Imagine the following scenario: after going without a bank account her entire life, a poor Pakistani woman establishes a checking account to accept government support payments. She takes her new debit card to the local ATM to withdraw some cash for the first time. After entering her PIN three times without success, the machine swallows her card on the assumption that she was trying to use it fraudulently.

If you were in her place, what would your reaction be? Would you trust your new bank and use the products they offered you?

This scenario was recounted in a recent CGAP post, and it ended with a grimly amusing twist: the woman was using the correct PIN, or what she believed to be the correct PIN. She entered the digits from right to left, which would’ve been appropriate for her native Urdu language, however the ATM required customers to enter the digits in the English style from left to right.

This sort of error in product design and customer support can be highly damaging to financial inclusion efforts. To attract customers that are unfamiliar with the formal banking system, especially those in the developing world, banks must provide education about the new technologies and policies that have the potential to be intimidating or inconvenient. Any hitches in accessing these services can undermine a customer’s trust in the provider, and trust is a major factor in the decision to use, or avoid, formal services in the first place.

Further complicating the issue, providers must navigate a minefield of potential barriers when offering services in developing markets. Indeed, obstacles like low levels of literacy and financial capability among customers and a lack of cultural awareness or responsive service among bank employees contribute to low adoption rates and financial exclusion. Though mobile money access has spread across the developing world, the GSMA estimates that over 70 percent of subscribers were inactive in 2013. In India, the government’s ambitious financial inclusion drive has opened over 70 million new bank accounts for low-income customers, however about 75% of those accounts remain unused. Furthermore, among the five major banks with over 77 million customers in Colombia, India, Kenya, Mexico, and South Africa, dormancy rates range from 20% to 90%, with a median of 50%.

What can financial services providers do to turn these numbers around? The answer boils down to listening to customers and empowering them through services built around their needs. This practice, sometimes called human-centered design, is the focus of growing interest in the financial inclusion community, and it has caught the attention of both new and established companies. For instance, a collaboration between the Grameen Foundation and ideas42 on CARD Bank in the Philippines led the bank to incorporate behavioral design principles into the development of its new savings accounts, based on research into the local market. The result: initial deposits were 15% larger, account balances were 37% larger, and customers had a 73% greater likelihood of initiating a transaction in their new accounts. Similarly, Meed, a fintech startup, has based its approach on extensive research into the underserved market. The company’s findings drove its employees to design a suite of products that address the core needs of their target customer. Meed’s member banks provide checking and savings accounts with no minimum balance or overdraft fees, and the amount saved serves as collateral for a line of credit that can potentially help build users’ credit history and facilitate access to more banking services like small business loans and student aid. In addition, Meed members have the ability to earn money through the company’s patent pending SocialBoost. Meed members can also transfer funds domestically and internationally for no additional charge. This suite of financial products can be accessed entirely through an intuitive smartphone interface, and the products aim to make money management simple for members of every income and education level.

As consciousness grows about the financial needs – and vast market potential – of underserved customers, the movement toward customer-centric products like these will undoubtedly accelerate. The more we see customers’ needs and behavior driving financial inclusion efforts, the greater the potential for meaningful impact.


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