Operationalizing Ethnographic Research to Grow Trust in Digital Financial Services

Abstract

Trust motivates people's uptake and use of digital financial services (DFS). Understanding the socio‐cultural determinants of DFS trust are needed to scale financial access and drive financial inclusion. These are core components of international development strategies, such as the Sustainable Development Goals (SDGs) or Universal Financial Access (UFA2020). The IFC‐Mastercard Foundation Partnership for Financial Inclusion (the Partnership) conducted ethnographic research to understand factors that impact people's attitudes and perceptions of DFS. Nine months of field work each in Cameroon, DRC, Senegal and Zambia were conducted, in collaboration with local research institutes’ Anthropology departments and the African Studies Center at the University of Leiden. The results of the ethnographic research produced a framework for understanding drivers and barriers to people growing trust in digital financial services.This paper analyzes the quantitative and qualitative application of the framework for understanding digital financial services perceptions and uptake propensities for a specific market segment: micro, small to medium‐sized enterprises (MSMEs). The framework guided the design of focus groups and survey instruments, whose data provide a classification of issues business owners face for adopting DFS and the degree to which the socio‐cultural determinants of these issues may drive or hinder DFS adoption. Further, the survey data provide ground‐truth observations that are applied to transactional big data sets toward the development of a model to identify business from individual customers. Identifying MSMEs enables providers to deliver business‐specific DFS services at scale and further enable financial inclusion.It was found that MSMEs could be successfully identified using the big data analytics model, and that the classification of small‐medium (and micro) segments could be further identified by application of the survey data. Using the framework throughout all stages of the analysis further demonstrates the business value that can be obtained by employing the ethnographic approach. Doing so ensured that salient DFS issues relevant to business owners were inherent in survey questions ex‐ante, thereby yielding meaningful results that can be used to engage MSMEs, design relevant products and advance financial inclusion.