Human Centered Design (HCD) is providing South Pacific financial service providers with new motivation and tools to tackle the problems that have frustrated their initial attempts at mass market finance.

Most of South Pacific financial service providers have invested in digital infrastructure, launched cash merchant networks and signed up customers. But few customers have adopted the services and the providers have yet to build commercially scalable business models. The providers themselves acknowledge that their systems are not producing satisfactory results, but at this point, they lack the confidence that additional investment would produce better results. In this context, HCD has helped restore confidence.

The core problem in these cases is in fact to define service-related challenges. Our assessments of these implementations quickly reveal significant ground to be gained with improvements to transaction functionality, pricing, marketing, products and agent network management. Our customer-centered diagnostics reveal very specific features that are undermining the customer experience. And this defines the problem in a way that it can be addressed.

Senior managers are also finding inspiration in the project structure of these HCD-inspired initiatives. PFIP-funded projects are structured as “innovation labs.” They are isolated from the providers’ core business and resourced with core staff, outside design experts and funding to test variations of services, pricing, transaction channel functionality and marketing until they achieve a commercially sustainable level of customer adoption. For the senior manager who knows from experience that the dynamics of the core business tend to undermine new initiatives, the HCD innovation lab model is a compelling new approach.

PFIP’s innovation lab projects are still early stage. At this point, our confidence in the outcome builds on the early success of BIMA. Our partnership with BIMA is the oldest and has produced the most impressive results to date. BIMA entered the Papua New Guinea (PNG) with a product concept they had developed in other markets. They adapted the product to the local context and they designed product features, pricing, sales channels and payment instruments completely new to the PNG market. Once they validated the demand, feasibility and profitability of their product, they convinced a local insurance company to underwrite the products, and then quickly issued over 500,000 policies to low-income customers, an unprecedented achievement in South Pacific markets. After validating the business model, PFIP partnered with BIMA again to replicate the model in Fiji and three other South Pacific markets. BIMA is well on its way to replicating the PNG success.

We have ambitious expectations as well that come from seeing our other service provider partners work deliberately at creating a better customer experience. PFIP just launched a project with the Westpac innovation lab in the highlands of PNG. Our service design specialists helped Westpac identify quick first generation solutions for improving the customer experience with the enrolment process and with the in-store cash merchant network. The innovation lab team is reengineering and testing, and this is building genuine excitement as they prepare to scale.

The unique look and feel of the BIMA customer experience and the robust customer response are a compelling validation of HCD methods. And the market took notice. PFIP now has eight innovation lab projects underway, experimenting with mobile money, branchless banking, micro pensions, agricultural value chains, and savings groups to build a commercially scalable service that makes the daily financial life of Pacific Islanders better. We’ll keep you posted as we move forward.

######

About PFIP

PFIP is a Pacific-wide programme helping low-income households gain access to financial services and financial education. It is jointly administered by the UN Capital Development Fund (UNCDF) and the United Nations Development Programme (UNDP) and receives funding from the Australian Government, the European Union and the New Zealand Government.

PFIP aims to add one million Pacific Islanders to the formal financial sector by 2019 by supporting policy and regulatory initiatives, funding innovation with financial services and delivery channels, disseminating market information, and empowering consumers.

PFIP operates from the UNDP Pacific Office in Suva, Fiji and has offices in Papua New Guinea, Samoa and Solomon Islands.