This is the second of a two-part blog series presenting some of the key learnings from CGAP’s Applied Product Innovation program with leading Indonesian Bank BTPN and a collaboration between frog design and Dalberg Development Advisors. Over the course of this engagement, CGAP worked with BTPN to tailor their mobile-enabled BTPN WOW! banking offer for the mass market, with a special focus on the unbanked – a market which encompasses over 100 million people.
The project utilized Human Centered Design (HCD) as its core methodology. HCD is a process centered on learning directly from customers and delivering solutions that work in specific contexts. It involves careful listening and observation of customers in their own environment to understand people’s needs, aspirations and emotions. Rapid prototyping and real-world tests with customers are then used to quickly validate (or invalidate) early designs and iteratively improve the final solution.
One of the most powerful HCD tools used in this project was the “personas”. Personas are distinct profiles of consumers that exemplify specific behavior and attitudes around a product and are used to evoke empathy and inspiration in design. They are developed through direct interaction with individuals through in-depth interviews and are a composite of individuals who have common characteristics or behaviors. While personas can be powerful inspirational tools, in order to be accurate drivers of design, their development needs to be undertaken carefully, based on direct client experience.
On the surface, personas feel like they describe a unique individual. Personas have names and ages, families and friends, incomes and expenses, daily rituals, less frequent behaviors and personal possessions. A persona also has needs, deeply felt and reflecting priorities and ambitions in life, as well as dreams of what life could be and attitudes that impact interactions with people, places, and things. Collectively, all of these characteristics create a vivid personality. The richness of a persona is critical, as it helps inject the voice of the consumer into the innovation process. Developing a persona involves selecting individuals from in-depth conversations in the field structured around key questions drawing both on practical realities and underlying forces such as:
- What is my age, occupation and living situation?
- Do I have access to financial reserves?
- What motivates me?
- Who are my role models?
- Who do I trust?
- What is my mental model of value?
- What do I think a bank is for?
- What enables me?
- What blocks me?
- What do I need?
After field research in six locations across Java and Bali encompassing 72 in-depth client interviews, seven personas and nine key insights were synthesized across strategic mass market segments with BTPN. The personas and insights were reviewed in depth over a two-day ideation workshop and became the drivers for 118 product concepts, ultimately refined to seven product ideas for rapid prototyping and business modeling. One of the personas that resonated with BTPN staff was Budi, a young, up-and-coming entrepreneur, nicknamed “The Elevator”.
Budi, a young entrepreneur, Photo Credit: frog design
Budi’s persona is important to BTPN because he is young (24) and unbanked, with a growing informal microenterprise. Budi lives in Ciherang with his little brother and grew up in a small town an hour away. His parents still live there and he was raised with business all around him. His parents owned a kiosk and he watched his friends start and run kiosks of their own.
All of Budi’s lending, borrowing and saving is informal. He is financially literate. He knows exactly what his inventory carrying costs and profit margins are, but he does not use banks. He is saving about US$1,200 with the family back in his village. Budi or his brother carries the money to them, and he trusts them to keep it safe.
Budi borrowed nearly US$3,500 from friends to start his kiosk. He has also lent US$2,000 to a friend to start his own kiosk. He does not keep any records, everything is in his head, but he knows that will need to change as his business expands.
Budi’s dream is to start another kiosk, which will cost him over US$5,000. He thinks he will need another year of saving before he can do it, as well as to find a good location and employee to run it. He would rather take a year to save up for his dream business or borrow from a friend than work with a bank.
One of the key insights linked to Budi’s and other personas is that for the unbanked, there are mental blocks against being banked. Past experiences with banks cloud people’s interest in trying again: fees, losing access, accounts being closed due to low balance, perceptions of time wasted in procedures and lines. Many low-income people don’t think banks are for them. And people trust people more than institutions.
"For someone like me, having a bank account is not necessary." – Hidayat, Propane deliverer
"I don't like banks because you have to line up, and there's not a lot of interest. Plus, if you give money to a friend, it can be used again. It can help that guy out." – Irfan, kiosk owner
BTPN was able to use the personas and insights, linked to their own experience and existing quantitative data, to refine a range of aspects related to their core WOW! mobile banking offer, from products to interfaces, sales strategies and delivery channels. In the case of Budi, this included structuring a loan product that clearly allows him to reach his business goals more quickly and to use his digitally-enabled savings account to dynamically interact with other businesses in his network. The personas have also helped the bank better understand and target specific segments among the unbanked and mass market clients, helping maintain realistic ideas of users and prospective barriers to uptake throughout the process. Since the engagement with CGAP, frog and Dalberg, BTPN has made important strides to pilot and implement its new strategies. BTPN has also had to further adapt the offer to meet the changing branchless banking regulatory environment in Indonesia. The personas developed for the project were also shared with the regulator in Indonesia to help advance the understanding of client preferences, needs and barriers related to financial inclusion.