MicroSave Briefing Note # 40: Lessons from MicroSave’s Action Research Programme (2004)

Publication Date: 2005
Published by: MicroSave

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What lessons can partners learn from MicroSave’s Action Research Programs?

This note documents lessons learned during MicroSave’s Action Research Program during 2004 about the following MicroSave tools:

• Process mapping:
  • Generates high returns in the form of streamlined processes and improved risk management;
  • Is powerful at reducing risk, when combined with institutionalizing operational risk management.
• Risk management:
  • Is central to banking in the future;
  • Is challenging when managers of operational risk fail to understand risk management.
• Customer service:
  • Needs a customer service strategy, an action plan and a range of customer-centric performance measures.
• Branch-based costing:
  • Influences future strategy and informs long-term decisions;
  • Provides the basis for the development of branch-based staff-incentive schemes.
• Pricing:
  • Requires a three-step process of assessing cost, examining the prices charged by the competition and examining whether customer perceptions of the product justify premium pricing;
  • Should be transparently communicated.
• Pilot-testing loans:
  • Even “safe” products carry product development risk.

The note recommends that:

• Institutions optimize their banking information systems;
• Systems capacity be considered significantly ahead of need;
• Institutions moving into electronic banking give thought to key behavioural assumptions;
• Financial education focus on integrating electronic banking into the lives of low-income customers.

The note concludes by stressing the importance of competitive markets, institutional culture and heritage, institutional change and strengthening marketing.