Problem to solve

Oakbrook owns products in the loans space with high default and roll rates (customers not paying back or paying back late). The business strategy was to enter the line of credit space for near-prime customers, and access repeat, responsible borrowing in addition to staying in the loans space.

We were tasked with producing a proof of concept line-of-credit product that would avoid many of the customer pitfalls of a typical credit product (such as the minimum-monthly payment trap - more on this later).

Line of credit market size

image Research approach

Problem clarity was low, and the risk also low, so I proposed a research light approach.

General research on the target audience pains had already been carried out, so we focused on product market fit through light qualitative research.

User interviews

Remote, async focus group

Competition review

Money Advice Service audience segmentation (existing)

image Insights

Research with customers and potential customers surfaced feelings of stress that ramped up each month towards their credit repayment date. Stress was caused by a combination of not knowing what their monthly repayment amount will be, without guessing, and little-to-no ability to save money at short notice for unexpected expenses.

We also found that many customers did not consider the length of time they held their credit as important as the APR rate. However it was clear that unscrupulous tactics were common in the finance industry to keep customers on a minimum payment each month that only covered the interest. Minimum-payments were seen as a positive by many of the research participants but would actually prolong their credit and keep them in the ‘min-pay trap’ if it was used when not needed.

These issues are more relevant for individuals that are currently in the struggling and squeezed segments than the ones who have moved on to the cushioned segment (see segments below).

Key themes from research:

Potentially high monthly repayment amounts cause anxiety and stress.

Little-to-no ability to save for unusually high repayment amounts.

Minimum monthly repayment amount is a misunderstood tool.

Money Advice Service audience segments

Money advice service segment infographic for the segments of struggling, squeezed and cushioned

image Ideation

Ideation produced product ideas similar to credit cards in the way users accessed funds, but with consistent, fixed monthly repayment amounts. The fixed amount could allow customers to plan repayments with no surprises and reduce their monthly stress. In addition, the fixed amount could be enough to reduce the balance by a meaningful amount each month, to avoid the ‘min-pay trap’. Checks could be made at application that the monthly payments would be affordable, and overpayments would be free.

In addition, we ideated around the problem that some applicants may be rejected (struggling segment) due to not enough data being available to financially ‘score’ them. So we ideated an unlock feature. Applicants with low credit scores would have the option to show they are capable of the regular repayment amount. They would be asked to make three monthly deposits equal to what their credit repayments would be (the money would remain theirs with no fees and accessible at any time, although if they took the money back early they would not qualify). If three deposits were made successfully we could use this data to make a fresh decision and 100% of the money they had ‘paid’ would be in waiting in a savings pot for them.

image Prototypes & feedback

As we were developing a concept as well as a product, I prototyped adverts and landing pages to gather feedback on the concept, and app prototypes for feedback on the execution of the app experience.

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Concept testing

To test the product market fit I created adverts and built a landing page to capture waitlist sign-ups. After joining the waitlist we invited users to take various surveys or attend interviews. We used this feedback to understand what was expected and was wanted, so we could iterate the idea, branding and concept further.

Feedback

Initial testing was positive overall, with features such as the fixed repayment and affordability checks being highly rated. Initially the explanation of the concept was not particularly clear, so we had feedback to improve that. Once clarified test participants were keen on the idea, so we continued with confidence knowing it was a challenge of communication rather than of product market fit.

Product testing

We experimented with the idea of a progressive web app that looked and behaved much like a native app, allowing the user to instantly transfer funds to an existing account of their choice without needing to download an app.

After qualitative usability testing (so I had the ability to dig into some pains) I moved onto remote unmoderated usability testing. This proved useful for features that passed the 1-1 qual tests, as I could get quantitative usability pass/fail scores and notes on the users thoughts for 100's of users in a few hours.

Feedback

We experienced a lot of challenges with terminology and clarity on early iterations, so we simplified a lot of text to simple conversational language as much as possible. This improved the clarity and task completion rates and also the user satisfaction ratings.

Like or love idea

Would recommend

image Success measures

86% of target audience surveys told us they liked or loved the proposition of a fixed repayment amount. 92% told us they would recommend it to a friend.

Learnings

Testing a proposition concept before a platform prototype is crucial for large complex projects. Some of the details of the concept did not land well initially. They required explaining and visualising through various rounds of iteration before our intention was understood as intended. Only then we could gauge interest in the concept.

This approach of failing fast helped us gather insights around the appetite for this new type of financial product that would come in valuable when sharing results back to the wider company. Flipping the role of quantitative and qualitative testing methods worked well for this project. Quantitative, remote, unmoderated usability testing run 100’s of tests overnight in some cases, while qualitative testing focused in on the failure points to find detail for what when wrong, and what the user expected.

Context