Under the direction of the chief innovation officer we were tasked with discovering and testing a financial product for near-prime customers that would improve their lives.
Research with customers and potential customers surfaced anxieties that ramped up each month towards their credit repayment date. The anxieties were caused by a combination of not knowing what their monthly repayment amount will be without guessing, little-to-no ability to save up money at short notice and 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. This was seen as a positive by many customers but would actually prolong their credit and keep them in the ‘min-pay trap’.
Our idea was to test a new kind of credit product that would allow draw-down of funds in a very similar way to credit cards, but repayment would be a fixed monthly amount (above min-pay). The fixed amount allowed customers to plan repayments with no surprises and reduce their anxieties. The repayment amount would be enough to reduce the balance by a meaningful amount each month (to avoid the ‘min-pay trap’) and low enough that the customer could afford them (checks would be made at application). Overpayment would be free and there would be no hidden costs.
In addition, we recognised that some applicants may be rejected due to little data being available to ‘score’ them. So we came up the the 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 repayments as if they had borrowed, for 3 or more months. After which we would use this extra data to make a fresh decision and 100% of the money they had ‘paid’ would be in waiting in a savings pot for them.
To move quickly we took our research insights and used How Might We questions to ideate the concept first rather than product solutions.
Using a design sprint, we created a 1-pager description, a landing page and begun false-door testing to gauge interest in the idea of the solution.
Initial testing was positive overall and allowed us to dial in the features and branding at a broad level. From here we arranged 1-on-1 workshops with sub-prime borrowers to get a sample of qualitative feedback that could highlight likes and dislikes at a more granular level.
We ran various activities to capture their thoughts on a range of online lending sites, and unknown to them, one of them was our new idea.
Once we had confidence in the concept we began producing a prototype to test the product idea and execution.
The product would be progressive web app that looked an behaved much like an app, allowing the user to instantly transfer funds to an existing account of their choice.
What we learnt
Testing a concept before a 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 build data around the appetite for the new type of financial product that would come in valuable when sharing results back to the wider company to build confidence.
Flipping the role of quantitative and qualitative testing methods worked well for this project. Quant was used pass/fail style usability tests that could run 100’s of tests overnight, while qualitative testing focused in on the failure points to find out in detail what when wrong and what the user expected.