> Posted by Sonja Kelly

Let’s say you have a checking account with First Imaginary Bank. One day First Imaginary Bank wants product feedback because they are thinking of extending their product line. They might ask you to answer this question:

How do you feel about your checking account?

a)     It’s great! I really like it.

b)    It’s sufficient for what I use it for.

c)     It’s sufficient, but I think I could find something better.

d)    It’s awful, and I am planning on closing it as soon as possible.

The biggest problem with this kind of market research is that it only gathers information about the status quo, and only for one product. It does well by talking to the consumer, but it is so narrowly focused that we only find out about the preferences surrounding a particular checking account. It’s useful but only as far as the checking account is concerned. It gives First Imaginary Bank very little information about future products.

First Imaginary Bank might try another method, this time looking at the checking accounts that other banks offer. “Ah!” they might say, “Clearly there is a high demand for checking accounts that come with a pony, because a lot of people are using that account from Second Imaginary Bank.” But unless First Imaginary Bank is going to try to get all of its clients from people who already have the pony accounts, it needs to get information about the people not using those accounts.

That’s the problem with our pre-Global Findex world. We had a lot of supply-side data and a lot of product and institution-specific data, but very little demand-side data. This limitation had a felt effect on the way we proposed policy, developed products, and analyzed the financial inclusion space.

No more.

The Global Findex leaves us with no excuses to continue to do market research like we were doing it before. This new data give us a very important reality check.

For example, we used to think that proximity to a bank was the main reason that someone wouldn’t open an account. But now, we know that the biggest barrier to not having a bank account is not actually having the resources to open one.

We used to make a rhetorical distinction between the “banked” and the “unbanked,” assuming that there was a solid line between the two. Now we know that we should be talking about degrees of financial inclusion rather than banked versus unbanked. Someone who has a bank account might only use it to receive payments. Conversely, someone who does not have a bank account might find informal methods of saving to be just as effective.

The Global Findex raises our standards for information, and gives us a starting point to discover how people use products, what some of the nuances of national markets are, and where the financial inclusion industry can fit itself to the unique needs of its customers. First Imaginary Bank will certainly be asking far more informed questions now.

What have you found surprising about the Global Findex?

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Image credit: Global Findex

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