In the past three years as CGAP has tried using human-centered design (HCD) to learn from and design better products and services for customers, we have visited fishing villages in Indonesia, talked to traders on the streets of Kumasi, and visited hundreds of agents. We have had coffee at people’s homes, observed religious ceremonies, and talked to local leaders about community planning for weddings.
One of the most powerful things about HCD is that it uncovers people-level insights that have systems-level impact. By having intense conversations with hundreds of low-income people across emerging markets, CGAP developed an understanding of their financial aspirations, fears, and mindsets. These in turn produced thousands of data points which were the first step in a chain of events:
- We distilled the data points into representative patterns;
- The patterns prompted creative brainstorming sessions;
- The brainstorming sessions led to hundreds of concepts for potential financial products and services;
- The concepts resulted in iterative prototypes.
Finally, at the end of this process, we arrived at financial products and services ready to be deployed in the market. These insights about people’s lives and behavior – the “data points”- are central to the design process. We were surprised by how consistent and similar the insights were throughout the 8 markets we worked in. Here are some of the top critical customer insights we learned from across our projects:
- Cash works. It’s all about control. “With cash you can’t spend what you don’t have,” said Sueli in Brazil. Globally, cash is one thing that people understand and trust. It provides limits, and seeing what is left over after spending leads people to make better financial decisions. Cash works seamlessly for daily transactions and people are already used to transacting with it.
- Communities pool resources for financial and emotional support. We hear this consistently; low-income people feel more comfortable investing in their communities and their neighbors, because they know they will have a built-in support system in their own time of need. Most communities already have informal financial services groups, groups that integrate easily into people’s lives and offer functional, financial, emotional, and community support. People know that if they give a gift for a friend’s wedding or funeral, they will eventually be repaid in one form or another.
- People trust people more than they trust organizations. Stories about unfair treatment of customers travel fast, and just one bad experience with a formal financial institution can have a long-lasting negative impact on a person’s financial inclusion. Fear of scams is widespread, and many countries lack a strong recourse system for customers to have their complaints heard. It is easy for an organization to get a bad reputation in a community, and once that happens it can be difficult to reverse negative momentum. Although people are acutely aware of the shortcomings of informal services, like savings groups, they are more tolerant of them.
- Distrust of banks is prevalent. “Banks are only for rich people, “said Murium in Pakistan. For the unbanked, there are huge mental blocks to trusting financial institutions with their money. Across all projects we saw the same recurring perceptions: banks have high fees, are difficult to access, confusing, and ultimately not worth the effort. Even in Pakistan, where many interviewees expressed the belief that banks are secure and honest, they ultimately maintained that banks were “not for me,” and “only for rich people.”
- Poor people are at best uncomfortable, and at worst, fearful of new technology. Mobile financial services require customers to use their phones in ways that they might not understand or that makes them feel uncomfortable. Similarly, ATMs can be a source of anxiety for many customers. In Pakistan, illiterate beneficiaries of the country’s cash transfer program struggled even to input a set of numbers into a phone since in Urdu, numbers and letters are read from right to left, not left to right.
We gathered 10 top-level insights on poor people’s behavior through our HCD work which are all explained in our interactive publication Insights into Action. It has been fascinating to see how the insights above are confirmed by colleagues who specialize in other regions and countries.
A huge benefit of HCD is that it doesn’t end at capturing critical customer insights. Further analysis of these insights yields design principles or opportunity areas—clear, instructive guardrails for what an organization can actually design—that then inform the products and services created. Throughout our research, we were also able to find common design principles that applied to all our projects. These include principles such as: “Design for Trust”, “Talk Like People Talk”, “Build Consistent Support Into the System” and “Offer Limits not Temptations.” These play a central role in ideation sessions where new products and services are brainstormed and generated.
The above insights teach us that digital financial services do not necessarily offer a better value proposition than cash or informal networks. Providers will need to work hard and apply the design principles diligently to create products that create emotional connections with low-income people and that are trusted. Ultimately, the only digital product or service that will be successful will be one that offers a better value proposition to people than cash and that is truly woven into communities’ natural social fabrics.
Listening to customers makes obvious sense. It allows managers to put on their customers’ shoes and forces them to walk in them. It immerses you in a person’s life and shows you the way her mind works. HCD helps financial institutions to achieve the ultimate balancing act—a chance to hit internal business targets while designing products, services and experiences that truly fit their customers’ needs.