While the actual uptake and activity levels of the GAFIS-supported products were consistent with expectations, qualitative findings among the GAFIS banks illustrate that the delivery of innovative savings products to low-income clients creates risk of sub-optimal understanding, which can affect the client experience, jeopardize the positive effect of the savings and also influence the long-term business proposition for the bank.
Reflecting on the experience of the GAFIS banks, this Focus Note 5 explores how banks, which are seeking to scale-up financially viable savings propositions, can address the issue of building customer understanding of the core product features. We find a number of challenges arise here, namely, as banks introduce alternative delivery channels (e.g., agents and mobile phones) to improve the viability of the overall product proposition (e.g., lower costs, improved customer convenience), these intermediaries introduce risk of miscommunication or missed communication and, in turn, misunderstanding or missed understanding. Of course, these risks should not turn financial institutions away from introducing ADCs, but rather they need to be aware of the risks and design products and communications carefully in light of them. The Focus Note highlights these issues and potential pitfalls, and also sets forth some guidelines for actionable methods to enhance customer understanding.