What the Unbanked Customer Really Wants

Fintech startups must meet them where they are, not only in a physical sense, but in a psychological one too

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By Mike Singh


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"If I had asked people what they wanted, they would have said faster horses." Henry Ford's words have become one of the most popular adages in business discourse, and for good reason. The idea captures perfectly the difference between what people think they need (that is, a faster horse) with what they actually do (that is, an automobile), and the role of the entrepreneur in discerning between the two.

While the gulf between incumbent technologies and new innovations may not always be as wide as horses and cars, it is always there for those who are patient enough to observe it. We witness this gulf in Southeast Asia, where close to a half billion people remain unbanked and thus unable to gain access to financial instruments, such as a savings account for their earnings, a line of credit for their small business, or a loan for their child's education.

The need

If you surveyed the unbanked for what they wanted—as some schools of entrepreneurial thought suggest you do—none of their comments would even touch upon banks, owing to the simple fact that many of them have never stepped foot in one, while others will not even know what they are.

The unbanked would simply ask for improvements on what they are already familiar with: They would wish for employers to disburse wages more frequently to minimize the need to store large amounts, loan sharks to offer friendlier terms, pawnshops to increase their valuations of pawned items, and even for friends and family to more generously lend money. In the parlance of Mr. Ford, the unbanked are asking for faster horses—minute iterations on the status quo.

The solution

Fortunately, many entrepreneurs in the region are blazing their own path, willfully oblivious to what the unbanked think they need. These entrepreneurs have set up opportunities for the unbanked to obtain the financial products previously inaccessible to them, such as mobile banking, personal finance, insurance, international money transfers, and even my segment, digital finance.

The fin-tech industry in Southeast Asia is succeeding on the strength of its customer empathy— industry practitioners understand the needs of the unbanked better than they themselves do. As with Ford and other entrepreneurs, we look past the more accessible payday lenders, more generous pawn shops, or other status quo upgrades they thought they needed, giving instead the solution that they really do. This kind of empathizing shouldn't stop at the product level. Businesses should extend the philosophy of anticipating customer needs to every aspect of their service.

Anticipating end-to-end customer needs

As most of the unbanked do not know they have fintech options available to them, marketing often comes down to market education. Fintechs must meet the unbanked where they are, not only in a physical sense, but in a psychological one too. We cannot assume they have any knowledge about financial services and instruments. We must build their knowledge base from the ground up.

Fortunately, emerging markets in Southeast Asia tend to be world leaders in online activity. Fintechs who operate here can follow a digital-first market education approach. If a person is searching for the minimum balance to open up a bank account on Google, sponsored search results from mobile banking companies can appear, providing options that are less cost prohibitive. Similarly, if a person is checking out the Facebook page of a furniture store or other page with big-ticket items, ads for digital finance companies can display, whose solutions can make the products accessible. The digital economy makes it easy for fintechs to find the unbanked when they most need the help.

Once the unbanked opt for a particular product, fintechs in Asia Pacific also make the tail end of the service process as convenient as possible.

The breadth of touch points makes it easier for unbanked consumers to make smarter financial decisions. In the case of digital finance, for example, anticipating that they may need thousands of touch points, and sometimes even alternate between channels, lowers the inconvenience factor of making repayments and helps them stay current on their loans.

In an age where we can get extremely detailed profiles of our target customers in an instant, it's easy to succumb to the temptation of querying or canvassing them for what solutions they think they need. But we need to value our intuition and insight as entrepreneurs. When others call for faster horses, we must always aim for cars.

Mike Singh

CEO and co-founder, AsiaKredit

Mike Singh is the CEO and co-founder of AsiaKredit, which operates Pera247mobile app, a solution that provides the unbanked and underbanked in the Philippines access to the digital finance they need. 

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