Mobile App Development Case Study for the Biggest Microloan Organization with a 14B USD Loan Portfolio
About the client & the story behind them
Moneyveo is the biggest microcredit company in Ukraine. They are the main hero of today’s story — the client. Let’s take a closer look at them.
As stated above, Moneyveo is the absolute champion in the MFI\microcredit business in Ukraine. They are completely digital and online; there are no physical branches in Ukraine. But there are a lot of happy clients and loyal employees. The numbers will say it all:
- 44 million dollars — the amount of net income Moneyveo received during the first half of 2021 (the most among competitors)
- 1.4 million dollars in net profit
- More than 700 employees
- 1.8 Ukrainians regularly use their services
- 6 million loans issued in the service
- 1 billion dollars issued in total
It is a large, modern, and properly organized company. This allowed them to think about diversification and new directions of development.
Why did the client decide to develop the solution?
Moneyveo’s business model was really effective. In fact, it was one of the fastest-growing on the market. But over time, the pace of growth slowed down, and by August/September 2021, Moneyveo realized that they had hit a glass ceiling. The volume of the market that they had didn’t allow for further expansion. The target audience had exhausted itself. It was no longer possible to grow at such rates as they grew before.
The time had come to look for new solutions. It might be a new business model or differentiation options that would give the business a new push for growth. They weren’t certain at the moment about the direction they were going to move. But they knew for sure that they had to act.
The obvious decision for the client was to move further into fintech, a promising field in which they already had considerable experience. Their goal was namely to create a neobank that would touch a target audience that was opposite to the one they had at the time. These are customers with medium and high incomes. They also were interested in credit products, like the main target audience of Moneyveo, but on completely different terms.
The client set himself the task of expanding his business, diversifying his product portfolio, and entering a new market.
Pros and cons of current solution
Moneyveo’s main products were loans. It was the main pro of the solution that brought it a big success. But over time, it exhausted itself and didn’t allow for further scaling of the business and the target audience. And thus, it went from being a pro to a con.
The cost of attracting clients was higher than the commission income from one client. And overall, the country’s population was decreasing. The target audience was running out and there were no signs of an influx of new people into the market. There was no one to work with for new clients further.
Moneyveo is a fully profitable company without creditors, credits, or obligations. It meant that they had a sufficiently powerful resource to experiment, invest in new niches and try to enter new markets. And they decided to stop at neobank.
Users behavior and new trends
Neobank has been the main fintech trend since 2016. The business model and product are clear, and the client understands what it is and how to use it. The cost of attracting a customer is not too high, and the business model calculation is usually very accurate. Especially in Moneyveo ‘s case, as they had a lot of data: how much it would cost to acquire a user, how long they would stay, how much revenue the product would generate, etc.
For the end client, it is a clear, obvious, and expected product, which is why Moneyveo’s team chose neobank and not some other financial product.
The neobank market in Ukraine was very competitive at the time (as it is now). But let’s look at the landscape of 2021, when the project was at its very start.
We had an absolute neobank leader in Ukraine — Monobank. At the time, they had 4 million customers (25% of the market). PrivatBank is a classic player, but they also had their digital solution and had 4 to 6 million customers according to various estimates. There also were products with much smaller volumes: Neobank from Concordbank, Sportbank, Todobank, Izibank, Sense Bank, and Alfa Bank.
Competition in the market was very high. And the market was divided by business models. Some projects were based on lendings and installments (and Moneyveo was among them). They knew their target audience as well as their target audience knew them. Other players were projects with mixed business models such as PrivatBank or AlfaBank. Keeping this image in mind, we understood that in order to enter the market, it was necessary to find a sophisticated solution. On the one hand, it had to be logical, on the other hand, it had to be truly necessary for the user.
Another important point is that the Ukrainian banking market was definitely driven by loans. This was the most obvious and understandable business model — free issuing of a bank card and free issuing of a credit limit with a grace period. This is how it works: you provide a credit limit, and when a person leaves the grace period, they start consistently paying interest for using the credit limit. This results in consistent income from the client to the bank.
