controlled by the system and does not require the user’s conscious input or effort. Users are profiled individually and content is tailored to each individual user (simple experience to Netflix, Spotify, or Instagram).
Security
Consumers today demand biometric features such as fingerprint and facial authentication. Offering the most up-to-date security improves user experience while also fostering user confidence. Over the next 10 years, businesses should concentrate on developing new techniques for detecting fraud, monitoring activities and potential risks in real-time, and expanding the availability of services online.
Intuitive, Delightful Designs
The inherent appeal of digital finance is the ease of use, but it cannot be so effortless that it is easy for users to make mistakes with their money.
Prioritization of content
Sequence information and actions
Using common patterns (Jakobs Law)
Data Visualisation
Users will adore dashboards with tables and graphs offering condensed financial data. If you want to greatly enhance the experience of your users, it is worthwhile to incorporate this trend into your application. Navigation and System Status. While Gen Z and Millenials are digital natives while designing a service we need to cater to a larger audience. Communicating the current status allows users to feel more in control of the system, take the appropriate actions to reach their goals, and ultimately build trust in the brand. Communication increases trust, one of the key elements impacting customer retention.
Summary and Conclusion
As economies become increasingly digital, user needs and demands have evolved over the period, and launching CBDCs would have to follow the steps in order to meet the user needs. The Central Bank could accommodate evolving user needs by designing a flexible core system and integrating a diverse ecosystem of intermediaries delivering choice, competition, and innovation. The weight of the different factors at play in determining whether users would adopt and use CBDCs would largely depend on the public policy objectives and future market conditions in each jurisdiction. CBDC would fulfill all the needs, goals, and requirements and ease the pain points of end users, and one day it will take the place of “physical currency”. Given the foundation and goals of the CBDC established by the central government, there can be immense opportunities to design interfaces for user-facing and B2B platforms for CBDC wallets, transactions, and much more. There is great scope for design principles and specialists to prioritize user needs, use cases, and government goals and innovate designs that can make the transition from traditional to digital currency much easier for the users.
