Customer-centric innovation in finance: An AC Finance event

Today’s finance industry generally agrees that data-driven decisions make for good business and great design. But what decisions are and aren’t we able to make from quantitative data alone? When must qualitative data step in? After all, qualitative data is also data!

Qualitative data can assist us in developing new products and services that are relevant to people’s everyday lives. It is crucial to incorporate both research and everyday customer interactions and experiences in how we design sustainable and even transformative businesses.

On Wednesday, 8 May the Apply Club Finance held an event to discuss these issues, moderated by Helena Linde Pedersen (you can watch the video on YouTube). We began by launching Customer-Centric Innovation in Finance (Kogan Page, 2024), a new book by Erin Taylor and Anette Broløs. As Anette described the book: 

“It 's not just about how you create specific financial products for people, but it's about how people experience changes in their financial world, and how we can design better for that context.”

Then, a panel of speakers from the finance and fintech industries discussed the role of data - quantitative and qualitative - in ensuring innovation in finance. The panelists were Gunjan Singh (Adyen), Matthew J. Hill (Matthew J. Hill Consulting) and Marshall Knudson (JP Morgan Chase).

We had a lively discussion that delved into the following key points:

Innovation from the customer’s perspective

Marshall Knudson pointed out that many professionals in innovation are not customer-centric, but rather focus on the competition, regulatory environments or technology. He noted that customers want innovations that are:

“just new enough so as to generate value and interest, but not too new so as to be unassimilable into people's current ways of life, in which they're imbricated in their families, their communities, and so on.”

Matthew Hill reminded us that customers are not just individual end-users, but also businesses that integrate third-party apps into their own digital transformation. Sometimes these businesses struggle to build a clear roadmap for digital transformation that meets their customers’ needs and preferences. Thus customer-centricity also requires getting organizational strategy and processes right.

The importance of qualitative data in innovation

When people think of data, they often think of numbers. But qualitative data is also data, and it provides meaning and context to understand people's financial behaviors. Qualitative methods help uncover blind spots and capture the complexity of people's financial lives. 

As Gunjan Singh put it, “we are not our users”, and so we can’t assume that what works for a bank’s or fintech’s employees will also work for their customers. We need to talk with people directly and understand their complex financial lives. In Marshall’s words, “we need qualitative work in order to critically provide meaning to the numbers.”

Organizing for innovation: Communicating insights and getting buy-in

Marshall pointed out that organizations run a “big operational risk” if they don’t understand the value of research. Another issue that can cause problems is siloing: if different teams are working independently on products and not communicating, they lose opportunities to share research insights and develop joint projects.  

Gunjan added that she has encountered cases where leaders don't trust the data, especially if it's counterintuitive. They may also be unwilling to accept research findings if they suggest that a new product will fail. 

In order to get leaders on board, we need to be data storytellers. Communicating about research is just as important as doing research. As Marshall put it:

“No data speaks for itself. And so even the most rigorous and compelling studies will have no effect on innovation if they aren't communicated in ways that are intelligible and persuasive to executives and other stakeholders.”

One way of getting buy-in is to present insights using multiple types of data. As Helena noted, “numbers need stories, and vice versa”, as leaders are more likely to trust data if they can see it is triangulated.

Looking forward

The event ended with a broader discussion of how digital change affects human interaction and financial services as well as research methodologies. We hope to return to this in a later event. 

The AC Finance club runs regular events on all kinds of finance-related topics. If you’d like to join, you can let us know via the club’s Google form.