Learnings from working on digital financial solution in Indonesia
The first project related to finance that we did was 4 years ago, coming from an established bank. Ever since, we’ve been working on numerous projects in financial sector, both with banking institutions as well as non-banking players such as telecommunication, tech infrastructure, financing startup, transportation, and social crowdfunding.
It is fascinating to see wide variety of companies competing to offer financial solutions for the diverse target customers in Indonesia, especially in digital area. Even though each financial solution will be affected by different factors (organizational structure, technology, target market, etc.), we found there are a couple key things to consider:
- First trial matters, words travel fast
Financial activity is a sensitive issue. Many people are reluctant to try new products in finance. People who are usually really open minded with new things could become conservative when it comes to money matter. Though mobile penetration in Indonesia is high, it doesn’t automatically translate to high penetration of financial services delivered through the digital platform. They could have made Youtube as their primary media source yet still go to the neighbourhood warung to buy phone balance.
Testing the solution as early as possible, as often as possible may help uncover people’s concerns on a new financial solution. We can explore whether the flow makes sense and whether the visual leads users to actions that they want to accomplish. Testing the concept before launching publicly is key because it allows potential users to try it without risking actual money. Further along the line, we need to make sure the system has no apparent bug that may impact the value of user’s money. The design of the system should also support undesired condition, e.g. slow and unreliable Internet connection, and provide fall-back mechanism if that happens.
Financial being a sensitive area, we can not emphasize more the importance of assuring smooth experience for people who try the actual product for the first time. Indonesian people are very social, giving high marks for influential factor through social circle. If users find their first time experience not pleasant, they are not only going to abandon the product, but also tell their peers not to use it, with full-blown emotion.
The chain of word of mouth in Indonesian society is remarkable. For example, in one of our research we met someone who moved all of her saving from her old bank to a new one simply because one neighbour told her that the long relative of this neighbour knew someone who lost his money in her old bank. And she passes on the story to others, even though she never experienced it herself. In some worse condition, the bad experience becomes ‘myth’ that is attached to the product which makes it really hard to recover the image.
2. Dance between simplicity and security
In most cases, people already have some ways to do whatever financial activity that is being offered by the new digital financial solution. If this new solution is answering the untapped needs that people only have a workaround to do it, then they will see it as an already much better alternative, as long as there is no fundamentally flawed flow. But things can get more complex if the target of the product already has a solid yet conventional methods of doing it. The new solution should be dramatically improving the process for users in order to convert. For example, let us take a look at the rising solution of digital payment that try to replace cash in day to day transaction.
Cash money as we know it has been around for quite a long time and it can handle much variety of transaction amount within its system. Paper and coin with different printed value are designed to do just that. Even though there are few drawback of the system such as crumpled and torn money or lack of small value for change, the overall system is simple to use.
Many digital payment solution promise to be faster and more reliable than cash, either through digital money in plastic cards or smartphone apps. This is true when all the payment are automatic or have a fixed amount like Commuter Line ticket and TransJakarta. But when it comes to dynamic small amount payment, things that often happen in day to day transaction, cash is still much faster and easier to use.
Imagine this scenario, you are in convenient store to buy a snack. Which one do you consider faster: take our wallet from our pocket and pay it in cash or wake up our phone, open the app, do whatever necessary to trigger the payment interface (could be OTP, QR code scanner or else), input the value and confirm the transaction? Or if you are using digital money in card, notice the extra steps the merchant needs to do to trigger the payment within their own POS system to be able to accommodate the card. Suddenly you already have several people behind because you are holding up the queue.
From our previous research this usually happens because of technology limitation and security purpose. Some new payment methods are not well integrated to the POS used by merchants and require them to perform extra steps to be able to accommodate the new methods. Throw some extra steps to make sure the system is robust and could not be tempered, and you have this complicated flow unbearable to use, either for the users or the merchants.
Limitation and security measure are always to be found, and it’s not something to be avoided. In fact, we should embrace these. Sit down with all the stakeholders involved and find ways to make it simpler. Then test it out the system through roleplay, enact the flow from both user and merchant side, see where the flow breaks down, find workaround, test it again and repeat until you find a good balance between the requirement (technology and security) and the ease of use. Only by actually trying the system you will know how good or bad the system is.
3. Improve users’ daily life continuously
Many digital financial solutions set aside certain amount of money to give people boosters to try their products. Usually these boosters come in form of discount, cash back, or gifts. Until certain degrees, people will react positively to these boosters, but then usually it fades.
Although it is a good in the beginning, booster alone is not enough to make people constantly use the new solutions. We need to have deep understanding of our potential users. See how they do their daily life. Learn how they do certain part of their day that are close to the product offering. Search the most relevant area where the products could show its features and at the same time improve the users’ life. So when the booster is gone, people already experience an improvement in their daily activities when using the products, and it is hard to justify coming back to life before the improvement.
For example, people will get a discounted ride when using Go-Pay within Go-Jek. But what they get is not only a price cut, but also eliminating the problem with drivers who don’t have small change, and saving some time if the drivers are kind enough to exchange their money with local vendor, or avoiding to grump to the drivers if users are forced to let go their change. Being able to skip that on a daily basis is huge. So even when the discounted price right know is actually on par with other online ojek platforms, many people stick with Go-Jek and using Go-Pay.
Things to remember
Financial activity is a sensitive issue for most people. It is a complex area that sometimes temps us to bypass the process and jump to what we consider a good solution for our users, while ignoring what users actually need. Understanding the behaviour of our target users is key and testing our product as early and often as possible is a must. Because if we do not handle this complexity early on, our users will. Don’t wait until users associate our product with bad experience to get us moving.
