> Posted by Nadia van de Walle, Lead, Africa Partnerships and Programs, the Smart Campaign
Organizational change doesn’t always start from the top, but if it originates elsewhere, and the change is to last, it’s essential that leadership and management eventually get on board. For years, most of us in financial inclusion have advocated client centricity. If previously unserved client segments are to take up and use products and services for the first time, it’s essential that these products and services meet their needs. But how do institution leaders look at client centricity? I attended the recent Africa Board Fellowship (ABF) seminars in Cape Town, South Africa and joined discussions among financial inclusion CEOs and board members on this topic.
The CEOs and board members participating in the ABF program are from financial service providers offering a range of products and services in countries ranging from Kenya to Burundi to Tunisia and Uganda. On our first day, we discussed client centricity, a trending topic and one of interest to me as a manager of the Smart Campaign. The fellows’ varied experiences and ideas led us to some takeaways:
- Board members and CEOs see a clear business case for client centricity. Participating leaders viewed actively listening to their clients and mapping customer preferences and journeys as imperative for designing better products, building customer loyalty, fostering referrals, and developing competitive advantages.
- Client protection is NOT the same thing as client centricity; however, it is a key bar every client centric institution should meet and pairs well with a client-centric philosophy. In our discussions, the lines between these two concepts sometimes got blurred, particularly around product design and delivery. The group agreed that adherence to the Client Protection Principles is a baseline requirement, implying that an institution is at minimum doing no harm, while client centricity is a broader concept – a philosophy behind an institution’s practices. Participants noted the importance of consumer protection for reputation, brand, regulatory adherence, attracting investment, risk management, and avoiding client over-indebtedness. Further, many fellows linked their institutions’ social missions directly to adherence to client protection principles. Several fellows commented that in markets where a few bad apples engaging in fraud and poor client treatment had colored their sector’s reputations, their institutions had distinguished themselves, avoided such associations, and continued to operate healthfully, thanks to their emphasis on both client centricity and client protection. These focus areas help them differentiate themselves from competitors offering risky loans or practicing frequent rescheduling.
- Board members have significant responsibility to integrate client voices into their institutions. Participants agreed that client centricity was not just for loan officers or front line staff who communicate directly with clients. The board plays a key role in ensuring that client voices are incorporated into the organization’s decision making. We discussed the board’s responsibilities as falling into three buckets. (1) The board leads in making the case for customer protection and client centricity – not as a parallel work stream but deeply integrated into all aspects of the institution. (2) The board helps prioritize which actions in particular to take. We discussed potential low-hanging fruit such as introducing a client recourse mechanism, checking on PAR regularly, or introducing customer committees and client visits. (3) The board propels an institution from intent to action. For example, a board might push its institution towards applying for Client Protection Certification, demand a client voice strategy and work plan, check in on indicators such as PAR and staff incentives, define success metrics in relation to integrating client voice, help identify related tools and resources, incentivize management, and be a cheerleader.
- Technology is making it easier to listen to clients. Participating CEOs and board members gave examples, including dialogues with staff, focus group discussions, exit or large scale customer surveys, client hotlines, and customer care centers. More technologically-advanced examples included connecting with clients over social media and wechat, games, video chats, mobile apps, interactive SMS, and interactive voice messages.
- Yes, client visits take time and planning but they are very useful to the board. As a requirement of the program, every fellow conducts client visits prior to attending the seminars in South Africa. They all agreed that the visits had been eye-opening, enjoyable, and valuable in helping identify new products and modifications. During the visits CEOs and board members heard directly from clients on what challenges they face, what they do and don’t understand, how they solve problems in managing their businesses and household finances, their continued dependence on cash, and their confusion regarding recently released digital products. Some fellows were struck by the stories clients told of graduation to different products as they had grown out of small loans and needed larger products to purchase productive capital. Others were surprised to hear from clients that some front line staff needed to be retrained to improve service and that the institution’s financing rates were seen as quite high compared to peers. Others found the visits useful to remind themselves of the conditions in which their staff and clients operate. Overall, the CEOs were surprised by just how honest clients were and their creative use of products.
Applications are open for the fourth ABF cohort. For more information and to apply, click here.
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