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“This place is run by the accountants”


CGAP Group, CGAP
Date Posted: Friday, November 04, 2011

This is the fourth post in a series about product innovation in branchless banking. In the last post we threw the focus on direct observation of consumers to source deep insights that lead to better products. We also released our detailed analysis. Today’s post describes a second key feature of the three Product Labs which will be established by CGAP’s bank, telco and other partners.

Let’s say you are a manager who has bought into developing products beyond the standard liquid wallet and P2P functionality ubiquitous in branchless banking. You want to innovate. Then you run smack into the existing biases, procedures, and requirements of your own company.

If you are not careful, your good ideas will die a slow death of endless internal analysis or be outright rejected because “the data’s just not there”. As one manager told us about his company, “This place is run by accountants. If you don’t have the data, you go nowhere.” How can you feed the beast and move forward rapidly to approval?

This is the question confronting senior managers CGAP interviewed at more than a dozen firms that ranged from a success story in mobile money in East Africa to the largest bank in a major Latin American market, the world’s largest handset manufacturer, and a leading South African supermarket chain adding financial services to boost customer loyalty.

This isn’t just a problem for senior managers. It is also a challenge in our Product Labs initiative. Each Lab will be implanted in a bank, telco, or other firm capable of massively scaling newly designed products via branchless banking channels. Labs will need to work with the ways that firms already design products. But the Labs could also help firms improve on two counts.

Picking the best ideas to pursue. All the firms interviewed said they rarely suffered for a lack of ideas. But they do suffer from the inability to tell which are worth chasing. As a result, choices are made haphazardly or, sometimes, all ideas are pursued with equal vigor. Managers felt stretched in too many directions and concepts that time showed to be worthwhile often took longer to emerge for want of enough resources.  Nearly all our interviewees agreed that earlier testing of ideas would help. But in many firms access to transactional platforms and core banking systems was tightly guarded. Pilots were something you do later in the product development process, not earlier.

Each Product Lab will include a rapid prototyping capability that enables our partners to mock up product concepts much sooner and put them in the hands of consumers. This may be as simple as basic storyboarding or a cardboard example, or an experimental version of the service coded onto 100 handsets and provided to customers for a week. The aim is to rapidly, cheaply and in a low-risk way test multiple ideas with real customers, selecting out the most promising for more traditional, large-scale piloting with all the cost and time that typically incurs.

Generating data to feed the business case. Early-stage testing accomplishes a second objective as well: real data on how customers use a service – how frequently, what transaction sizes, the effect of price changes – which can be used to diminish the cloud of uncertainty around a new concept. This can be critical to securing approval to proceed in the early days, and maintain a claim on resources as the project goes forward.

In the fifth and final post of this series, we’ve invited a guest to announce the first of the Product Labs.

- Sarah Fathallah, Toru Mino, Mark Pickens

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Name: CGAP Group
Title: Technology Program
Company: CGAP
View CGAP Group's Blog

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