Moneyveo had a large credit system and an understanding of how it all worked. They made a key bet on large credit limits with a long grace period as the main competitive advantage, and it has borne fruit. But in order to maintain the growth rates of the company, they had to start looking for new directions of development.
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How did they come up with the idea?
Our cooperation with Moneyveo started long before this project. We’ve been working with them since 2017 by providing different consultations on the implementation of mobile applications, improving the performance of their mobile applications, implementing design solutions, and more.
The Board of Directors had approved the idea of creating a neobank as a way of diversifying business in August 2021. Right after that, the Moneyveo team contacted us as they knew that we were one of the leaders in neobank development in Ukraine. At first, they requested a series of consultations. At this stage, we conducted a market survey and user profiling for them. This allowed us to take a more focused look at the market opportunities, possibilities for Moneyveo in that market, and, of course, Ukrainian users. The survey helped us to better understand their problems, values, motivations, how the competitors’ products satisfied all these areas, and what can we do to find and occupy our own niche.
The plan was to first conduct a series of consultations, and if they proved we share the same values, worldview, and level of competence, and saw one common goal in this project, we would move forward to the next stage, which the discovery stage. This part includes market research, research of customers and competitors, and the development of a future digital product based on the unique value proposition. Other tasks of this stage include:
- making a high-fidelity black-white prototype
- testing prototypes on the target audience in order to make sure we are making the most accurate, understandable, and usable interface for the client, before the development stage
- creating a technical task based on it, which will include the technical and functional parts for the creation of the product
After the discovery stage, the UI and development stage starts.
Customer thoughts and references
A CPO, a CBDO, and two project managers — representatives of Moneyveo who walked with us all the way, side by side. They had extensive banking expertise and a a strong background in banking, with a deep understanding of the banking market, methodology of the products, and an understanding of the correct formation of certain bank operations and transactions.
What they also had was a vision and a broad understanding of what the new product should be. They needed our expertise to sharpen the blurred vision and combine it with their thoughts and desires and the results of our research. As a result, we had a clear understanding of what the product should be, its user interface, and a mobile application.
The client was actively involved at all stages: whether it was the creation of a value proposition, some discussion, or research — we always worked as one team.
Moneyveo’s team saw the competitiveness of the market as one of the biggest challenges in this project. We could not afford to enter the market with a mediocre product. A product that wouldn’t fully cover the needs of the user. It’s everything or nothing. The expectations of the end user are very high. The market has set a very high bar of competition.
How do we make the right first impression on our end user? All our client’s thoughts and all our work revolved around this question. We cannot create a second impression, and trying to change a bad first impression would be expensive.
How do we make such a great first impression that the client wants to stay with us? This was a key question for the client. It requires strength in many important areas: UX, functionality, product content, and the entire customer experience.
Moneyveo’s expectations were more than clear. Their goal was for their new neobank to become the #2 neobank in 3 years in Ukraine. We started our work in August 2021, so the plan was to become the #2 neobank in Ukraine in August 2024.
2.5-3 million active customers were expected, which would determine the product’s performance. The project was expected to profit within 2-2.5 years at most. The business model built by the client’s team confirmed that with the basic scenario that we pictured for ourselves, 2-2.5 years would be an adequate period for payback.
We planned to finish the active session of market research and discovery in 6 months, so the deadline was the middle of February 2022. Our team fully met this deadline. By that time, Moneyveo already had all the artifacts and materials that were agreed upon.
By August 2022, the product was expected to be released.
Ownership and living role in conducting discovery and building product value and the product functionality model — this was our service. As well as adaptation of all the artifacts that we got as a result of research to a mobile application by creating interfaces ad designs. At the other stages, our responsibilities would be completely leading the development of the mobile platform on both iOS and Android. And after that further work with the product and development of the product after the release.
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Research & preparation. Series of meetings with client
An important phase of the preparation for the project was to immerse in the client’s thoughts. To do so, we held 5-6 online meetings with the client to understand their technologies and business model better. It is very important for us to understand that we share the same picture with our clients: how we see competitors, how we evaluate the players and their competitive advantages, how we understand what drives the competition in the market, and how we should develop our product. It is crucial for further success to be on the same page with the client at the very beginning of the cooperation. As such, the final goal of all these consultations and preparatory talks was to develop a common vision of everything: from potential user profiles to product expectations.
