A case for better financial products & services
By: Charan Ravindra
Tags: Financial Services, Finance, Financial Inclusion, Personal Finance, Customer Experience

Photo by Jon Tyson on Unsplash

In the last couple of months, as a part of my customer development research, I have been interviewing and surveying people regularly to understand the top challenges they face when it concerns their personal finance and what is causing these problems. During these interviews, most people felt the same about one thing. There needs to be better financial products or solutions.

To see why better solutions are needed, we first need to understand what is wrong with the present ones according to customers.

Customer is not the priority

One question that constantly bothers the people I spoke to was, what is the priority of financial institutions? Is it me or my money? It is a valid question. Most salespeople from banks and other financial institutions eagerly follow up to sell their products. However, when the same customer reaches out to customer care to resolve a problem concerning the same product, they hardly share similar levels of enthusiasm. In this case, the customer has to follow up several times and get buried in paperwork to get the issue resolved. No wonder, people think these institutions are just behind their money.

Why is everything so complex?

If you have ever tried investing or getting a loan, you would be asking the same question. Why is everything so complex? The entire process requires you to go through numerous pages of brochures and documentation loaded with financial and legal jargon. When your customer feels like they need a specialization or a degree to understand your marketing content and accompanying documentation, you know you have a problem!

Everyone except the customer makes money!

Mis-selling financial products is not something new and has taken place as long as financial markets and institutions have existed. What annoys the customer is that companies rigorously innovate to make money for themselves instead of their customers. Firstly, the agents or partners cleverly misrepresent the product and sell it to the customer to take home a hefty commission. The classic example being insurance policies sold as investments. Institutions then slap on sizeable management and administration fees for delivering returns lower than low-cost index funds available in the market. Even if these low-cost index funds are available through them, customers hardly hear about them.

A problem of plenty

Just like the famous line from a poem, “Water, water everywhere, not a drop to drink!” there are thousands of options out there. Nobody with a full-time job and a limited amount of time can figure out the right one for them. There are 5000+ mutual funds in India, thousands of insurance policies, and hundreds of credit cards and loan options. Why so many? Why can’t there be just a handful of great ones presented to customers in an easy-to-understand manner and help them make good decisions? It’s not that there are no answers to these questions. It’s just in the best interest of many players in the market to not answer them and maintain the status quo.

The devil lies in the details!

There are charges and then hidden charges. Nobody knows this better than anyone who has used a credit card. They allow us to happily spend the money we don’t have in the most seamless manner possible and then slap us with hidden charges in a statement which most people can barely understand. Also, why should one pay 3–4 times the interest rate of a personal loan to finance their spending on a credit card? Both of them are uncollateralized loans. Nobody knows why!

Why do we need better products and services?

In conclusion, we can see a strong case for better financial products and solutions. Firstly, we work hard for our money, and we shouldn’t be working harder to make it work for us. Secondly, making money without delivering good value to your customers is just not good business. Thirdly, prioritize your customers, and they will happily offer their money if they see the value. Lastly, financial institutions need to understand, there will be new players in the market willing to help their customers and disrupt them. If not today, pretty soon they will!