Over the past 18 months, CGAP has worked in three countries with a variety of partners to generate demand-side insights and design innovative products that work better for low-income households. Families at the base of the economic pyramid are typically excluded from the formal financial system and therefore must resort to informal ways of managing their money – for example, local moneylenders and rotating savings clubs (ROSCAs) –which can be expensive and unreliable.
To obtain these insights, we used what has come to be known as “human-centered design,” which requires you to genuinely engage with customers and understand their lives and needs. The design work has resulted in some creative ideas for promising products described elsewhere, but equally importantly, it has documented the process of systematically talking with customers.
For human-centered product design projects to be successful, they have to bring together experts from a variety of fields. These projects combine the work of technical researchers with creative designers and savvy business analysts to create products that can actually work commercially. Teams work in war room-like settings that are home to sticky note-covered walls and rapidly built prototypes that result from rejection-free brainstorm sessions. Everything is interactive, and early and frequent feedback from potential customers is essential.
We wanted more CGAP staff and partners to benefit from the project team’s discovery process and experience the essence of the human-centered design approach firsthand. Our design firm partners from IDEO.org were game to distill the entire design process sequence from learning to ideation to prototyping into highly stylized modules and guide us through a fast-forward exercise.
Photo Credit: Jake-Anthony Pauig, Rapid proto-typing I: Rafe Mazer and Djibril Mbengue demonstrating an "adjustable-height kitchen cabinet."
They had us design functional, appealing, and cost-effective homes for wounded war veterans. Recorded video interviews with veteran families substituted for the original client engagement phase. In our first team debrief on foundational client insights, our more technically-minded colleagues zeroed in on the challenges of having to move in a wheelchair. Colleagues with high emotional intelligence quotients heard the wounded veterans’ emotional need to live as normal a life as possible. Listening and engaging in the debrief, I rediscovered something I intellectually always knew: how narrow my own initial perceptions were, and how many obvious cues I had missed because of the way my antennae are configured.
Photo Credit: Jake-Anthony Pauig. Shweta Banerjee and Tim Lyman talking about their mock up of "innovative shower design."
We then went through concept ideation with a real discipline around not rejecting anything out of hand, celebrating out-of-left-field ideas, and building on each other’s kernels of insight. The rapid prototyping using every prop the conference facility had to offer came up and acted out highly plausible initial concepts, such as the open-space, height-adjustable cabinet kitchen or the roll-in/roll-out bathroom shower. Staff loved the exercise. "Ideo forced us to think outside our comfort zone. It was eye opening and inspiring to watch us lowly financial inclusion experts try to design homes for veterans,” says CGAP’s Kabir Kumar who co-organized the session. “At one point, you could witness our normally sober Middle East regulatory expert passionately defend this all-purpose kitchen island he envisioned for the model home."
Using real customer insight to develop better products and services is certainly nothing ground-breaking. But, it’s a discipline that is often overlooked by generalist executives who miss out on evidence-based expertise. Perhaps it’s too often that compelling anecdotes and “gut feelings” are what drive action in the development field rather than evidence-based insights. After all, impact investors start out focused on worthy causes - such as education or health – with a desire to make a difference. But this means that the starting point are supply-side considerations, rather than demand-side insights.
Half of all working-age adults globally lack access to formal financial services. And contrary to popular belief, these people are often entrepreneurs in the informal economy -- by necessity, not by choice. Unbanked people don’t live financially simple lives; they have a strong need for income-generating opportunities, the ability to build assets, and tools to mitigate risks and smooth consumption in the face of emergency. By listening to what these people really need, we can dramatically fast-track innovation in financial services to reach more people with a greater range of products at affordable prices to help them improve their lives.
---- The author is the CEO of CGAP.
Dear Tilman Ehrbeck
Thanks for the posting on the subject. As a strong advocate for demand side perspectives for MF and inclusive finance , the posting is very much refreshing although the fact has been appreciated belatedly.
I have also made comments related to the subject in earlier postings in this subject in this blog. However, while discussing on human centered design, I feel what matters most is the prudent identitifiaction of human beings to be served or included financially in the given pyramid since wide diversity in the capability profile of bottom , distinguishably persists among the continents/regions in the globe from multidisciplinary perspectives . Contextually, “ Uniformity or one size fits for all ‘ in the tool kit beg the question. It is therefore following two suggested points merit the attention in the discussion on human centered design for the bottom pyramid.
1. Based on over all development and growth status , broadly two geographical entity may be thought of for the said purposes. One part may include Western and European countries where poverty is reflected more in terms of economic criteria with monetary considerations like low income people or low income earners in $ dollar terms representing micro, small and medium business/trade entrepreneurs or like income generating activities . Here demand is additional capital for scaling up above poverty line. In this part of globe, the poverty triangle is occupied by almost economically deprived people wanting access more finance whatever mode. This hypothesis also assumes that these pyramid human beings are fairly protected for their livelihood against any vulnerabilities consequence to the economic growth and development of their economy in these respective countries. Given the level of infrastructure development perhaps human need based micro credit product and financial inclusion either branch or branch less mode would work.
Where as in case of second part covering the rest of the countries (Asia & Africa ) poverty is multifaceted and vulnerability and deprivation remain formidable challenge and that too in varying degree even among the human being in the pyramid with bottom at the one end of spectrum. This situation calls for different segmentation in the pyramid according to extent of vulnerability and deprivation or marginalization for prudential designing human centered multiple products and sequenced services. To wit, unlike their counter parts in part one region, contextually human centered product design demands micro credit plus services integrated with social safety nets Then only financial inclusion and Microfinance will work responsibly to effect desirable outcome.
2. Working out of appropriate framework for understanding the demand dynamics and for making human centered design distinguishably each for the above geographical regions, different kinds of expertise are required. While former region requires more ethnographers , latter demands for socio anthropologist and indigenous MF experts for both planning and designing and result based M&E within the comfort zone of the target human beings.
In fine qualitative human centered design calls for a new framework with more demand side orientation. In this regard attention CGAP and their experts is drawn to my just released book Microfinance Principles and Approaches – Ten commandments for responsible financing to the poor” which suggests prudential methodology for grass root MF planning and designing with illustrations for the said task. The access platform for the book is given below Hope this may be useful
Notion Press Store: http://notionpress.com/store/index.php?route=product/product&filter_nam…
Thank you for sharing my views
I am really excited this approach in the financial services industry.I really do believe that this is be best way to build great products, by understanding the pain points of the people out there. Congrats on your efforts!