Research & Analysis
Publication

Customer Centricity and Financial Inclusion

Many financial service providers struggle with high levels of account dormancy and customer dropouts, limited service usage, and loss of their best clients to other providers (GMSA 2014; Cheston, Conde, Arpitha, and Rhyne 2016). Negative customer experiences that erode customer trust are at the root of many of these challenges. Many of these negative experiences are the result of poorly designed products that do not respond to clients’ needs, are difficult for customers to activate and use, do not deliver on promised features, or are costly relative to their benefits.

The challenges financial inclusion service providers face to acquire, retain, and grow their client relationships to create sustainable, profitable businesses, however, are not unique. Financial service providers can benefit from lessons learned from other industries. This Brief touches on these lessons from other industries.

What Drives Businesses to Be Customer Centric?

Across industries, companies are changing the way they do business to reflect the reality that the customers who purchase and use their services are the source of all value created for the company (Fader 2012). Customer centricity provides significant opportunity for financial inclusion service providers to tackle and overcome the very real challenges that threaten their organizational sustainability and growth.

Three factors drive the adoption of customer-centric models: (i) the growing number of informed consumers who demand greater value for money, (ii) a more competitive playing field, and (iii) the quest for sustainable business growth. These models are supported by digital technology that enables firms to discover new customers and decrease cost to serve their customers, while simultaneously supporting the development of more convenient and robust customer value propositions.

What Is Customer Centricity?

Customer centricity is a business model that operates in a company’s ecosystem of customers, employees, suppliers, shareholders, and the communities it serves. In this ecosystem, customers are at the center of corporate strategy, decision-making, and organizational design (Leather 2013). At the heart of customer-centric models are the differentiated value propositions and customer experiences that support the development of enduring, trust-based relationships that generate value for a company and its multiple stakeholders. Customer-centric business models support customer retention, customer loyalty, more efficient customer acquisition and service strategies, and an expanded customer relationship. These goals are particularly relevant for financial service providers that seek to provide customers with value propositions that incorporate a range of services to manage wealth and risk and achieve life goals supported by full financial inclusion. Importantly, providers have a significant opportunity to use customer centricity for competitive advantage in a rapidly evolving and increasingly crowded financial services marketplace.