Tuesday, February 10, 2015

Consumer Finance Research: Global Approaches and Methods (Part 2)

By Erin Taylor and Gawain Lynch

Consumers, users, clients, subjects:
Towards people-centric collaborations

Photo by John Guano
People working in consumer finance who want to share perspectives across different sectors and disciplines face a communication problem: finding a shared language to talk about people and trying to understand their lives. The bad news is that “thought silos” persist and block possibilities for valuable collaborations. The good news is that a great deal of collaborative work is already underway that demonstrates the value of getting past the silos. 

A major obstacle to knowledge sharing is that the language that different sectors of consumer finance use lends the impression that we are trying to achieve different ends. Commercial businesses, such as banks, tend to refer to people as “consumers.” Governments have “citizens.” Product developers and designers more commonly refer to people as “users.” Microfinance has “clients,” and academic researchers usually have “subjects” or perhaps “participants.”

Of course, it makes sense that we use different terms to refer to the people we work with, because we do have specific aims and goals. Selling someone a credit product is clearly not the same thing as running a financial literacy project; launching a mobile money service seems miles away from running a lab experiment on, say, risk-taking behavior.

However, our language differences obscure the fact that we are often trying to answer the same basic question: what drives people to make financial decisions for themselves and their households?

The last few decades has seen a trend that illuminates just how much the different sectors of consumer finance have in common. This is the much-touted shift towards what's known as “client-centricity” or “human-centered design.” Often attributed to Peter Drucker’s work in the 1930s, the aim of this shift is to flip our focus: for example, an NGO may cease to ask “How can we integrate people into our programs?” and instead ask “What are the things that people actually need?” The goal of researchers operating within this framework is to first try to understand the context in which people live and operate, and only then ask what might be lacking.

This isn't just a more humanistic approach. Nor is it just a useful approach to designing better products and services. It also provides a platform for collaborations. Putting people’s understandings of their needs at the center means that we are starting from a common vantage point, making it easier to conceptualize shared projects. And focusing on the problem we are trying to solve, whether it is conceptual, policy, or end user oriented, can help to offset the siloing effects of professional or academic-specific language and framing upon which many projects depend. 

Consider the following example. IMTFI researchers Ndunge Kiiti and Jane Mutinda worked in rural eastern Kenya to investigate the use and impact of mobile money services among twenty-one women’s groups. Their project was part research, part intervention, and part policy work. They needed to respond to the interests of their research participants and the stakeholders who served them as well as collect their own research data. Kiiti and Mutinda invited representatives from each of the twenty-one women’s groups to attend a workshop that included collective discussions, presentations by some of the groups, and discussions with service providers and policy makers. This expanded format also permitted the researchers to share their preliminary findings, gave service providers and policy makers an opportunity to respond to the women’s concerns, and provided an occasion for the women to network. By bringing the women to the front and center of the project, Kiiti and Mutinda were able to unite the concerns of the women, mobile money providers, NGOs, and their own academic work.

Making customer-centricity happen isn’t always easy. CGAP are currently working on a project that explores what it takes to get businesses to shift their focus to customers. When they began collaborating with Janalakshmi Financial Services, one of India’s largest urban microfinance institutions, CGAP discovered that “all its products and processes are set up from the organization’s point of view and not the customers.” CGAP then began to look closely at both the lives of microfinance customers and the organizational culture of Janalakshmi Financial Services. In a workshop aimed at “wearing the customer’s shoes,” staff members were tasked with thinking through whether their products really matched up with their customers’ needs. The final output of the collaboration will be a household map that helps staff profile customers along a far more nuanced range of dimensions, in order to make recommendations for products and services that will better meet their customers’ needs. By focusing on people’s needs and experiences--a concern all three groups had in common--the microfinance agency, their customers, and CGAP were able to identify points of mutual value.

These examples show that knowing how people assess a product’s features is not enough: we also need to find out what those products mean to them emotionally and socially, and how they will be incorporated into the individual's everyday life and social networks. This was precisely what IMTFI researchers Onyima Jude Kenechi and Onugu Charles Uchenna looked at in Nigeria. They investigated how women chose between mobile money and traditional financial services. Many of their respondents reported that they might sign up for mobile money if someone they respected, such as a leader in their church, recommended it to them. This reflects not just the trust people place in their churches, but also the fact that church ministers have often provided loans, acted as guarantors, or offered financial advice. A product's usability may not guarantee its uptake if the social impetus is not there. Conversely, product uptake is not possible without companies to develop the products in the first place. People-centric collaborations therefore matter.

Collaborating across sectors isn’t just something that we should do. It is already happening. Global changes in consumer finance, such as the growth of alternative service providers and an increased focus on the under-served, are making collaborations a matter of necessity. Mobile money operators find that they must team with NGOs to achieve “scale”. Commercial businesses must work with regulators, who have a heightened interest in consumer protection issues since the global financial crisis. And academic disciplines, which have been becoming increasingly specialized over the years, are now finding that new discoveries are increasingly made at the intersections of disciplinary boundaries. As these collaborations become more common and more urgent people-centricity is becoming a necessity rather than simply a fashionable trend.

This post is part of the IMTFI project Consumer Finance Research: Global Approaches and Methods, which seeks ways to build cross-sector and multidisciplinary collaborations in consumer finance. Read Erin's previous post Call to Action.

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