Getting Better Insights To Design Better Financial Products
Do these look familiar to you?
c = 2.997 x 108m / s
6CO2+ 6H2O + C6H12O6+ 6O2
If you got through high school physics and biology without falling asleep, the answer is probably yes. Now, without searching for these on Google, do you know what these equations stand for? For some who are science geeks, you probably figured out a couple of these… but for the rest of us, these equations are at most vaguely familiar. Similarly, concepts like compound interest rate and insurance premiums are very familiar to those of us in the financial world but seem like a different language to most of our customers. Communicating an offering or product in a ‘foreign’ language is counterproductive. It’s important for providers to know that communication is a key piece of an offering and that speaking people speak instead of finance speak is essential when talking to our customers.Photo Credit: Wim Opmeer
This is just of one of many lessons we learned from our three Applied Product Innovation (API) projects which have taken place over the past 18 months in Brazil, Mexico and Uganda. Today, CGAP is releasing a synthesis deck which highlights our experiences in product innovation and helps providers understand how they can use customer-centric approaches to improve their offerings.
We all know that most branchless banking services struggle with low activity rates. 172 branchless banking implementations have been launched since 2007, but CGAP estimates that less than 20 of those have reached 200,000 active users. Providers are tackling this in a number of ways, like launching huge promotions and raising agent commissions. Ultimately potential customers need to believe that product offerings meet their unique needs and this just doesn’t seem to be happening in most places. Despite thousands of surveys, most providers struggle to understand what their low-income and under banked customers need and how they should articulate the value proposition.
Our work in API aims to understand how customer-centric design methodologies (inspired by the human-centered design approach) can be tailored to branchless banking in order to achieve better financial service offerings for the poor. We know that understanding customers and translating customer insights into products has worked in a variety of other industries such as consumer goods and technology. In financial services, there are some examples of companies that applied customer insights to create new products with a focus on the user experience, a rapid feedback loop, and appropriate pricing. Could this approach help branchless banking providers better understand customers and how to design products that would actively be used by them?
We carried out our three API projects with a variety of partners including large-scale commercial banks and MNOs along with expert and specialized design firms. We distilled a huge amount of lessons and tools from these projects (take a look at our deck for more info). Here are some of the key messages for providers:
- Thinking like a designer gives you a new lens with which to look at your customers and product offerings.
- Connect with your customers! Don’t outsource this critical task to your marketing team or an external firm. Talk to your clients. Ask them questions about your product, but also ask them about their lives. Observe their surroundings and home. This will give you huge insights on who you are serving which will improve your offerings. There are a number of fun and useful tools to facilitate conversations on tricky subjects like finances with your clients (for more information, go here)
- Sometimes talking to a dozen people for a couple of hours can give you more insights than talking to thousands of people for 10 minutes. You can draw patterns from these conversations and you can encourage creativity internally to come up with new ideas to better serve your customers. (For more information, go here)
- Prototyping can be simple and inexpensive and allows you to quickly test product concepts with customers and reject or amend these concepts as needed. In fact, prototypes can be as simple as a storyboard or a cell phone screen print-out explaining a simple concept. Going out and talking to clients about these ideas can be easy, inexpensive, fun and enlightening. (For more information, go here)
- It is ultimately not all about a killer product. The entire user experience must reflect customers’ needs and desires and is just as important as the product itself. Things like marketing messages, the user interface and even basic network uptime are as essential to implement well, as much as a great product. Without the right ecosystem in place, even the most innovative of products can fail.
- Hiring a design firm is ideal as you’ll get experienced people who have gone through the process of customer insights to product design hundreds of times. However, there are a number of design elements that providers can try and use on their own.
There is no ‘right’ equation to arrive at a well-designed product. But ensuring customers feel comfortable during conversations about financial services, listening to their needs and wants, communicating in people speak, encouraging innovative ideas and frequently testing concepts and seeking feedback from customers are certainly key components. The crucial ingredient: remembering that customers are always at the center.
Claudia and Yanina will be taking your questions on the design process in a live web chat with Patrice Martin of IDEO.org on 18 April. Send us your questions and comments.
P.S. For those who are still wondering: the first equation is the speed of light, the second the force of gravity and the third the chemical process for photosynthesis.
---- The authors work on applied product innovation in the Technology and Business Model Innovation Team at CGAP.