Hey, it's Will.

Tech companies have built their empires on one promise: make [insert any task] easier. Remove the friction.

One-click checkout. Auto-fill forms. AI that thinks for you. Every pitch deck you see for a new app you promises something about making life "effortless."

I get it to some extent, but sometimes “effort” is the whole point. Tough lessons are the ones that stick and the hard fought wins are the most worth celebrating. Cognitive psychology backs this up: "desirable difficulties" in learning and decision-making lead to better long-term results than frictionless experiences. This applies person to person, but also to society as a whole.

Our average attention span dropped from 12 seconds in 2000 to 8 seconds today which means that information overload costs the global economy approximately $1 trillion annually. When everything is effortless, nothing requires thought. As a result, we’ve reached peak easy and the smartest fintech companies are starting to move back in the opposite direction and adding friction back in, realizing that some contention creates better outcomes for users and ultimately, stronger businesses.

Strategic friction forces engagement, builds competence, and creates investment, so this week we’re tackling the challenge of finding ways to add that back in strategically, deliberately, and profitably.

Welcome to Catalyst—your bi-weekly insights on emerging fintech and Web3 trends, a behind-the-scenes look at some of the top players in the space, and actionable strategies you can implement today. No fluff. No basic takes. Just clear insights on what's actually happening in fintech. 💻

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Will’s Picks

A few things I’ve loved reading this week—

• Robert Bjork on Creating Desirable Difficulties in Learning

• The effect of cognitive load on economic decision-making

• Why Everyone Thinks Human Messages Are Robots Now

• The Psychology Hack That Tripled Our LinkedIn Response Rate

• Designing Friction for a Better UX

The Frictionless Fallacy

Cognitive Load Theory, developed by educational psychologist John Sweller, shows that human working memory has limited capacity. When we eliminate all cognitive effort, we reduce both engagement and comprehension. Students using AI writing tools score lower on comprehension tests than those writing manually. Apps promising "effortless learning" see 89% dropout rates within 30 days.

The pattern repeats in finance. Robert Bjork's research on "desirable difficulties" demonstrates that learning methods requiring more initial effort yield better long-term outcomes. Spacing practice over time works better than cramming. Testing enhances retention more than repeated review. Generation of content surpasses passive consumption.

The business implications are massive. Companies applying strategic friction see higher customer lifetime value, better feature adoption, and reduced churn. The key insight here is that difficulty at the right moments creates competence and investment.

Strategic Friction in Action

The best fintech companies understand this principle and apply it systematically.

Payment Confirmation Steps

PayPal's one-touch feature seems frictionless, but it includes strategic confirmation layers for significant transactions. Two-factor authentication adds steps to the login process but prevents account takeover fraud. Security measures feel like friction but create trust.

Amazon Echo devices originally placed orders instantly when users said "Alexa, order me a dollhouse." No confirmation required. This extreme frictionlessness backfired when a TV news anchor's words triggered mass orders across thousands of devices. Amazon quickly added confirmation requirements for purchases.

The lesson here is pretty obvious; some friction protects users from their own mistakes and builds confidence in the system, but it’s not always that straightforward.

Progressive Complexity

Trading platforms that gamify investing see higher initial engagement but worse long-term outcomes.

Robinhood's frictionless interface attracts new traders but contributes to poor investment decisions. Traditional brokers with complex interfaces and educational requirements produce better investor results.

Effective fintech platforms use progressive complexity; starting simple but requiring users to demonstrate understanding before accessing advanced features. This friction builds competence rather than just conversion.

Educational Friction

Manual expense tracking saves more money than automated solutions. Physical goal-setting produces better outcomes than app-only planning. The cognitive effort required for manual processes forces engagement with the underlying financial concepts.

Smart financial education platforms add "desirable difficulties": spaced practice sessions, generation exercises where users create content, and testing intervals that require active recall. These feel harder but produce lasting learning.