What the clients’ team did at this stage:
- Commissioned an in-depth socio-demographic study of Ukrainian bank users in 2021, which gave us an understanding of the market.
This research allowed us to see a detailed list of the costs of Ukrainian bank users, to understand from which banks to which banks users transfer money, and why exactly they choose those banks. We spent 2 meetings discussing this research.
What we did at this stage:
- Prepared a trend canvas synchronization exercise. Before starting our cooperation with the Moneyveo team, we did a synchronization exercise that we do with all clients — we filled out the trend canvas in order to understand the banking market in Ukraine better, synchronize our values, mission, and drivers of the future project, determine the market context in which the future product should exist, and also generate the first ideas.
- Prepared a large study of competitors on the market. Used the Porter Diamond methodology. This allowed us to analyze the market for existing players as well as their strengths and weaknesses.
- Analyzed new players who are just entering the market, their market entry strategies, their expectations about the strengths and weaknesses of competitors, and about the target audience.
- Analyzed substitute products that could replace our product, and other services that users could start using instead of using neobanks.
- Analyzed the competitive forces that exist on the market now and that is driving the market further.
A series of these preparatory synchronizing meetings allowed us to develop a common vision of the current market situation, competitors, and market drivers. With this, we could start moving further to in-depth research. After we were immersed in the thoughts of the client, it was time to immerse in the thoughts of users.
Solution hypothesis and internal discussions
Meetings with the Moneyveo team gave us a better understanding of their technology, product, capabilities, vision, and passion. With our extensive experience working with Ukrainian non-banks and our understanding of the market, we realized that we can reach our final goal. We can create a product that is functional and necessary to the user, which would be based on the lending model, but we called it «advanced lending».
The Ukrainian banking market of 2021 was entirely credit oriented.
As of 2021, the Ukrainian market was entirely loan oriented. Users willingly took loans for everything from personal expenses and small household purchases to cars and businesses. Loans were part of the culture. It was normal, an everyday phenomenon that customers were well familiar with.
But offers that existed on the market didn’t satisfy users enough. They were unpersonalized and monolithic. We realized that we can play a competitive fight exactly on this weakness. Depending on their credit score, we can provide various users with flexible credit limits, or large limits with a long grace period. For example, a large credit limit of UAH 100,000 for 100 days was absolutely unique on the market. We would be able to acheive this quite easily due to Moneyveo’s extensive expertise in the credit business.
The ability to effectively work with credit scoring and possible risks was one of the strongest points of Moneyveo’s business model. These strengths allowed us to create a hypothesis of a flexible product credit engine, around which we could build a defining competitive advantage for the product.
Of course, this hypothesis had to be tested on the key target audience. But at this stage, we were already quite sure that it would become the basis of our proposal.
Proposal structure and final discussion with the client
Before our final handshake, we prepared the proposal for the client. Here’s what it looked like:
- It was assumed that we could build a highly competitive product that the user needed based on working with credit limits.
- We acknowledged that we had to enter the market with a highly functional product, talking about added functionality, as well as the list of functions and its usability. We aimed for absolute leadership in the field. We also understood that we had to release a product that the client would love at first sight. For that, we had to research the best practices of neobanking in Ukraine and the whole world, and then implement these practices in our product.
- We planned to conduct at least 100 in-depth interviews to identify those micro needs of users who are not satisfied with other products. The market is mature and competitive, and the competitors have professional teams that know their job. There were no obvious insights in the market, like some feature that would attract the audience of, for example, gamers, because no one else has it. All products on the market were functional, although they differed slightly in depth, in functionality, and in usability. But, as stated above, the market was at a stage where super-obvious deep insights weren’t easy to find. So we realized that the key to success could be working with micro needs: an additional tick or dot when transferring, shortening some flow by one click, and adding some functionality for small groups. Due to the closure of a large number of such micro needs, and due to usability, we would be able to create a highly competitive product,and thus, be remembered as a necessary and valuable product in the users’ eyes.
The client was completely satisfied with our proposal and strategy, and after our commercial proposal and deadline were accepted, we began our work.
