CGAP recently completed its seventh Applied Product Innovation (API) project with Bank BTPN in Indonesia. The API projects test the relevance of design thinking and human-centered product innovation in branchless banking for low-income people. The methodology of this and past API projects revolves around using human-centered design principles, including interviewing potential customers and quick prototyping to test concept viability. Ultimately, the goal of these projects is to develop new financial service offerings that are relevant to customers’ lives and as a result have high rates of customer adoption and usage.
The many faces of customers we interviewed in Indonesia during this project. Photo Credit: frog design
BTPN is a commercial bank and relative newcomer to branchless banking, but has been a swiftly developing innovator in financial services for the base of the pyramid in Indonesia for the last five years. The bank reaches nearly two million low-income clients with a range of products, including successful solidarity group lending based Islamic banking principles. Over the past two years, BTPN has crafted its WOW! mobile banking product
, planning to bring service to microentrepreneurs and beyond. As a part of its strategy, BTPN successfully applied for CGAP’s API program aiming to better understand its clients and innovate around the BTPN WOW! offer.
Poster of BTPN’s WOW! mobile banking product, Photo Credit: Leesa Shrader
Through a competitive process, CGAP and BTPN selected a joint team from frog design
Development Advisors to implement the project. frog design is a global innovation consultancy specializing in client-centered design techniques while Dalberg is a strategic advisory firm that works to raise living standards in developing countries and address global challenges. CGAP brought experience and lessons learned from the previous six API projects, as well as its expertise in serving low-income, unbanked populations, to the project. Over the course of the four-month project, insights gathered from field research drove the ideation of 118 innovative concepts, refined to seven concepts for prototyping, two of which were market tested. At the end of the project, the team co-developed five concepts and prototypes to be implemented over the next 18 months, ranging from new products and improved client interfaces to technology-enabled games to build agent capability. BTPN staff also ended the engagement with a demonstrated capacity to implement future human-centered design projects on its own. BTPN called this it’s most successful engagement of the year.
Given the success of this project, some elements of its anatomy might be useful for practitioners looking to incorporate design thinking in their own innovation processes. The design team did a great job of sharing this as they went along, blogging as well as tweeting and posting photos on Instagram using the #InsightsIDN hashtag (many of their insights are captured in tweets here
). The key phases of the project were:
A few critical factors helped to make this project a success:
Commitment and Culture at BTPN – Probably the single biggest factor was the very high level commitment to the project from senior management and decision-makers at BTPN. BTPN is a mid-sized bank with a sole focus on serving low-income clients, which made this project core not only to their mobile banking work, but to the full range of their products and services. Not only did managers devote considerable time to the project, but they also encouraged a number of operational staff to spend significant time with the project team as well. Also, product innovation is part of the DNA at BTPN and they were willing and open to engaging in the less structured process of human centered design and to follow tangents of learning in order to “think outside the box”.
Frog and Dalberg Complementarity – There was a positive and interesting balance of roles and responsibilities between frog and Dalberg that worked well throughout the engagement. Both companies brought distinct and complementary technical value and were committed to learning from each other. The two teams actively worked to build the complementarity and synergies between design and management consulting approaches.
Ability to tackle challenges and overcome them with flexibility – One of the most initial difficult phases of the engagement was the need to understand and clarify BTPN’s priority market segments, which were changing based on a range of factors. Flexibility was needed between the proposal phase and implementation phase, as well as striking a balance between pursuing too many market segments and overly restricting segments and limiting learnings. This back and forth was challenging, but ultimately drove learning.
Client personas as the ‘aha’ moment – The development of the six client personas based on field interviews was the “AHA” moment in the process. Personas are distinct profiles of consumers that exemplify specific behaviors and attitudes around a product. This was brilliantly done by frog and galvanized the full team around focused product development. Investment in making the personas as deep and visual as possible was well founded. The personas clearly showed that many of the most promising client segments (young entrepreneurs) do not consider bank accounts to be relevant or useful. The personas were deep enough to communicate the clear logic behind these decisions, helping the bank to understand the barriers and challenges in a way that lent itself to innovative solutions.
The project did encounter challenges as well. The activity with the lowest level of bank participation was product prototyping, where “outside the box” thinking may well have benefitted from more BTPN inputs. And while the team set high goals around business modeling for the final products, over short engagements modeling requires so many detailed inputs that one should be realistic about the ability of outside consultants to fully achieve this. The ultimate success of the project will be determined over time and will be linked to a number of factors (including Indonesian branchless banking regulation), but we’re confident that this project has played a critical role in deepening client understanding and innovation at BTPN, as demonstrated by the bank’s independent and ongoing work with the concepts.