Last week, I was invited to join a 60 strong group of pan African thinkers in law, human rights, gender, debt and related issues to convene in Nairobi to explore the concept of predatory lending now being delivered direct to your handheld device. As a human centered designer, I was rocked back on my heels to discover the human rights related impacts and consequences of what might be thought of as a simple mobile app design.
Yet, designers are rarely, if ever, introduced to the concept of human rights and how to design responsibly with awareness of the outcomes and inadvertent impact on the target audience.
The earliest stages of the design process – also known as the fuzzy front end of innovation – are where the maximum control can be made to bear on the final outcome, including its cost of deployment. As fintech designers, do we know how the safeguards and filters we’re building into the digital service make the end user feel?
Without going into too much detail about predatory lending to the lower income aka base of the pyramid, I would just like to say that in my opinion, there is also a systemic design flaw that lowers the bar to failure.
I have named this flaw the Systems Monster, and he squats there between our best intentions and highest hopes for the greatest good, and the actual outcome of our actions and strategies. How often have we heard “It is the system” when we have struggled to make our good intentions manifest themselves in the real world to benefit the unemployed, or the underprivileged?
The system is set up for the convenience of the banking and financial industry, and tend to be designed on calender time schedules – a holdover from an era when everyone had regular wages arrive in a predictable periodic cycle. Fully four fifths of Africa’s working population is informally employed, whether by the formal sector or within the informal economy. They manage their household finances on irregular income streams and unpredictable cash flows. The only thing that distinguishes the subsegments of the population is the accuracy of their ability to predict the amount and the timing of their next influx of cash/money.
Yet, the system, that is the processes and structures of the formal financial institutions such as banks, is designed around the predictable – the regular amount of salary that shows up every week or month, and the stable – this paycheck is from one source, an established and known employer such as a big company or the government. This predictability and stability allows the bank to take the risk of issuing loans and mortgages for short terms and longer durations, secure in the knowledge that the amount will be repaid on a regular, predictable, calender cycle – 500e every month plus interest for the next 15 years.
The inherent conflict between the flexibility and negotiability required to minimize the volatility between incoming and outgoing cash flows, and the predictability and regularity required by the financial institutions means that the system is set up to make you fail. You are bound to miss a payment at some point and you are penalized for being unable to negotiate with a faceless digital app.
What is the responsibility of the fintech service’s designers? To perpetuate the financial exclusion barriers within their novel design or to seek to adapt their user interface to the needs of their target audience?