Véronique FABER introduced the presenters of the TED-style session and explained how it would operate. She added that the presentations would be filmed and be posted on the e-MFP website.
Etienne MOTTET opened his talk by illustrating the connectivity trade-off when using a smartphone. While technology and connectivity enhance existing value, over-connectivity leads to distractions that are an obstacle to creating value. Mottet explained the two rules that Business & Finance Consulting (BFC) used in a pilot in Georgia: 1) Do not assume that people will do smart things with a smartphone; and 2) Do not assume people will use your system; instead, put them in a situation where they don't have a choice but to use it.
He then further explained the pilot in Georgia, whereby BFC developed an e-commerce marketplace for farmers. The farmers participating in this pilot could buy and sell products on a website, either directly or through a loan from the MFI that BFC partnered with. This system built on the strong connectivity which already existed between these farmers. BFC piloted the tool with farmers in a remote area of Georgia who did not have the option to go to a market. The online marketplace was integrated with the automated scoring system of the MFI, and served as a platform to disburse "Fast Input Loans". The loan officers met with farmers and placed orders on the platform.
After five months, the product was deemed a success, resulting in over 2,020 loans. Mottet explained that BFC's pilot used a simple technology to capitalise on existing value. He added that rolling-out a farmer app would have been a lot riskier and further argued that the value of this tool lay in using the infrastructure and partnerships that were already in place. Mottet concluded that "building on" is much easier and more efficient than developing new products that disrupt how people do business.
Antonique KONING, from CGAP, explained that customer empowerment relies on relevance and trust. She added that many financial service providers dis-empower their clients because they don't understand them, and don't adapt their services to their needs and contexts. Koning added that there is a business case to maintain better customer relationships. She explained that an MFI does not benefit from clients who do not use their accounts. By retaining 2% more clients, MFIs can decrease costs by 10%.
She explained that MFIs should simplify their products by offering choice and control. They should also improve the interface to accommodate the capabilities of their customers. And they should facilitate learning by providing the necessary tools.
Koning gave several examples of organisations that recognised their clients' needs and that designed solutions for these needs. For example, CARD Pioneer Microinsurance in the Philippines offers its clients choice with a menu of insurance options. EKO struggled with low activity on its money match fund in India, and developed a "fill the wallet" app that gave their clients more control over their finances. With this app, clients could design their own strategies and goals. Koning also shared the example of MetLife, a global insurance company. MetLife re-engineered its insurance, by giving their clients a fast food menu of options and by flexibly responding to a variety of needs from different customer segments. MetLife discovered that a 1% growth in customer retention in Japan resulted in USD 19 million earnings in one year.
Koning argued that customers are empowered when they are able to determine which services they think they need, not what MFIs think they need. She concluded that customer empowerment is about creating and maintaining customer relationships that help to build business goals and achieve meaningful financial inclusion.
Tom ALLEN, from VisionFund International, set the stage by highlighting several examples of companies using big data. He explained how Amazon uses big data to predict what a consumer wants to buy, but emphasised that the world of microfinance doesn't use data in the same way. Allen proposed that big data can benefit the microfinance sector. He shared an example of how Edward, one of VisionFund's clients, used data from a simple transistor radio to better understand what happened in the world.
He illustrated how VisionFund wanted data to better understand its clients, to find out if they receive the financial services that they need, but also if they receive the other support that the NGO offers, such as financial education. The NGO wished to use this data to adapt their services to their clients' needs.
Allen explained the challenges that VisionFund faced in using big data. The NGO has over 30 MFIs and 1.2 million clients. Many of VisionFund's MFIs operate on paper, making it difficult to collect and analyse their data. The NGO's challenge was very basic: finding out how to interact with their clients, how to take that knowledge and apply it to their services. They needed to monitor, measure and manage what they do.
Allen added that for VisionFund, technology helps the organisation to better understand their clients. He explained that VisionFund needed a global data depository system, since it wanted to share best practices from different MFIs. VisionFund employed a simple tool, which analysed data across its organisation into a central system. With this analysis, the organisation now has insights into its entire portfolio, clients and risks.
The moderator opened the floor for questions. A member of the audience asked if there had been any results from the tool that Allen presented. Allen then explained that, since the tool had only been implemented in 2016, results were still limited. He added that VisionFund had three main goals with this tool: cost reduction, change how VisionFund interacts with clients, and change products to better fit their clients' needs. He added that, with the tool, they can show their MFIs where they are missing data. This has changed how their MFIs operate, and resulted in a behaviour change within these institutions.
Another audience member discussed BFC´s pilot. She asked Mottet how they designed this product and how they determined what would work. Mottet argued that before designing a product, the company needs to reflect on its DNA to determine what they are good at and use technology to do that better. To achieve progressive change, he advised not to use technology to do something completely different.
A member from the audience asked Koning how organisations determine the value of customer-centric solutions and how they should structure themselves to focus on this business case. Koning explained that, especially in the financial inclusion space, frequently financial service providers already consider themselves as being customer-centric. She argued that a shift in mindset was required in the organisation, which is only possible when people speak the same language.