Serving the Underserved: Niche Markets

Five things we learned about inclusion in financial services.

There are millions of people whose needs are still going unmet by the financial services industry.

Here in the Experience & Innovation consulting team at Engine, we are all about creating opportunities for growth and believe that any new propositions need to benefit the customer just as much as they do the business. But when looking into financial services, it became clear that there are large groups of customers who aren’t considered in the creation of new products, services and experiences.

We first looked at how inclusion is creating new opportunities, and challenges, for financial service providers in the article Banking For All. But to unpack it even more, on the morning of November 10th we were joined in a panel discussion by Samantha Gould, Head of PR and Campaigns at NOW: Pensions and Dave Jackson, an Assisted Digital and Neurodivergence specialist who heads up the Service Design team at Engine Transformation. Here are our five key learnings from the event:

1. Inclusion is more than a buzzword, it’s vitally important

If we first think about design and the individual experiences people have, the scale of the challenge facing design is not widely understood. The pandemic has changed our online habits forever, as those who were previously unengaged with digital services, 9 out of 10 of them will now continue using digital services. To make sure these services truly work for everybody we need a better understanding of where challenges exist, something Dave shed some light on during our discussion:

  • In the UK, 6.6 million adults have dyslexia, 6.6 million have dyspraxia, 2.6 million are autistic and 2.6 million have ADHD
  • 1 in 20 UK adults have the reading age of a five-year-old
  • Age is another factor that can’t be ignored. As people age, their memory naturally declines as does their ability to problem solve and complete tasks.

2. There are very real consequences for customers if businesses do nothing

When thinking about communities that are often overlooked by traditional financial institutions, Samantha provided us with some staggering implications in the pensions market as an example:

From their December 2020 Underpensioned report, NOW: Pensions discovered the most under pensioned groups in the UK are women, divorced women, single mothers, carers, people with disabilities, people from BAME groups, the self-employed and multiple jobholders. These groups are reaching retirement age with just 15% of the UK average pension of £80,000. Not only this but women are set to retire with £145,700 less than men due to them bearing the lion’s share of childcare and domestic responsibilities and historically working less than men. This is particularly disadvantageous as women live on average 3.7 more years than men, meaning their pension needs to last longer.

3. And there are serious commercial consequences too

The 2016 study by Click Away Pound says that 71% of people that have difficulty using a service will abandon it and they estimate that those customers who click away had an estimated spending power of £11.75bn, around 10% of the UK online spend at the time. Research also says that 82% of these people would spend more if these services were easier to use. Beyond the clear moral obligation to be more inclusive, this further highlights the commercial imperative for businesses to act now.

4. But a wave of new financial providers are stepping up to better meet customer needs

Niche banks — or ‘neo niches’ to those in the know — are on the rise. These financial service providers are built to serve specific communities and demographics, whose needs have been overlooked by incumbent banks. And when we say incumbents, this is just as true for the likes of Monzo and Starling, as it is for RBS and Barclays.

In the niche bank category sit the likes of Aspiration, a fintech committed to fighting climate change, and Daylight, a bank designed for the LGBTQIA+ community. And, thanks to advancements in technology that have made it easier than ever to create a bank — think plug-in players like TrueLayer and cloud banking platforms like Thought Machine — we can expect to see more niche banks in the future.

5. Making change happen is easier than you think

Our panellists offered some invaluable advice for businesses looking to do better in all things inclusion:

  • Do your research: Realising that the gender gap within the pension category was largely related to the lifestyle fluctuations women experienced compared to their male counterparts, Samantha and her colleagues then considered which  tother sections of society might be suffering, for example, people with disabilities who might not be able to travel to and from a workplace. As a result, they mapped out  underserved groups that would likely be affected by elements such as lack of education, labour market inequalities and homeownership. Be bold and keep asking why to identify your gaps and become more inclusive.
  • Think about education: Engage your audience much earlier than you think you need to. Through education, you can broaden your customer base. Money is one of those things that affects absolutely everyone but we aren’t formally taught what to do with it. Money habits are set between the age of 7 and 9 and currently that is purely learned behaviour from parents. Providing access to good financial education early will make a significant difference to financial outcomes in adulthood.
  • Know your audience: It is critical to know your audience. Any good design project is going to be looking at user research and building insight around their users, but what's key is that we uncover the challenges faced by the hard to reach. This can be challenging and you need to get creative, you can’t just use traditional companies that use standard data sets. You need to have a deep understanding of people's attitudes, motivations and pain points. Observe those hard to reach groups using your services as this can lead to epiphany moments in which you start to appreciate what the true challenges are and what you can do about them. This is how you can begin creating truly inclusive design.
  • Inclusion isn’t just a bolt-on: Bake inclusive thinking and design into what you do, do not just bolt it on to what you already offer. It may take time and investment however it presents a big opportunity as well as simply being the right thing to do.

Now is the time to take inclusion and accessibility seriously. So, if like us, you’re passionate about this and want to talk more about how to get started, please get in touch by dropping me a note at dulcie.omonubi@enginegroup.com.

This event was the second in our series; Serving the Underserved. Our next event takes place on 8th December, where we’ll be taking a closer look at Gen Z and how their money attitudes have the potential to cause seismic shifts in the financial services industry. To pre-register, send your name, company and contact details to creativeevents@enginegroup.com.