BNI Mobile Mutual Fund

BNI Mobile Banking has become an essential tool for its customers, offering various features, including the ability to invest in mutual funds. To help users make more informed decisions when selecting mutual funds, I've proposed a new metric: the Volatility measure, calculated using the Ulcer Index.

PROBLEM

Purchasing First Mutual Fund

Investing in mutual funds is intended to be straightforward, yet it remains daunting for some. This issue was highlighted during our testing phase, where time constraints limited us to the simplest testing method: think aloud.

• Ms. E:

  • 21 years old

  • Experienced investor

  • Invests in mutual fund, stocks, crypto, timed deposit.

• Mrs. S:

  • 55 years old

  • Not an investor

  • Saves primarily in digital banking

These two participants represent extremes: a beginner and a savvy investor, tasked with choosing their first mutual fund to buy.

While performing the task and thinking aloud, various issues were uncovered. However, I will focus on two specific screens: product list and product detail.

HOW MIGHT WE

Help Users Compare Risk vs Return

Participant E, the experienced investor, suggested adding a visual chart to provide a quick glimpse of performance. This is a relatively simple issue to address, as volatile investments often display charts.

On the other hand, Participant S raised a crucial question: "Can my capital suffer significant losses?" The straightforward answer is yes, but how much? The other respondent noted that a 10% loss in Bitcoin felt less painful than a 10% loss in stocks.

This brought to mind the Ulcer Index. A formula I learned about during the COVID era.

According to Peter G. Martin, the inventor of the Ulcer Index:
“Ulcer Index measures the depth and duration of percentage drawdowns in price from earlier highs. The greater a drawdown in value, and the longer it takes to recover to earlier highs, the higher the UI. Technically, it is the square root of the mean of the squared percentage drawdowns in value. The squaring effect penalizes large drawdowns proportionately more than small drawdowns.”

SOLUTION

Volatility Score: An Easy Metric for Risk

By providing a volatility score, users can gain a more comprehensive view when comparing mutual funds.

Understanding this "volatility" concept might be new to users, so we could include a help button to guide them. I've explained this in layman's terms in a bottom sheet.

It's 15 minutes to midnight, so I need to hurry and finish this challenge.
Looking forward to our chat in the interview session tomorrow.

Cheers! ✌🏻