Design thinking and financial services innovation

“Design thinking is a human-centred approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.”
— Tim Brown, CEO of IDEO 

Design Thinking has become the standard of successful technology products globally as it takes a “people first” approach to innovation. The key term in most definitions of design thinking is that it is “human-centred”. Products don’t exist for their own sake; they exist as human “affordances.”

The Psychologist James J. Gibson developed the concept of “Affordances”, and he described it as “what the environment provides or furnishes the animal”. Design thinking takes these affordances and turns them into transformational or transcendental experiences.

Donald Norman, the author of the bestselling book “The Design of Everyday Things,” posits that “design serves as the communication between object and user, and how to optimise that conduit of communication to make the experience of using the object pleasurable.”

MAZA
I am on the board of a not for profit healthcare transportation startup in Ghana named MAZA Health. The model MAZA created was quite simple. They provided modified tricycles to riders who could use them for regular transportation business but have to dedicate a portion of their time to serving pregnant women in the community who needed emergency transportation. These women were also meant to pay a nominal subscription for this ambulance or transportation service, and that is where we began to see unique behaviours.

Pregnant women would pay for the service and not use it. They would opt for their husbands to take them to the hospital instead. There were others who found it difficult to make payments on time.

Initially, the founder thought that default or delayed payments were an indication of extreme poverty, but we found that this was not the case. It was an indication of the lack of use of cash. The value and wealth these rural families had was stored as farmlands and food crops. Converting that into money required a tedious process of selling farm produce to an aggregator who would probably not pay a fair price. They decided to trade food or services for other needs with themselves rather than convert it first to money. A barter value chain. These types of barter systems are common in rural Africa and have existed for generations.

MAZA was a design thinking epiphany on many fronts. The usage data revealed so many things, but it was in the little quirks around payments that I understood the behaviour of those classified as “unbanked” and why they remain so. We may see them as financially excluded and disadvantaged, but they are not. They have only developed alternative transaction mechanisms without cash that suits them better.

While central banks are talking about financial inclusion, fighting cash and the cost of cash management, these communities have little or no use for money. It also explained why informal value chains readily adopt alternative value transfer mechanisms like mobile payments. Cash is a burden, while money is a good store of value, the distribution of cash itself has been fraught with risk. It is easier to steal a box of cash than to rustle a herd of goats. It is also easier to move from one “cashless” state to another. The weird thing was that MAZA gave the rural women phones, but they gave them to their husbands. The men are early adopters of mobile payments, but the women were not. Culture doesn’t just eat strategy for breakfast; it makes the strategists very confused.

Designing for the “happily unbanked.”
In my last Guardian article, I wrote about the unhappily banked or “underbanked”. I believe the other part of the population who do not use banking services at all are happier to remain that way. I call them “happily unbanked”.

The happily unbanked is a segment of the population who do not need the kind of services current banks provide and are happy with the alternatives. Contrary to what people may think, these type of people are found everywhere including the developed markets.

I am currently reading a highly recommended book titled “The Unbanking of America” by Lisa Servon. Lisa is a university professor who decided to work as a teller in a credit union (community bank) in America to try to understand what the underserved need. The book was an eye-opener in many ways. I saw so many parallels with our part of the world. Lisa’s experience was similar to my MAZA experience. You can’t make value judgements or build products for people you don’t understand.

The happily unbanked opt for financial stability through value chains that already exist and don’t need any mandated or imposed service that does not meet their needs. Building new technology products for them requires understanding these existing value transfer mechanisms. Intuitive design and design thinking will lead to new products for this sector that will not look like traditional banking products.

Products that will make them remain in their blissful state without the headache of cash. This segment of the population is the next frontier of African technological innovation. We need to ignore the “financial inclusion” noise and learn.