Going beyond customer needs assessments

Building customer financial capability, developing customer-centred approaches and addressing customers’ financial needs are hot topics for today’s financial providers trying to expand their outreach. This involves new ways of understanding the client’s perspective - not just how, but also ‘why’ people use financial services, and what can providers offer to better meet these needs?

The University of Bath and Oxford Policy Management recently collaborated to complete the first-of-its-kind qualitative impact evaluation of the FSD Kenya savings groups project. This was based on Realist Evaluation (RE), an innovative methodological and analytical design, never before utilised in research about the financial sector. We used RE to assess the impact of functioning savings groups at the household and individual level.

What is so innovative and exciting about this methodology and its application in the financial sector? Essentially, its variance from more traditional assessment methodologies. Realist Evaluation is based on Roy Bhaskar’s philosophy of critical realism, and is used for evaluating social programmes by generating plausible accounts of “…what works for whom, in what circumstances, in what respects and how.” (Pawson et al., 2005: 21). According to RE, interventions — such as financial solutions — only work in the right place, for the right people and at the right time. To understand what works, how, and for whom requires us to go beyond conventional input-output analysis, which sees the agent of change as the intervention itself. Instead we need to introduce a third dimension to this relationship through understanding the reasoning of clients or beneficiaries rooted in particular contexts, with different sets of values. It is the relationship between a solution and the clients who engage with it that will affect the usage and impacts that we observe.

For the team evaluating FSD Kenya’s Savings Groups project, this meant analysing savings group members’ reasoning behind their decisions to join, stay and use group services. This enabled us to dig much more deeply into the drivers of usage and impact than allowed by traditional evaluation methods, such as RCTs, allow. The RE method allowed us to analyse members’ decisions (project outcomes) and show how the intervention worked, for whom and to what extent for different categories of savings group members who benefitted from the project.

We propose that the key features of the RE methodology can be adopted by financial service providers as a way of testing and analysing customer behaviour and responses to new services and ideas. We believe scarce resources and logistical limitations of providers, together with the complexity and adaptive natures of customers’ needs and behaviours call for an easy and cost-effective research methodology — one that can deliver a robust and practical way of learning and implementing more successful interventions or services, designed for the right people, in the right places and at the right time. The RE methodology could be adapted to develop a quick and easy to use industry-facing decision-making tool.

Saltanat Rasulova is a consultant at Oxford Policy Management and Silvia Storchi is a PhD student at the Centre for Development Studies, University of Bath.