The Strategic Friction Framework

Here's a four-phase approach to implementing strategic friction:

Phase 1: Friction Audit

Map every step in your user journey and categorize friction types:

Operational Friction (Remove): Unnecessary complexity in routine tasks

• Multiple login steps for basic actions

• Redundant data entry across flows

• Poor interface design that confuses users

Educational Friction (Add): Moments that build understanding

• Confirmation steps before major decisions

• Progressive feature unlocking based on competence

• Required learning modules for advanced tools

Security Friction (Preserve): Protection measures that build trust

• Two-factor authentication for sensitive actions

• Transaction limits until identity verification

• Confirmation requirements for high-value transfers

Relationship Friction (Build): Human touchpoints that create connection

• Mandatory consultation for complex products

• Personal onboarding for business accounts

• Human verification for account changes

Assessment Actions:

• Survey users about which friction points provide value vs. frustration

• Benchmark key metrics: conversion rates, feature adoption, user satisfaction

• Identify quick wins and high-impact opportunities

Phase 2: Remove Operational Friction

Eliminate barriers that serve no learning or security purpose:

• Automate routine data entry and calculations

• Streamline repetitive processes with smart defaults

• Design intuitive interfaces that reduce cognitive load

• Remove unnecessary steps from common workflows

Measurement: Test and measure impact on conversion and satisfaction after each change.

Phase 3: Add Strategic Friction

Insert purposeful challenges where they create value:

Educational Friction Tactics:

• Spaced Learning: Break complex concepts into sessions distributed over time

• Progressive Complexity: Require demonstrated competence before unlocking advanced tools

• Generation Tasks: Ask users to summarize understanding in their own words

• Testing Intervals: Include knowledge checks throughout the learning process

Security & Relationship Friction Tactics:

• Implement confirmation steps for high-stakes decisions

• Add progressive security measures based on transaction history

• Create meaningful human touchpoints for complex decisions

• Build educational sessions before advanced feature access

Phase 4: Measure and Optimize

Track both immediate and long-term metrics:

Short-term: Conversion rates, task completion, user satisfaction

Long-term: Feature adoption, customer lifetime value, financial outcomes, user competence

The goal is optimizing for long-term success, not just immediate metrics. Repeat the audit cycle quarterly to refine your approach.

Real-World Applications

For Investment Platforms

Remove: Complex navigation and redundant account setup steps

Add: Educational checkpoints before options trading access, confirmation steps for high-risk investments, spaced learning modules for financial concepts

For Payment Processors

Remove: Unnecessary form fields and slow loading times

Add: Strategic confirmation for large transactions, progressive security measures based on transaction history, educational content about fraud prevention

For Banking Apps

Remove: Redundant security questions and confusing menu structures

Add: Guided financial planning sessions, confirmation steps for account changes, educational content linked to spending patterns

For Lending Platforms

Remove: Excessive documentation requirements for standard loans

Add: Financial literacy assessments before large loans, confirmation steps for terms understanding, ongoing education about debt management

Measuring Success

Track metrics that matter for long-term outcomes:

Engagement Quality

• Time spent learning vs. time spent consuming

• Feature usage depth vs. breadth

• User-generated content and questions

Financial Outcomes

• Customer financial health improvements

• Long-term investment performance

• Debt management success rates

Business Metrics

• Customer lifetime value (should increase)

• Support ticket volume (should decrease as competence builds)

• Referral rates (educated users refer more)

• Churn rates (should decrease as investment increases)

Trust Indicators

• Security incident reports

• User confidence surveys

• Willingness to use advanced features

The Competitive Advantage

While competitors race toward frictionlessness, strategic friction creates differentiation:

Better Educated Users: Customers who understand your platform become power users and advocates.

Higher Trust: Security friction builds confidence in your platform's reliability.

Stronger Relationships: Educational touchpoints create connections that reduce churn.

Premium Positioning: Users associate thoughtful friction with quality and expertise.

Sustainable Growth: Educated, engaged users have higher lifetime value and lower support costs.

Start with one user journey and apply the framework systematically. Measure the impact on both immediate conversion and long-term outcomes before expanding to other areas.