The process of value creation
The process of value creation in this project consisted of a lot of stages. Let’s start with the first one:
Deep competitors research
We already had some info about the market and competitors, but it was time to go even deeper. We analyzed the competitors according to the following criteria:
- analysis of banking products, tariffs, commissions, cashback, and loyalty programs
- a separate comparison of credit products
- the speed of opening an account and the speed of issuing a card to start using
- analysis of the application functionality and its usability
- analysis of the user acquisition model, retention model, LTV model, and awareness model
- analysis of amount of app downloads, reviews, and other product metrics that we could get using Data.io
Thorough research on the target audience from open market sources, determining users’ needs, pains, motivations, and expectations regarding the future digital product
- Profiling users according to socio-demographic characteristics
- Describing specific customer jobs for each individual profile
- Determining which services currently close specific user jobs
- Analyzing user comments on PlayMarket, AppStore, Facebook, Twitter, and Instagram pages of competitors
- Analyzing the reasons for opening an additional account in another bank
- Study and description of criteria for choosing a new bank (rational and emotional)
- Creating custom hypotheses based on the information obtained above
- Preliminary prioritization of target groups
Conducting exactly 100 in-depth interviews to test, refute, or confirm user hypotheses
- Sorting user hypotheses
- Creating a survey script for in-depth interviews with respondents
- Forming the respondent base
- Choosing a reward for interviewers for conducting an in-depth interview
- Scripting and systematization of data, and development of an analytical note based on surveys
Ideation session, systematization of ideas that we received based on research and in-depth interviews
Through the entire process of interaction and research, some ideas were created by respondents and the team; ideas that came from analyzing all the available sources on the internet. And we collected each of these ideas right away.
We put them on the dashboard, and it already had more than 170 ideas even before the start of the ideation sessions. Our task was to consider each idea, decide if we want to place them in the product, and come up with more ideas if needed. Each idea went through the process of discussion, brainstorming, analysis, and understanding of its feasibility in the future product. This process reduced the final number of ideas to 25, which would be the basis of the product.
Creating a product’s value proposition and testing the value proposition on respondents
All the preparatory work was completed. The moment had come to carry out the most important exercise — creating a product’s value proposition.
As a basis, we took the Alexander Osterwalder framework. It is a strategic management tool to design, test, build, and manage products and services. Before the start of the workshop, our team completely filled the right side of the value proposition canvas, using the ideas we selected during the ideation session. The results of in-depth user interviews and competitor analysis were included here as well.
The workshop with the client’s team lasted 5 hours. During this time, we managed to generate enough ideas for services, pain relievers, and gain creators to say that the product’s value proposition was ready.
Creation of user stories based on the value proposition, formation of the product backlog
This stage included forming the product backlog based on VPC, sorting using the KANO model, and determining the volume of the first release, and after that, the approval of the first release by the client team.
Since the value proposition of the product was formed, we approved the list of services, functionality, pain relievers, and gain creators of our future neobank. The time had come to form a product backlog and move toward its detailed study.
This work took about 2 weeks. As a result, we received about 640 lines of the product backlog, which had to be sorted to understand its impact on the future product.
When performing such work, we at Devlight usually use the Kanno model, which allows us to analyze each functionality for its purpose in the future digital product:
- must-have functionality
- wow effect
After several conversations with the client’s team, we decided on the scope of the first release. It was based on the team’s budget and deadline expectations. Thus, we approved the scope of the first release of the product.
After that, we moved to write user stories and acceptance criteria for each element of the backlog. At Devlight, this type of work is typically done by a team of business analysts, project managers, and quality assurance engineers.
Here is the result of this stage of work:
All work on gathering all the requirements for the future digital product was done by that time, and the phase of active prototyping and usability testing began.
During the prototyping phase, we use the Figma environment, where we create high-fidelity black and white prototypes. It allows us to fully reproduce the user experience of the future digital product and the user’s interaction with it. Each element of the backlog is also worked on in detail by a team of product designers, project managers, and business analysts to create the best possible digital user experience.
At this stage, we usually receive 400-500 black-and-white screens. We combine them into an interactive clickable prototype, and later use them for usability tests with the target audience.
