DAVID LLOYD Taking a product that is successful in one sector and transplanting it to another does not constitute innovation
Financial services firm Liberty is using a form of agile innovation to develop new investment products for people outside the affluent and mass affluent categories who do not typically invest because investment products do not suit their lifestyles.
Comparing the investment milieu of South Africa with the international milieu, Liberty Innovate MD David Lloyd highlights that awareness levels in South Africa about investment are not materially lower and there are no standout factors causing problems, while local retirement legislation and stock market performance are supportive.
However, savings and investment products in South Africa are designed to cater for the affluent and mass affluent segments, and savings products offered to those outside these segments are not specifically designed for these market segments.
“The usual solution of taking a product that is successful in one sector and transplanting it to another does not work, and does not even constitute innovation, by definition,” he emphasises.
Having a thorough understanding of what clients want and expect, and their actions when using savings products, is the best way to drive adoption and, thereby, the likelihood of success of any new product, he adds.
Liberty is conducting a small-scale pilot to develop a savings product specifically designed for those outside the typical investor segments, which engages with clients through a smartphone application (app).
This fail-fast-and-iterate method of developing products is providing valuable insight into the design required for investment products targeting the “long tail” of the market, which includes the key market segments of Millennials and newly employed people, concludes Lloyd.