How Midsize Banks Can Thrive Through Research and Product Design in the Digital Transformation Era

Eylul Pierce, AVP, Digital Product Manager II, Tri Counties Bank

Through this article Eylul Pierce emphasizes the crucial role of in-depth customer research for midsize banks to thrive in the increasingly competitive financial landscape, highlighting the value of tools like personas and customer journey maps in translating research into empathetic product design, ultimately building trust and loyalty by addressing both the practical and emotional needs of customers.

The banking industry is transforming rapidly, driven by digital adoption, evolving customer expectations and increasing competition from FinTech’s. With banking services now offered by more than just traditional banks, the market has grown increasingly complex. While large institutions rely on their extensive resources to adapt, midsize banks face unique challenges due to their limited resources and narrower product offerings. However, this also presents an opportunity to stand out by focusing deeply on understanding their customers and delivering tailored solutions.

To succeed in this environment, midsize banks must prioritize thorough research that goes beyond surface-level data. True differentiation comes from seeing the whole picture. Combining quantitative data, such as transaction patterns, with qualitative insights, like customer motivations and frustrations. My experience in data analytics and market research has shown that this holistic approach is critical for carving out a niche, building trust and delivering meaningful, customer-focused solutions in a competitive landscape.

The Role of Research in Banking

Unlike large institutions that aim for broad, mass-market audiences, midsize banks have the opportunity to focus on specific niches. Through targeted research, they can identify unique customer needs, shared values, or emerging market gaps to address.

For example, behavioral data might reveal a growing segment of gig workers make up a significant portion of a midsize bank’s customer base. Similarly, qualitative insights could highlight concerns among older customers, such as fear of fraud or difficulty navigating digital platforms, which might be preventing them from fully adopting mobile banking.

By focusing on these specific groups, midsize banks can position themselves as trusted partners that provide solutions tailored to their customers’ unique needs. This targeted approach not only helps build loyalty but also creates competitive differentiation that larger banks may struggle to replicate.

Seeing the Whole Picture: The Holistic Approach to Research

Data alone only tells part of the story. Quantitative metrics, such as transaction histories and app usage patterns, reveal what customers are doing but not why they’re doing it. That’s where qualitative research such as interviews, focus groups and surveys becomes essential. It helps uncover motivations, frustrations and unmet needs that are often hidden in the numbers.

By combining quantitative and qualitative research, midsize banks can uncover pain points and anticipate emerging trends. For instance, research might reveal that a confusing loan application process is causing customers to abandon it midway or that there’s increasing demand for tools like financial literacy modules among younger generations. This holistic approach doesn’t just provide insights. It embeds empathy into product design, addressing both practical and emotional customer needs such as trust, convenience and security.

Understanding customers on a deeper level allows banks to uncover unmet needs and deliver targeted solutions. Designing with empathy ensures that products address both practical and emotional needs, creating trust and loyalty

Turning Research into Product Design

Research is an integral part of product design, providing the insights needed to create tailored products that address specific customer needs. For midsize banks, leveraging tools like personas and customer journey maps is essential in understanding and empathizing with customers, allowing them to refine and optimize experiences while delivering meaningful solutions.

Using Personas to Guide Development

Understanding your customers is the foundation of designing meaningful products and for midsize banks, identifying key customer segments is essential.

Let’s go back to the example of gig workers. Through research, a midsize bank might discover that gig workers make up a significant portion of their customer base. These individuals, such as freelancers, independent contractors and side-hustlers, represent a growing demographic with unique financial needs. Unlike traditional employees, gig workers face challenges like irregular income, managing multiple clients and preparing for taxes without employer support. By focusing on this segment, banks can position themselves as trusted partners for a group often underserved by larger institutions.

Take Emily, a 32-year-old freelance designer. She struggles to track her income, manage expenses and handle taxes. Her financial stability feels uncertain and she needs tools that simplify her financial management while giving her peace of mind. A bank focusing on gig workers like Emily could design solutions tailored to her needs. These might include a real-time cash flow tracker to help her monitor her finances, automated invoicing tools synced with peer-to-peer (P2P) payment platforms and a tax estimator with quarterly reminders to ensure she stays on top of her obligations. By addressing these specific challenges, the bank not only provides practical solutions but also builds trust and loyalty by showing it understands her world.

Refining Experiences Through Journey Mapping

Journey mapping takes this understanding a step further by examining how customers interact with a bank’s products and services. For gig workers like Emily, mapping her journey might reveal pain points, such as a generic onboarding process that fails to guide her toward tools she needs most, or dashboards that prioritize irrelevant features over essentials like cash flow visibility or tax preparation.

Using these insights, a bank could enhance the experience for customers like Emily by offering a personalized onboarding process that showcases tools specifically tailored to address her unique needs. A simplified dashboard could prioritize features like income trends, upcoming payments and tax deadlines. These improvements make the banking experience seamless, helping Emily feel supported from the start.

Empathy as a Differentiator

While digital transformation often emphasizes efficiency, midsize banks can stand out by humanizing their offerings through empathy grounded in research. By combining data with insights into customer emotions, banks can design solutions that truly resonate.

For gig workers like Emily, financial stability is both a practical and emotional need. Research might reveal common concerns such as missed payments, tax deadlines, or unpredictable cash flow, highlighting the need for tools that provide clarity and reassurance. Features like payment alerts, predictive cash flow insights and interactive tutorials, along with secure live support, can address these concerns while building trust. By embedding empathy informed by research into their designs, midsize banks can create deeper connections with their customers and differentiate themselves in the market.

The Path to Thriving in 2025

Thriving in the digital era requires focusing on a few key areas for midsize banks. First, investing in research is essential. Understanding customers on a deeper level allows banks to uncover unmet needs and deliver targeted solutions. Second, midsize banks can stand out by concentrating on niche markets where they can offer tailored value. Finally, designing with empathy ensures that products address both practical and emotional needs, creating trust and loyalty.

In 2025, the banks that prioritize research, targeted strategies and human-centered design will be the ones that succeed. By seeing the full picture and turning insights into action, banks can carve out their place in an increasingly competitive market, building long-term connections with the customers they serve.