> Posted by Alexia Latortue, Deputy CEO, CGAP

The Financial Inclusion 2020 campaign at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. This blog series spotlights financial inclusion efforts around the globe, shares insights from the FI2020 consultative process, and highlights findings from “Mapping the Invisible Market.

When I was young, the word “camp” was synonymous with freedom and fun. These days are long gone. Today, the word conjures images of debate at best and of self-righteous positioning at worst. There seems to be a tendency in many fields for participants to divide themselves into opposing factions. Even in the field of financial inclusion, where we may share a common vision of full inclusion, there are at least two camps with deeply held beliefs about how to get there.

Some people are in a camp that is all about the economics of supply. They posit that if we can find ways to offer insurance to poor and low-income people profitably, the rest will follow. If we can collect tiny amounts of cash in cost-effective ways, bingo, small balance savings accounts will be available to all. The promise of cost innovations, combined with increasing incomes among base-of-the-pyramid customers may be all that is needed. This is the “If We Build It, They Will Come” camp.

Another camp is all about deepening our understanding of clients. We need to empathize, focus group, observe, and ethnographically study more and more deeply. We need to get into the clients’ shoes, probe their needs, and predict their behaviors. If only we understood clients better, we would serve them better. This is the “If We Understood Better, They Would Be Better Served” camp.

I don’t particularly want to play in or debate on behalf of either camp.

We have seen savings accounts opened that remain dormant, and payment systems that are not leveraged. The “If We Build It, They Will Come” camp just doesn’t do it for me. We have also seen organizations that possess deep insights about their clients and potential market, but have no idea how to translate the knowledge or deliver anything at scale. The “If We Understood Better, They Would Be Better Served” camp also doesn’t do it for me.

Rather than camps, I want to propose a three-part strategy to achieve solutions that work for clients:

  • Understanding Current/Potential Clients
  • Designing Effective Organizational Delivery
  • Making the Business Case Work

A consultant explains how to use a mobile application to two Ugandan men.Putting all three elements together should help answer major questions that, if answered, might truly advance our objectives. They are:

  • What does it take for a financial service provider to move from a transactional approach (narrow focus on selling a product to a customer) to a relationship approach (broad focus on understanding customers’ dynamic needs over their lifecycle and offering solutions to meet their needs)?
  • How can a financial service provider design its systems, processes, operations, and human resources to deliver solutions to its customers?
  • What is the business case for delivering client-centric solutions?

The answers to all three questions are needed to create value for providers and clients alike. And answering them should be a perennial priority for any serious actor in the financial inclusion space, because people and markets are dynamic and the answers will likely need to evolve.

Sign up here to join the three-part camp and share your ideas and feedback. The Clients and Products Working Group of the Financial Inclusion 2020 Project is examining diverse facets of the challenge of understanding client needs and designing a range of products informed by these needs. Watch this space as the working group begins to roll out elements of its draft action plan.

The author, Alexia Latortue, leads FI2020’s Clients and Products Working Group and is the Deputy CEO and Manager of the Clients and Products team at CGAP.

For more information on Financial Inclusion 2020, sign up for campaign updates.

Image credit: Heather Thorne/Grameen Foundation

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