The Death of Good Enough UX in Banking Apps: How AI Is Commoditizing Digital Banking

Here’s an uncomfortable question every financial leader should ask: if your financial product can be replicated by any generative AI in a few prompts, what exactly is your organization’s competitive offer? Because today, AI can already generate the flows, the screens and the “user-friendly” experience your team spent months to design. The baseline has shifted. McKinsey estimates that gen AI could automate up to 70% of the tasks. Service design execution will be automated, too. And if your advantage lives there, it’s already gone. Advantage is moving from digital product output to organizational capability.

For twenty years, financial institutions have operated non-systemic UX initiatives to compete on being “good enough” in digital. Good enough online and mobile banking. Good enough onboarding. Good enough dashboards. Good enough usability. That formula quietly supported billion-dollar banking and financial businesses. But something just broke.

Have you tried prompting a banking app’s wireframes and interface with ChatGPT, Claude, or Gemini? The output is already not far from mid-level design execution. In the next decade, AI will produce UX that’s close to solid mid-level design: clean, logical, and usable.  According to McKinsey, AI could add up to $340 billion in value annually to the global banking sector by skyrocketing productivity.

And that’s exactly the problem. Because when “good UX” becomes instant and free, it stops being an advantage. It becomes an infrastructure-level commodity.

We’ve all heard a common narrative that AI will replace designers. It won’t. But it will replace the generic “good enough UX design” made by designers.

Mediocrity was Enough in Finance, Until Now

Clean dashboards. Predictable onboarding. Standard account management. Loan, transaction and investment flows that look and function exactly the same. Mediocrity was completely fine in the world of financial services.

Modern banking interfaces don’t do anything particularly special. Many of them aren’t even intuitive, and they certainly aren’t delightful. But through solid compliance, heavy marketing, and “good enough” utility, they play their role.

We know this because it’s always been the primary mission for UXDA—defining high-end UX governance, strategy, and design for financial services. We have to deal with the reality that many top financial companies and banks don’t actually need world-class UX design to be successful and outcompete in their markets.

A stodgy but functional interface does the job perfectly. These companies didn’t have to be spectacular to grow. They just needed to be competent enough in digital. Most financial institutions still operate within a model that historically worked:

• incremental and cosmetic UX improvements
• feature-based competition
• benchmark-driven app design
• non-governed experience decisions
• minimally acceptable usability
• legacy-based execution

That was enough, although UX was not institutionalized as a strategic asset. Banks believed that digital did not need to differentiate—it needed to function. But today, as we enter the era of AI, I have to ask: is this still true? Are competence and “standard” product execution still the moats they once were?

That model no longer holds. AI is already widely adopted in financial services, and 92% of financial service companies generate profits from AI, according to KMPG Global Tech Report. Next, AI will kill “good enough” product design as a competitive advantage. Standard UX will soon be delivered by AI in just minutes for every thousand of financial services launched each year.

• Research? Done.
• User flows? Generated.
• Wireframes? Instant.
• UI patterns? Replicated.
• Best practices? Embedded.
• Usability testing? In seconds.

What used to require months by a full UX team can easily be produced in just hours with AI. So what happens? Every organization gains access to the same digital execution layer. Every bank. Every Fintech. Every neobank.

Soon, everyone will have clean UX, logical journeys, industry best practices and “user-friendly” interfaces. The baseline has moved. And when everyone is “good enough,” no one stands out. And here is where the opportunity arises, as McKinsey finds—companies that are leaders of CX (customer experience) double their revenue growth in six years compared to CX laggards.

The Great Flattening: “Good Enough” as a Commodity

So, we are heading toward a “great flattening” of the digital financial landscape. If “good enough” UX design is available at the touch of a button, the entire industry becomes commoditized.

When execution becomes a commodity, competition shifts. Not gradually—structurally. The consequences are predictable:

• Differentiation collapses
• Price sensitivity increases
• Customer switching accelerates
• Acquisition costs rise
• Brand perception weakens
• Digital investments lose leverage

This is not a UX issue. This is a margin and growth problem.

When competition arises and services look similar, the product itself becomes a utility, like electricity or water. And as we know, customers don’t have brand loyalty to their electric company; they just want the cheapest rate and stable delivery.

If your digital experience is similar to your competitors, you are effectively surrendered to a price war and structurally pushed into margin erosion. You are telling the customer, “Our product is identical to the guy next door’s, so please choose us based on a 10% interest rate difference.”

But it’s not identical because product designers lack skill. It’s because the entire industry has converged on “safe” product design. And now AI is accelerating that convergence. We are heading into a world of well-optimized, well usable but completely indistinguishable financial products. So this leads to the next brutal question: If your product is identical to everyone else’s, why should a customer choose yours?

The cost of staying “safe” is margin erosion, price competition, loss of differentiation, increased acquisition cost, structural commoditization, increased churn rate and decreased adoption rate. All of this already creates billions of dollars in losses every year for the majority of financial institutions. In UXDA, we define it as the result of five experience gaps: adoption gap, advantage gap, brand gap, alignment gap and trust gap. According to PWC data, 59% of consumers walk away after several negative experiences.

Why do Generalist UX Agencies Become Useless in Finance?

Can design agencies help with this? Yes, but only under certain conditions. In this new landscape, the standard “generalist UX design agency” is walking into a trap of its own making.

For years, these firms have sold a standardized process: discovery, wireframes, UI kits and handoffs. It was a safe, predictable model. But today, hiring a non-financial and non-strategic generalist UX design agency to provide a generic “good enough” financial solution is essentially paying a premium for a commodity.

If your existing design agency is simply following a well-worn path—using the same standard Fintech design patterns and the same “user-centric” platitudes—they are designing a product that an average designer armed with a well-prompted AI will soon replicate in just an afternoon.

And this is where things get uncomfortable because it starts to raise very practical questions for financial leaders: why hire a generalist UX design agency at all? Why pay for a half-a-year “discovery and design” when the output looks exactly like everyone else’s in the market?

If a financial institution hires a design agency and receives:

• standard user flows
• copy-paste UI components
• generic UX patterns

…then what exactly are you paying for? You can buy a mobile banking UI template for 20 dollars. And then your in-house designer with AI can produce the “good enough” level of output.

The reality is that a generic solution is no longer an asset; it’s a liability. It’s enough to function and serve first traction, but it’s invisible in the highly competitive market. To create a competitive advantage in finance, you don’t need a generalist who can color within the lines. You need financial UX specialists and strategists who are willing to throw the lines away.

Financial institutions need people who will dig into the weird, complex, and human psychology of money—the parts that do not appear in the training data or across trending design sprints—to find the hidden magic that will make a brand magnetic.