This Primer is based on research undertaken to determine whether customer centricity could be an approach for FSPs to tackle the urgent customer and company value creation challenges they face. CGAP interviewed customer-centricity experts globally and leading companies across industries, from start-ups that embraced customer centricity from their inception to companies that have embarked on a multi-year transformation to become customer centric.
Based on our research, the adoption of a comprehensive customer-centric approach provides significant opportunity for FSPs to accelerate and sustain their financial and social value creation objectives. The customer-centric approach and the trust-based relationships that emerge support customer retention, customer loyalty, and an increase in customer spending and use. The goal to increase share of customer wallets is particularly relevant for FSPs that aspire to provide customers with a value proposition that incorporates a suite of financial services to manage wealth and risk and achieve life goals supported by full financial inclusion.
Industry achievements around customer-focused research, generating and applying customer insights, and adopting human-centered design (HCD) principles to fix customer problems and innovate customer solutions, support the differentiated customer experiences at the heart of customer-centric business models. Advances in digital technology support the customer experience by enabling customers to access financial services through a variety of channels (mobile phones, agents, internet, branches) at their convenience. Critically, information and communication technologies (ICTs) and digital channels can increase FSPs’ ability to discover new customers and decrease their cost to serve customers, while providing customers with more convenient and robust value propositions.
While these advances may lead to affordable, superior customer experiences for under and unserved market segments, delivering the customer experience and realizing its benefits requires the systematic development of institutional capabilities. Importantly, providers have a significant opportunity to use customer centricity to compete in a rapidly evolving and increasingly crowded market place.
This Primer presents the story of customer centricity to readers, including organization heads, middle managers, and company employees, who by definition play a critical role in a company’s ability to be customer centric and realize its benefits. Drawing from our research, this Primer highlights how companies are implementing customer centricity. While the fundamental principles of customer centricity are widely applicable across industries, this Primer also draws attention to the drivers of customer centricity in the financial services industry, highlighting issues that may have particular relevance for financial inclusion service providers. The Primer concludes with practical guidance on how to catalyze the customer-centric transformation in an organization based on interviews with those who have embarked on the customer-centric journey.