Key Takeaways
As we look forward to next year’s Symposium, we took stock of the big themes emerging from this year’s keynotes, panels, debates and workshops. Some of the key takeaways include:
As we look forward to next year’s Symposium, we took stock of the big themes emerging from this year’s keynotes, panels, debates and workshops. Some of the key takeaways include:
1. We need to know more about clients’ lives, their goals, and their needs to design better products and services. Poor households continue to improvise creative, but imperfect, solutions to their financial needs, such as borrowing from family and friends. We also know that village-based savings groups often satisfy basic needs for savings and credit. While these solutions work at a subsistence level, their exclusion from the formal system makes them more susceptible to risk. Service providers need to develop client-centric products at the intersection of what is 1) desirable for people, 2) viable for business, and 3) feasible from a technological and regulatory point of view. This means understanding what clients care about (e.g. simplicity in messaging, trust, convenience, affordability), while also remembering that customers and the business environment are constantly changing.
Strive Masiyiwa of Econet Wireless explained that understanding client needs and building trust was essential to how his company’s mobile and financial inclusion products and services adapted to reach poor clients weathering the turmoil in post-conflict Burundi and Zimbabwe’s inflation crisis.
“When people are seeing the value of cash disappear overnight… trust in any form of institutions is hard to come by.” – Strive Masiyiwa.
Working to build that trust requires doing much more than simply rolling out a new service or product. Leslie Witt of IDEO, for example, advised that the sector look deeper into the behaviours of clients and design experiences that can provide a tangible sense of delight while exceeding their expectations.
Part of this work will involve grappling with an explosion of information. Symposium attendees heard about opportunities for using both new and static data sources, including data held by telecommunications firms, utilities companies, information from wholesalers, government data sets, publicly-available financial inclusion benchmarks, such as those provided by Finscope and The MIX Market, as well as the information financial institutions already have about their existing clients. Where possible, building in-house research capacity, although expensive, is crucial to continuously gaining client insights. Since the data mostly already exists, the challenge is how best to organize and use it, making it more easily accessible for data analytics. Sorting through these sources requires “a clear sense of the business problem you are trying to solve,” noted Daryl Collins of Bankable Frontier Associates.
The Symposium series hopes to inspire practitioners to explore the needs of population segments underserved and not well understood by the financial inclusion sector. We need to explore how to better assess the impact of providing financial services to groups such as smallholder farmers, young people and the chronically poor. It is important to dig deeper to uncover and synthesize research and testimonies from the people served.
2. Leadership is key to reorganizing an organization toward client-centricity. Attendees eagerly examined the practical implications of “daring to trust clients,” looking at everything from leadership to business processes and change management. Leon Lourens of PEP, Africa’s largest retailing brand, shared his company’s experience in making it a mission to serve low-income clients with goods and services. In the early 1990s, PEP met a business downturn by reorganizing its business—from its negotiations with suppliers, to its front-end customer service—with the explicit purpose of making its clientele and its employees feel empowered based on their core values of dignity, respect, and growth. The company eliminated formal job titles and encouraged all staff to adopt simple rituals of respect. For example, every PEP employee can give anyone else, no matter how senior, a friendly high-five. The lesson learned was that employees—how they are trained, treated, and encouraged—play a critical role in achieving client-centricity.
Mark Flaming of MicroCred Group noted that client centricity means embracing new business approaches while acknowledging how it can be difficult for organizations to implement change where priorities are often in competition.Michael J. McCord of the MicroInsurance Centre and Lorenzo Chan of Pioneer Life also shared a success story in adopting a customer-centric approach. They expanded their customer base among poor clients in the Philippines despite the higher cost of insurance following Typhoon Haiyan in 2013 and clients understood the value of that service.
We know that the industry needs to hear more of these stories in order to build the necessary systems and workplace culture to deliver on the promise of client centricity. Over the course of this year, we will gather more examples from the field, to show how client-centric practices are both improving the lives of clients and the bottom lines of the institutions that serve them.
3. We need new business models that better serve those living in poverty. Mobile Network Operators, commercial banks, traditional microfinance organizations, and other new entrants are bringing different capabilities and strengths when it comes to serving the poor. Greta Bull of the International Finance Corporation noted that “this is an industry in need of disruption.” While Safaricom and M-Pesa have provided insight into the possibilities of mobile money, she said, they don’t offer a template that is replicable across all markets. To achieve the real dream of financial inclusion, new models and partnerships will need to be established. In this continually evolving ecosystem, there is a role for MFIs and other players. Mobile money is a platform on which people can deliver financial services.
We also need to know more about who is bringing what to the table, and what trade-offs are involved. Kamal Quadir of bKash, a Bangladesh-based mobile financial service provider, reflected on his company’s explosive growth among the poor. “Customers are ready to adopt new tools,” Mr. Quadir said. “But, is access to these types of services true financial inclusion?” Proper product design is key to reaching a certain market segment, but we need to be conscious of the unintended consequences products may have on people’s lives. Quadir noted that bKash worked “too well”; one customer had complained that, because of the mobile money service, her family did not travel to see her in the village as often as before. The sector is only in the early days of comprehending the impact of new technology on people’s lives.
Stephen Peachey of the World Savings and Retail Banking Institute (WSBI) noted that “our competition is not other banks. Our competition is informal, in cash … we have to look at the way people handle cash, move it around. Seventy percent of the money in a Kenyan village moves within a kilometer … you can’t move that on mobile money.” He also focused on the mutual benefits of financial inclusion to institutions and to the poor and urged attendees to appreciate the economic potential of working with them. He noted that “the amount that many poor people save in various mechanisms could help many financial institutions double their balance sheet,” while allowing the poor to earn interest on their savings for the first time, and so creating real benefits to households.
This potential should serve as a catalyst for new and existing players to work together. The Symposium series will continue to generate new knowledge about the state of the industry, best practices and issues to consider as these new models come to market.
