CGAP launches Guide for financial service providers to better meet the needs of low-income customers
CGAP has launched the Customer-Centric Guide, a web-based collection of toolkits and experiments to help financial service providers deliver products and services that better meet the needs of low-income customers.
The number of people with a financial account grew by 721 million between 2011 and 2014, reducing the ranks of the unbanked by 20 per cent to two billion. While the number of people with formal financial accounts is growing worldwide, many poor people seldom use them, suggesting they find the accounts have little value. According to the World Bank’s Global Findex report, in developing countries about 20 per cent of adults left their accounts unused for at least a year. For banks, mobile money services and other financial providers, this represents a lost business opportunity after spending an estimated $13.3 billion to open these accounts. For poor customers, it limits their opportunities to build financial resilience, make choices and improve their lives.
The CGAP Customer-Centric Guide is designed to help bridge this gap between financial access and usage.
“In a world where low-income customers make little use of financial services, providing value is the missing part of the puzzle,” said Gerhard Coetzee, Lead Financial Sector Specialist at CGAP.
Customer centricity is not a new business concept, but learning how to better understand poor people and offer the financial products and services they want and will use is a crucial way to extend business value and support financial inclusion. Coetzee said, “Every interaction a customer has with your organisation, products or services, in person or online, is an important part of a customer experience. When an offering is intuitive, speaks to customers’ needs and is easy to use, value increases. Customers who are poor and often marginalised will feel empowered, and it helps them to move towards economic freedom.”
CGAP has begun testing various tools and approaches outlined in the Guide with over 15 partners in Africa and Asia, increasing its potential to help low-income customers. Among them is Zoona, a financial technology startup that offers mobile-based money transfer, payments and accounts in southern Africa. One of its largest branches is in Zambia, where Zoona has credited CGAP’s customer segmentation exercises for helping it recognise that agents are an important customer base and part of improving the overall customer interaction and experience. In the Philippines, with CGAP’s help CARD Pioneer Microinsurance Inc. has adopted a customer journey mapping process to better understand their low-income customers.
Greta Bull, CGAP CEO said, “CGAP works with its partners to generate insights that are actionable, can be practised, refined, improved and embedded in the institution. It is about creating a feedback loop and understanding what the barriers are to using a service for poor people. It is about being aware of what is driving that and how you overcome those barriers so that as a business you can add value to your firm and to your customers.”
The CGAP Customer-Centric Guide provides a wealth of knowledge, practical resources and real-life case studies on ways businesses can improve the customer experience, better serve low-income customers, and at the same time improve their business performance. Its four main sections are:
- Why Go Customer-Centric: Put customers at the centre and move your organisation toward long-term competitive advantage.
- Learn from Customers: Learn how to understand your customers' behaviours, needs and wants and generate the insights you need to start delivering the right solutions.
- Design Solutions: Build products and services with customers in mind. Once you draw insights from your customers, you can design for better adoption and use.
- organise for Delivery: When customer insights drive strategy, products and experiences, your organisation can be fully customer-centric.