Customers

How can financial service providers, such as banks, microfinance institutions, and mobile operators, design and provide products and services that poor customers will not only choose, but actively use? CGAP has learned that a focus on the customer is essential.

To that end, CGAP works to advance customer centricity, a way of designing products and services that begins with understanding the customer. For poor customers, this starts by recognizing their great diversity: While often defined by a single attribute – their poverty level – they are a diverse group of people and require a range of products and services.

This woman participates in a group meeting as part of a cooperative she is a member of.
Photo Credit: Solene Ducretot, 2014 CGAP Photo Contest

Access to financial services is central to financial inclusion, but it is clear that access without use is an incomplete financial inclusion result. People cannot benefit from financial services if they do not use them, and providers cannot generate income from their business activities when there is lack of use. For example, only 30 percent of registered mobile money accounts globally had been used at least once in three months, according to June 2013 data. Inactivity is not only an issue for mobile accounts; five of the largest retail banks in their domestic markets in Colombia, India, Kenya, Mexico and South Africa reported suffering from dormancy rates ranging from 20 to 90 percent in different account categories.

Becoming a customer-centric institution is not easy, and often involves completely shifting the way a financial service provider operates. However, analysts of successful business models across industries agree that customer-centric providers tend to fare better in the long run, as they are better at retaining customer loyalty and identifying and meeting evolving demand. But does this work for low-income customers, where margins are thin? We believe that it does, and that customer-centricity at the base-of-the-pyramid is a critical ingredient for success.

CGAP supports financial service providers in the adoption of the customer-centricity approach through research, resources and partnerships. Working closely with financial service providers, we hope to understand the institutional mechanisms that impede customer centricity, and support providers toward outcomes that benefit customers as well as providers. CGAP studies approaches to obtaining and integrating customer insights, including Human-Centered Design, segmentation and more.

Insights from these efforts will culminate in The Guide to Customer Centricity as a Business Model – a resource for financial service providers on the journey to customer centricity. The Guide will focus on the five pillars of customer centricity: leadership, empowered employees, a customer-centric operating model, customer experience, and value creation. Customer is at the core of these pillars. This combines insights and design of products, channels and other services, to continuously ensure a positive experience for empowered customers. The final focus of the Guide is on understanding and measuring the value for all stakeholders in the financial inclusion process, starting with the customer, the service provider and stakeholders (staff, management, investors), and including the value for society as a whole.

Resources

Contact: Gerhard Coetzee

Publications

27 February 2015
This Brief addresses the key elements of digitizing cash transfers, which can also enable financial inclusion in a way that it leads to account use, not just account opening.
Countries: 
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English (45.53 KB)
16 October 2014
CGAP has conducted eight human-centered design projects in seven countries. The lessons from these projects highlight both the challenges ahead and a possible way forward when it comes to integrating mobile money into the lives of the poor.
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English (12.02 MB)

From Our Blog

19 January 2015
Donors and investors focusing on financial inclusion in the Arab World are determining how to adapt their approaches given the level of crisis in the region. It's a complicated issue, but many organizations have provided resources to aid decisionmaking.
09 January 2015
Grameen Foundation India shares key steps that organizations implementing HCD should incorporate into their projects to optimize chances of success.