> Posted by Lara Storm and Nikhil Gehani, MIX
As financial services continue on the path to digitization, the amount of data available is expanding at a rapid pace. While gaps remain – most notably when it comes to quality and usage – the financial inclusion community has made significant progress in collecting timely, reliable and useful data. Yet no matter how much the flow of data improves, a key challenge persists: We are data rich and information poor. The late Hans Rosling left us with the simple truth that, “Having the data is not enough.”
The growing libraries of data make it difficult to separate the signal from the noise; actionable intelligence is sometimes obscured by the volume of available data points. The rapid uptake of digital financial services in low- and middle-income countries has contributed to the expansion of available data and shows no signs of slowing. The challenge presented to policy makers, financial service providers (FSPs) and funders is to derive insights that can inform decisions related to financial inclusion – without being buried in the avalanche of data.
By asking thoughtful, probing questions it is possible to dig out information that leads to concrete action. For FSPs, there is the obvious question of which districts to prioritize for expansion based on market opportunities. But taking that one step further, a follow-on question could be which districts would be better markets to offer a wide range of financial products compared to districts that might only require basic services. While policy makers might ask questions about which provinces have low numbers of financial access points per capita, they could probe further to determine regional variations in market penetration across different types of financial institutions. Asking the right questions is a challenge in and of itself, but it is necessary if we are to make the most of the data available. This approach, however, is most relevant to those overseeing organizational strategy – managers or directors – whose time is better spent on tasks other than data analysis and insight generation.
With this in mind, MIX’s Financial Inclusion team set out to provide actionable intelligence for policy makers, regulators, FSPs and funders across 25 markets. Market Insights provides key findings from broad geospatial datasets that cover both supply- and demand-side data. The visualizations answer specific, targeted questions intended to identify market opportunities by user type, making it possible for decision makers to skip the analysis and move right to action. For example, Market Insights for Ghana identifies the key regions in the country that could be targeted by mobile money agents to drive financial inclusion, based on data related to access point concentration and institution type. Similarly, FSPs in Peru can use Market Insights to see which departments with low supply/demand ratios currently served by state banks might be good targets for other institutions. Policy makers, FSPs and funders can use these quick views to identify areas for further research or exploration using their proprietary data and on-the-ground staff.
The strategic use of the information available today allows FSPs to find gaps in their operating markets, balance their risk and understand the competitive landscape. For policy makers and regulators, demand indicators can be used to highlight population segments that are excluded and easily identify gaps in financial inclusion. Meanwhile, funders and investors can support, facilitate and improve market function by examining aspects like financial literacy and account utilization. Although the data available in financial inclusion can be overwhelming and often requires significant resources to analyze, transforming those numbers into actionable intelligence will enable industry actors to focus on the key task at hand: ensuring everyone has access to appropriate financial services to improve their lives.
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