Dimension 3: Design Products, Services, Delivery Channels and Mechanisms That Meet Clients Needs Todays speakers: Jude Anele, Head Direct Banking, Diamond Bank Jennifer McDonald, Manager Savings, Womens World Banking Yamini Annadanam, Independent Consultant The Universal Standards Implementation Series March 26, 2015 Agenda Review of Dimension 3 of the Universal Standards for SPM Presentation by Jude Anele, Diamond Bank Presentation by Jennifer McDonald, Womens World Banking Discussion with Participants Wrap-up There are 19 standards, organized into six dimensions. Today we will discuss dimension 3. Dimension 3 of the Universal Standards Title: Design Products, Services, Delivery Channels and Mechanisms That Meet Clients Needs Rationale: Understanding client needs is key to ensuring that products and services are actually beneficial to clients in progressing toward their business and family goals. Standards: This dimension has 2 standards and 8 Essential Practices. Dimension 3: 2 Standards 3A. The institution understands the needs and preferences of different types of clients 3B. The institutions products, services, delivery models and channels are designed to benefit clients, in line with the institutions social goals Dimension 3: Design Products, Services, Delivery Channels and Mechanisms That Meet Clients Needs Standard 3A. The institution understands the needs and preferences of different types of clients Essential Practices The institution seeks client feedback for product design and delivery. (Client Protection standard 1.2) The institution analyzes client satisfaction by client characteristic. The institution monitors the client retention rate by client characteristic and understands the reasons clients exit the institution. Dimension 3: Design Products, Services, Delivery Channels and Mechanisms That Meet Clients Needs Standard 3B. The institutions products, services, delivery models and channels are designed to benefit clients, in line with the institutions social goals Essential Practices The institution designs products that are appropriate to client needs and do no harm. (Client Protection standard 1.1) The institution uses its understanding of client needs and preferences to reduce the barriers to financial inclusion faced by target clients. The institution offers timely access to products and services that allow clients to reduce their risk and cope with common emergencies. The institution creates benefits for clients by enabling them to invest in economic opportunities and address anticipated household needs. The institution does not use aggressive sales techniques. (Client Protection standard 1.3) Reminder! Use the SPI4 Tool to Assess Your SPM Practices Essential Practices Standards Dimensions Indicators SPI4 is the common data collection and assessment tool for the Universal Standards Evaluates implementation based on indicators SPI4 Indicators Corresponding to Essential Practice 3B.4 Agenda Review of Dimension 3 of the Universal Standards for SPM Presentation by Jude Anele, Diamond Bank Presentation by Jennifer McDonald, Womens World Banking Discussion with Participants Wrap-up Meet your Speakers! Name: Jude Anele Title: Head Direct Banking Organization: Diamond Bank, Nigeria Name: Yamini Annadanam Title: Independent Consultant Name: Jennifer McDonald Title: Manager Savings & Alternate Channels Organization: Womens World Banking Please tell us a bit about Diamond Bank Diamond Bank Plc was founded in 1991 in Nigeria Diamond Bank Plc is a universal bank offering a full range of products & services in Retail, Commercial, Corporate and Investment banking Diamond Bank is a publicly quoted company in Nigeria and the Professional Securities Market of the London Stock Exchange The Retail division of the bank was formally created in 2008 # BRANCHES250+ (nation-wide) # RETAIL CLIENTS3.5 million TARGET RETAIL CLIENTSUnderbanked, Mass market, MSME segment RETAIL PRODUCTS / SERVICES Savings & Current Accounts Debit & credit cards Consumer Loans MSME Banking Diamond Online & Mobile MISSION: WE WILL BE THE BEST RETAIL BANK IN NIGERIA BY EXCEEDING THE NEEDS OF OUR CUSTOMERS. What is BETA Savings? Why was it started? PRODUCT DESIGN BETA (good in Pidgin) is a simple savings account tailored for market women, that offers maximum convenience to customers by delivering a low cost banking service to their shops. No forms, no signature, no ID required, no account references, no minimum balance No monthly fee, no deposit fee, no withdrawal fee (ATM/branch) Starter pack with ATM card for instant account opening Rewards scheme with weekly cash prizes RESULTS (as of December 31, 2014) 100 branches Over 154,000 accounts Over 1.6 bln in deposits (USD 9m) Average account balance 11,080 (USD 69) 567 BETA Friends Women 35% of account holders How does the product work? ATMBranch MULTI-CHANNEL ACCESS FAST ACCOUNT OPENING Account opened in five minutes, from anywhere. BETA Friend captures data and photo through mobile app. Customer receives account number and mobile PIN via SMS. Customer receives starter pack with debit card, PIN mailer and info guide. BETA Friend Market-based sales and service team. Promotes BETA & opens accounts. Collects deposits, handles withdrawals in the field. How do clients benefit from the product? CUSTOMER FEEDBACK Highly positive - removes barriers, combines security of a bank with convenience of informal savings Its nice, as theyre collecting every day. I love it. Its not every time [that] well have time to go to the bank. (Focus Group, Woman, Market Trader) I have been wanting to have an account with Diamond for a long time, but people scared me that you [need] a lot of money. I didnt even try to find out. But I still had that ambition. (Focus Group, Man, Market Trader) CORE BENEFITS KEY MESSAGES HOW DO CLIENTS BENEFIT? We come to you, you dont need to leave your shop to save or withdraw. No min balance, no deposit too small, no monthly fees. Monthly cash prizes, save more for more chances to win. ConvenienceAffordabilityRewards What benefits have accrued for Diamond Bank? Supports Diamond Banks growth objectives financial inclusion as market development Uses existing network of market branches to offer an innovative value proposition and reach more customers Savings as an entry product to