NB Financial Health
Who Is the ‘User’ In ‘User-Centred Design’?: When it comes to financial products, don’t discount the role of intermediaries
Editor’s note: As part of our Most Influential Post of 2014 contest, we are re-publishing the articles that attracted the most reads. This article was the most-viewed for June. To see the full list of the most popular posts in 2014 and to vote for your favorite, click here.
In 2000, we had completed two years of what we thought was outstanding work to understand the needs, perspectives and aspirations of the end customers for banks and microfinance institutions. It was time for MicroSave–Africa’s first mid-term review, led by industry gurus Elisabeth Rhyne and Marguerite Robinson … and they gave us a wake-up call.
“The mid-term review of MicroSave-Africa found the project to be outstanding in articulating client perspectives …. MicroSave-Africa’s … excellent market research training course has already given 16 MFIs a new perspective on clients and tools (focus group discussion and participatory rapid appraisal techniques) to learn about client needs more effectively. MicroSave-Africa has not done as well on the supply side, in part because it has underestimated the complexity and scope of the work needed to introduce new products successfully inside MFIs.”
We had developed a series of qualitative research tools and techniques that helped (and continue to help) hundreds of financial institutions develop new and refined products that are used by millions of people in Africa, Asia and Latin America.
But this success could not have been achieved without clearly understanding exactly who uses these products.
The obvious “users” are the end customers of the financial institution or mobile network operator. But as our mid-term review highlighted, there is another very important “user”: the organisation that will deliver the product. MicroSave has provided training and technical assistance on product development and innovation for 15 years now, and we have repeatedly seen two challenges:
When an external agency conducts market research and hands a beautifully constructed product prototype to a financial institution, it has a high chance of becoming a “product orphan” – unloved and rejected by its prospective parents. External agencies rarely can adequately understand the institutional needs, culture and operational realities of the financial institution. So, more often than not, the product prototype is not adequately profitable, or conflicts with other operational realities, or presents insurmountable challenges for the IT systems and so on. External agencies from different countries also often fail to understand the regulatory environment or cultural nuances of the target market – particularly if they insist on arriving with “optimal ignorance”.
Even when the market research is conducted by staff of the financial institution in collaboration with MicroSave (our preferred model) we sometimes see their perspectives shift from being too institution focused to the other end of the spectrum and being too customer focused. In between these two extremes lies the “sweet spot” for products that are market-led but meet the institution’s needs and realities. Institution-focused financial services often ignore the market and end customers’ needs, perspectives and experiences; but over customer-focused products can be too complex, or simply not sufficiently profitable to deliver.
The solution lies in building qualitative market research capacity within institutions so that the tools and techniques can be used not just for product innovation but also for myriad other drivers of customer centric or market-led financial services: customer service, marketing and communications, corporate brand and identity, and so on. And so that the products developed are based on the needs of both the customers and the institution that serves them, as well as an adequate understanding of the regulatory environment.
Indeed, we at MicroSave would argue that the most successful financial institutions (and indeed other corporations) have in-house market research capability. Equity Bank is a very good example of this. We trained six of Equity’s staff on qualitative market research in 2001-02, and this team helped guide the bank from 75,000 customers in 2000 to over 1 million by end 2006. Equity then underwent a massive expansion, and in 2010 came back to MicroSave asking us to train a new cadre for its “Research and Product Development” cell because the original staff that we had trained had either moved up within the organisation or had moved on. This new cadre is now working with us to develop the products for rollout across the bank’s digital finance channels and for its operations in Tanzania, Uganda, Rwanda and South Sudan. Equity Bank now has 8.7 million customers in Kenya alone. They are perfectly positioned to balance the needs and perspectives of the customers and the bank.
The users in “user centred design” are necessarily both the customers and institution that serves them … and not as one fresh-faced consultant announced to colleagues of mine, “the donor who pays my bills”!