Before the start of the development, we use Maze to fully test the entire interface for user understanding of:
- customer flow
- interface buttons, actions, pop-ups
- general interface convenience
And thus, we get an understanding of how obvious and user-friendly our digital product will be. As a rule, usability testing gives us 3-4 iterations of changes. It allows us to be completely sure that the target audience will perceive our future digital product positively.
At this stage, the black-and-white prototype was agreed upon and approved by the client, and we moved forward to preparing for the engineering work, namely, designing the API methods using a UX-driven ADI design approach. For this, we use the Postman environment. The result of this work gives the entire team comprehensive information about which integrations should be carried out and which data points from the client side should be created for product functionality.
The API project serves as the basis for the entire product development cycle, which is why we at Devlight are extremely careful and meticulous about this stage.
Limitations and challenges
Problem we faced us during the process
The process of research, interaction, and discovery went quite smoothly, as the workflow was built right both from our side and from the side of the client. With a client who showed tolerance and patience, we kept a good work pace. This allowed us to complete the preparatory phase and the discovery phase without any problems.
Biggest challenge we met while creating the solution
Working with respondents was the biggest challenge for us, as it was the largest piece of work. We conducted the exact amount of 100 interviews, but after it was done, we still had work to do: we needed to transcribe them, systematize, and find insights.
Respondents had great motivation to be genuinely involved in the interviewing process as they were rewarded for it with a gift certificate. As respondents were happy to share as much of their thoughts and insights as possible, the interviews lasted a bit longer than we expected. Each interview lasted approximately 1.5 hours.
How we solved the problem
Our decision was to connect additional interviewers to complete the process on time. There were so many materials that we received after this phase that our whole team had to work for several weeks without days off to analyze them and find the insights they needed. But after weeks of hard work, we managed to meet our deadliness and get the results we needed from this stage.
Allow the professional team to evaluate how much your idea matches the market.
Results and Outcomes
Solution launch and going live
The deadline for discovery was February 20, 2022. On February 10, the entire process was completed, and the results of it were handed over to the client for approval.
We presented the results of the discovery to the Moneyveo team with pride. The management board of Moneyveo felt our excitement and was sure that this product had to be built and released. All doubts that existed before that disappeared. We saw the green light in front of us, and we were ready to move forward to the next stage.
Meanwhile, the branding agency was finalizing the work on the development of the name, visuals, key message, and color guideline for the product. We were waiting for the results of their work to start the UI design phase.
But then the war started.
Compliance with expectations
The entire process of interaction with the client was as productive and efficient as possible. We didn’t have any tension, except, maybe, during the interview conducting phase. Due to long inverviews with the respondents, we had to spend twice as much time as was expected. But we still managed to meet the deadline. A little (or not so little) overtime works wonders.
The management board was impressed by our presentation; they stated that the results exceeded their expectations and they recognize the overdelivery we’ve made. They also stated that they wanted to continue moving forward in this project with us.
We exceeded expectations the most at the prototyping stage. Two experienced designers worked on it, and every time we presented the result, the client was shocked by how well everything worked out.
Some market numbers, proofs, and results
- More than 100 interviews were conducted with users
- The total duration of the interviews was 120 hours
- 250 customer hypotheses were developed
- At the ideation session, we worked on more than 400 different ideas
- Less than 10% of them were chosen to be the basis of the product
- 660 screens for the prototype were developed
Market & users insights
The market was and still is very competitive, but we managed to find a unique competitive advantage and the niche for our successful work in the market. That was our most important and biggest insight.
After close work with the target audience, we clearly understood that despite there being a lot of different products in the market, clients were still ready to consider and try our future product. Flexible crediting and management of their own credit mechanism is what gave us users’ attention and interest.
What we’ve learned from this project?
- Satisfying a large number of users’ micro needs can become the driving force of a product.
- Customer interviews should be planned to take at least an hour, preferably for an hour and a half.
How our skills shaped after the case
We realized that customer interviews require more time. Customers genuinely wanted to share; they were involved in the process and wanted to be a part of the product creation.
That is why, when working on our next banking projects, we now invest more time in this phase.