The idea of customer-centricity doesn’t sound complicated. Shouldn’t every business be focused on its customers? However, even for businesses that do endorse a customer-centric approach, endorsement doesn’t necessarily translate into action. Financial service providers organize their businesses around their services. Even small tweaks to refocus the organization around the customer can require major institutional shifts.
Gerhard Coetzee, Senior Financial Sector Specialist at CGAP, recently presented at the Center for Financial Inclusion offices in Washington, D.C. on CGAP’s work on business models for customer-centricity. To assist institutions not only to prioritize but to effectively implement customer-centric products, CGAP is piloting a new tool to help financial providers better understand the complex needs of their customers.
In collaboration with LIVELABS, CGAP created the innovative Kaleido tool, a 360° customer profiling tool for designing financial services. The goal behind Kaleido is to understand and map the financial context of a household, which in turn provides valuable insights into the needs of clients. It is being piloted with Janalakshmi, an Indian financial service provider that serves over 1 million urban clients.
The first step in the Kaleido process is fairly straightforward – a questionnaire completed by families upon enrollment at a financial institution. These questionnaires provide the information needed to develop a visual map of a household’s financial indicators (see graphic). The data is synthesized into five sections: composition, events, attitudes, business, and finances. By compiling the financial profile of a household, Kaleido creates a holistic overview of the needs and aspirations of the client. More information is added over time, with Kaleido serving as the foundation for identifying financial needs, and the institution designing products and delivery mechanisms to fit those needs. Clients focus their lives around events and milestones, not around loans or savings, so developing a unique and comprehensive profile of each household is a crucial step to understanding their financial needs and developing customer-centric products.
Kaleido is still in its initial stages of implementation, with Janalakshmi conducting quantitative testing on aspects of the tool and piloting it with a limited set of customers. The next phase will involve a gradual integration of Kaleido into Janalakshmi’s core operations. As the system is refined and more data is included for each client, it is expected to evolve into a comprehensive resource that can continually assess the financial progress of households and inform product design. Over time, the insights drawn from Kaleido will be based on the financial journeys of a large number of households.
We are excited to see how Kaleido’s implementation affects the shift toward customer-centricity at Janalakshmi. The next challenge will be to translate these insights into design criteria and ultimately services. And to get more institutions to take up similar efforts.