gain footprint and get to know the segment Offer convenience at reduced cost through alternative channels Opportunity to increase participation of women in customer base Expansion of proposition to cross sell other products including credit Meet your Speakers! Name: Jude Anele Title: Head Direct Banking Organization: Diamond Bank, Nigeria Name: Yamini Annadanam Title: Independent Consultant Name: Jennifer McDonald Title: Manager Savings & Alternate Channels Organization: Womens World Banking Agenda Review of Dimension 3 of the Universal Standards for SPM Presentation by Jude Anele, Diamond Bank Presentation by Jennifer McDonald, Womens World Banking Discussion with Participants Wrap-up 35+ years focused on womens access to finance 21 million active clients 68% women 38 institutions $8.5 billion in outstanding loan portfolio $5.5 billion in deposits MIDDLE EAST & NORTH AFRICA Countries: 5 Institutions: 5 SUB-SAHARAN AFRICA Countries: 9 Institutions: 10 ASIA Countries: 6 Institutions: 12 LATIN AMERICA AND THE CARRIBEAN Countries: 7 Institutions: 10 EUROPE Countries: 1 Institutions: 1 Tell us a bit about Womens World Banking Remove barriers Instant account (in-field account opening with starter pack) Simplified account low KYC Make it accessible No monthly fees Pay-as-you-go transactions fees Low minimum balance requirements Incentive savings Provide rewards and prizes Interest on deposits Close the emotional gap Simple, local language Use visuals for key messages Below-the-line activation Key influencers Market activation Educational marketing Practical, relevant, delivered in- field Aimed at increasing confidence in using financial services and promoting consumer protection Take the bank to the customer Direct sales team to open accounts Offer a convenient and safe place to save Build wider distribution network Agency banking and mobile partnerships Integrate with bank network Incentivize branches Train staff Metrics and performance monitoring Detailed, targeted and insightful assessment of women as target group through in-depth customer research Comprehensive, qualified and efficient assessment of institution Product DesignMarketingOperating Model Change Management: Business case with financial model and projections Leadership development to engage decision-makers at different levels Exposure to best practice in other markets What is your approach to product design? What was Womens World Bankings role in developing BETA? 2012 Institutional Diagnostic & Project Planning Customer Research Product Design & Business Case Exposure Visit Marketing Strategy & Pilot Planning Preparation Pilot Design & Preparation Pilot & Prep for Roll-Out National Roll- Out Further Customer Research Business Case Product Design & Development BETA 2.0 Pilot Preparation Pilot Evaluation & Measurement Preparation for Roll-Out Pilot Evaluation & Measurement Preparation for Roll-Out 2014 Roll-Out & Product Extension What were the market research findings and how did it influence the BETA Savings product design? Key FindingsDesign Implications 1) Strong savings culture daily savings common Majority save daily with informal tools (up to 60% of income) Willing to spend at most minutes to transact Offer doorstep savings collection to win their business and capture higher balances 2) Target customers are very time poor especially women Long commutes in Lagos, in addition to pressures of business and family Product education through sales team to make it convenient and relevant to customers 3) Banks are familiar but are not considered to be relevant Ambivalent relationship with banks; complain about high costs and hidden fees Believe the amounts they save are not worth saving at a bank Eliminate the word Bank and banking terminology from marketing Adopt commonly used terms like put money and take money What were the challenges involved? How did you address them? 1) Proving the business case BETA offers little fee revenue business case is based on margin earned on deposits Developing new products to meet customer demands, as well as to increase balances and diversify revenues BETA 2.0 will offer credit, target savings and mobile value-added services 2) Reaching women Women are strong and active customers once they are convinced They are risk averse, ask more questions and need more information Institutional commitment is key to reaching them Focus on Women bonus boosted women to 50% of new clients but challenge to sustain 1. Use research to obtain insights into customers aspirations and concerns. 2. Use insights in product design and marketing, to meet needs, spark interest and motivate customers. 3. Understand the potential impact of the new product on the institution. 4. Case study in product design for savings in Nigeria: - Product based on customer understanding, building on observed savings strategies. - Generic products often do not reach women; inclusive products designed for women also appeal to men. - Improving product through product review cycles to respond to customer feedback. - Product based on customer understanding, building on observed savings strategies. - Generic products often do not reach women; inclusive products designed for women also appeal to men. - Improving product through product review cycles to respond to customer feedback. What are the things practitioners should keep in mind for developing appropriate products for clients? Agenda Review of Dimension 3 of the Universal Standards for SPM Presentation by Jude Anele, Diamond Bank Presentation by Jennifer McDonald, Womens World Banking Discussion with Participants Wrap-up Agenda Review of Dimension 3 of the Universal Standards for SPM Presentation by Jude Anele, Diamond Bank Presentation by Jennifer McDonald, Womens World Banking Discussion with Participants Wrap-up Take Action: Use the Implementation Guide! Download the guide here:standards Take Action: Consult the Resource Center! Visit the resource center here: Where to find more information: The Universal Standards of SPM Manual: The SPI4 social audit tool: The presentation and recording from todays session:implementation The SPTF Resource Center:The SPM Implementation Guide: Thank you for your participation! Please join us on 23 April 2015 for a discussion about how to improve practice in: Dimension 5, Treat