PROJECT

Transforming Credit Access: A User-Centric Approach in Financial Services

DESIGNER

Hugo Garduño
Product Designer who enjoys relaxing outside his world and thinking about how there is nothing new under the sun.

OVERVIEW

This fintech is a company that specializes in providing online lending solutions. Their platform includes a BNPL (Buy Now, Pay Later) model, mainly targeting people who don’t have access to traditional banking services. By using digital technology, they aim to make financial services more inclusive and accessible, helping underserved individuals manage their financial needs with ease.

DISCOVERY PHASE

Context

The company identified challenges in its existing Credit Line Increase Policy (CLIP) program in their BNPL model, including lack of transparency, usability issues, and limited user understanding. These issues reduced user engagement and satisfaction, which impacted the company’s long-term growth and customer retention.

Discovery

But how do we know this?

The CLIP initiative is being launched based on the findings of a survey that wanted to identify the main reasons to be the primary payment method (PPM) at checkout.

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The key findings:

A higher credit limit is the main driver for customers to use a card as their "first payment option.
Benefits such as interest-free installments (MSI) are especially important in lower-income segments
Competition: Nu has the largest Primary Payment Method (PPM) share among customers, particularly in higher-income segments.
Relationship between primary payment method (PPM) and being the first Credit Card/Credit to be paid: Being the PPM increases the chances of being paid by 35%. This is a significant motivator for users.

This key findings include the importance of higher credit limits for being the primary payment method (PPM) and being the first Credit Card/Credit to be paid.

Additionally, customer feedback from the NPS Report shows a clear demand for higher credit limits through CLIP and the option to pay in installments (MSI). These insights are key to improving customer satisfaction and engagement.

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PROBLEM

Setting the problem

Next, we use "How Might We" (HMW) questions to frame problems in a way that encourages creative thinking and solution-oriented approaches. By asking "how might we," we create a sense of optimism and collaboration, which promotes innovation and drives the team to come up with a variety of solutions.

The goal was identified as improving user engagement and satisfaction with the CLIP experience to drive long-term growth and loyalty. This involves resolving technical and design issues while meeting user needs and expectations.

“How might we improve user engagement and satisfaction with the CLIP (Credit Line Increase Policy) experience to drive long-term growth and loyalty within our customer base?”

Definition of metrics:

To measure the success of the CLIP feature implementation, several metrics have been established based on the Key Results (KRs) and detractor reasons provided.

CLIP Adoption Rate: This metric shows the percentage of eligible users who have activated and used the CLIP feature at least once. The goal is to reach a 70% adoption rate in the first quarter.
CLIP Utilization Rate: This measures how much of the available CLIP limit users are using. The target is to have at least 50% of the limit utilized by users.
CLIP Satisfaction Score: This evaluates how satisfied users are with the CLIP feature. The aim is to achieve an average satisfaction score of 4 out of 5.
CLIP Activation Time: This tracks how long it takes for users to activate CLIP after they are eligible. The goal is to reduce the average activation time to under 3 days.
CLIP Impact on Detractor Reasons: This measures the reduction in the number of users who complain about not having CLIP. The target is to reduce these complaints by 20% within six months.

These metrics will help measure the success of the CLIP feature and guide improvements in user satisfaction and engagement.

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IDEAS

Ideation workshop

Next, we conduct the brainstorming session, we first assembled a multidisciplinary team comprising members from the product, design, engineering, and customer service teams. Then, we facilitated a structured session where all participants could contribute ideas and solutions to address the identified problem.

Key outcomes:

Implementation of a CLIP "Heat" Meter: It was decided to develop a visual meter within the app indicating users' likelihood of receiving a credit increase at the next review. This feature would provide transparency and motivation to improve financial behavior.
Creation of a CLIP Educational Section: It was agreed to develop a dedicated section in the app explaining the CLIP program in detail, including eligibility criteria and steps to obtain a credit increase. This would help users better understand the process and increase their engagement.
Integration of CLIP Rewards: It was proposed to offer rewards and additional benefits to users who achieved milestones in their participation in the CLIP program, such as interest rate discounts or financial incentives. This would incentivize participation and foster customer loyalty.

These solutions were identified as the most impactful and feasible for improving the CLIP experience. The ideation workshop enabled the team to generate creative ideas and select those best suited to addressing the challenges.

MVP:

CLIP on First Purchase: Users receive an immediate credit line increase (e.g., 20%) after their first purchase, giving them a tangible experience of CLIP.
Barometer for CLIP Eligibility: A visual scale shows users their likelihood of receiving a future CLIP, motivating better financial behavior.
CLIP Surprise: After a set number of CLIPs (e.g., 3, 6, or 10), users receive surprise bonuses such as discounts, upgraded status, or perks like installment plans (MSI).
Dedicated CLIP Section: A section within the app explains the CLIP program in detail, guiding users through each stage of the process.

These features aim to provide immediate value, clear understanding, and motivation for users to engage with the CLIP program and achieve their financial goals.

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TESTING

Usability testing

To assess the usability and user experience of the new CLIP feature in the mobile app, we conducted a moderated user testing session with 10 participants representing our target audience, including regular credit users and those interested in increasing their credit line.

Methodology:
Participants performed specific tasks related to the CLIP feature while thinking aloud, and their actions and comments were recorded for analysis.

Key Findings:

Discovery Issues: Participants had difficulty finding the CLIP feature, suggesting it needs better placement or highlighting.
Confusion about Requirements: Some users didn’t fully understand the eligibility criteria, indicating a need for clearer communication.
Process Complexity: The CLIP application process was seen as confusing by some, calling for simplification.
Visual Feedback: Users wanted immediate visual feedback, such as confirmation or progress tracking after applying for CLIP.
Information Enhancements: Participants requested more information about CLIP benefits, terms, interest rates, and its impact on credit history.

Recommended Actions:
1. Relocate and better highlight the CLIP feature for easier discovery.
2. Clearly communicate eligibility requirements in the user interface.
3. Simplify and streamline the CLIP application process.
4. Incorporate visual feedback to confirm application and track progress.
5. Provide transparent information on CLIP benefits, terms, and credit impact.

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THE SOLUTION

Desing solution

Our CLIP solution redesign focuses on user-centric enhancements, including improved visibility, streamlined processes, and personalized recommendations. With simplified navigation and transparent information, users can apply for credit line increases with ease. Real-time feedback and continuous improvement ensure a seamless user experience, driving engagement and satisfaction while supporting long-term growth.

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BUSINESS AND CUSTOMER IMPACT

Measure ︎︎︎ learn ︎︎︎ Iterate

Next steps:

Metrics Review: We will review the key metrics, including adoption rates, utilization rates, satisfaction scores, and detractor reasons, to evaluate the feature's performance.
Usage Data Analysis: We will analyze user behavior data to understand how customers interact with the CLIP feature and identify any patterns or opportunities for improvement.
Feedback Collection: User feedback will be gathered through surveys and direct interaction to capture qualitative insights into their experience with the feature.

Thanks

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