June 7

Ignacio Mas

Unlocking Empowerment for Poor Customers: Three Tips for Financial Services Providers

What do we expect financial services to bring to the lives of poor people? I would say: more options on how to manage one´s circumstances and opportunities, and a sense of confidence and control over one´s future. A sense of empowerment, in other words.

While the feeling of empowerment must come from within, there is much that financial institutions can do to nurture it among customers through their services. Based on recent work on customer empowerment that I did with CGAP´s Customers at the Center team, there are three key notions that financial institutions must convey to their customers through their actions and offerings.



The starting point for customers is a sense of being respected. For the provider, that means accepting customers for who they are, without passing judgment about how they live their lives, the choices they make, or the outcomes they have experienced. The poor, by definition, don´t have many successes to show, so it is easy for financial institutions to rationalize their poorer customers´ predicament in terms of their principles, behaviors, attitudes and decision-making patterns. Imagine if banks could take to heart Pixar´s first rule of storytelling: “You admire a character [customers] for trying more than for their successes.”

For a financial institution, gaining respect for poorer customers often entails shedding prejudices which usually arise as extensions of one´s own attitudes and experiences. Front-line staff members need to acquire empathy for the customers they deal with. This means approaching their customers´ issues with an open mind, striving to grasp the broader context of customers´ work and life experiences, and always seeking to understand not only what their customers do but also why they make the decisions and choices that they do.

Product development teams need to build on what their customers are already thinking and doing, rather than setting out to radically change their mental models and behaviors around money management. Let customers decide what works best for them; the best a financial institution can do is to offer their customers better tools to achieve what they desire, in the way they are comfortable with.

Demonstrating respect for your customers is the starting point in the sense that it earns the provider the right to engage customers in conversation and to offer them tools and products they ought to consider. It´s hard for customers to be receptive to suggestions and offers if they fear they will be made to feel ill understood, adversely judged, or outright unwanted when engaging with providers.


Mutual benefit

Beyond respect, providers need to demonstrate that they are keen to build a mutually beneficial relationship with their customers. Relationships are meaningful when they feel like its a two-way street in terms of the nature of the conversation, the benefits that emanate from the relationship, and the responsibilities for maintaining it.

Customers need to have a voice in the conversation with their providers, otherwise they cannot have any expectation that the relationship is going to meet their needs and address their concerns over time. To that end, providers need to create mechanisms to solicit and capture customer feedback and, crucially, they need to build a track record of acting on it constructively. Providers need to avoid imposing their own language —everything from processes to product names to marketing catch-phrases— which all too often they expect customers to use whenever they transact.

Customers also need to be made to feel that the provider sees the relationship as a win-win, valuing them not only out of a sense of social concern but also as a matter of joint economic success. When Equity Bank rose, phoenix-like, from a in Kenya, arguably the strongest factor behind the huge brand affinity it managed to build was the sense that the success of each and every customer (which, significantly, they call members) was essential for the success of the bank. Customers who believe that their personal success is intimately linked with that of their banks are likely to be more trusting of the bank´s offers, as well as more lenient and understanding when something goes wrong.

Providers should not at all shy away from making asks of their customers, as long as those are properly explained and incorporate some customer input. Shared responsibilities increase the sense of commitment to the relationship. Sometimes providers seek to attract customers by lowering customer asks —through free trials with instant cancellation or a money-back guarantee— and those often result in very shallow customer relationships.

New opportunities

Building customer relationships on mutual benefit and shared responsibility is the best way of expressing a sense of journey to the customer. But the purpose of the journey must transcend a beautiful relationship. There must be concrete ways in which the relationship with a sympathetic provider helps customers dream of and achieve things they couldn´t do before. Ultimately, customers´ sense of empowerment will come because they are able to avail themselves of new opportunities, and to build connections with other people, entities or businesses that suit their purposes. The financial relationship ought to feel to customers like an opening up to a world beyond the one they have known and lived within.

This sense of opening up new opportunities ought to be embedded within financial institutions´ product range. By offering better money management tools, they should make households feel like they are more likely to achieve some future purchase goals that will make their lives more comfortable. By offering efficient digital payments, they should make businessmen feel that they can procure better products from a wider range of suppliers, and sell to customers that are further afield. By offering appropriate credit products, they should make entrepreneurs feel that they have more capacity to invest in and grow their businesses. By offering insurance products, they should make customers feel comfortable redirecting personal savings towards investment activities rather than seeing them as passive rainy-day funds.

Customers’ empowerment may be nurtured by the provider, but it must result in some outcomes that improve their situation for it to be sustained. This then creates a reinforcing feedback loop: This perception of improvement and growth increases providers´ respect for their customers, while boosting customers’ sense of mutual benefit.


Photo credit: luscofusco, via Flickr. Carousel photo: Matt Blaze, via Flickr.

Ignacio Mas is Executive Director at the Digital Frontiers Institute.


financial inclusion, product design