Financial Inclusion Data in 2016: AFI Members Continue to Make Progress with Geospatial Data
By: Lara Storm, Director of Financial Inclusion
The 2016 AFI Global Policy Forum was an impressive feat of logistical efforts with an attendee list that included over 500 individuals from over 80 countries around the globe. The premier conference for financial inclusion encompassed topics ranging from the gender gap in financial access to the regulatory approach for mobile money to the growth of green finance. The conversations were rich and engaging, with attendees including central bank and regulatory officials, private sector service providers and development agencies and market facilitators. For our part, we were glad to hear that nearly all of the conversations included considerations for using data to make better decisions and craft more effective policies.
As a contributor to the Financial Inclusion Data Working Group (FIDWG), I led a session focused specifically on the use of geospatial data for informing policy and monitoring progress towards financial inclusion targets. FIDWG recently surveyed its members to determine how different countries are either using geospatial data or considering using geospatial data. What became clear through the survey results and subsequent discussions is that countries vary greatly in terms of their progress on using geospatial data. While the value and importance of geospatial data is clear, there are still questions around implementation that need to be considered before central banks can begin utilizing location-specific information for planning and monitoring. Below are a few key themes that have emerged:
Central banks and banking supervisory authorities first need to know exactly how to get the ball rolling. Creating the systems to collect and disseminate geospatial data is a complex process and requires a significant investment in terms of technology and server capacity, technical knowledge, and human capital. Therefore, starting with a small team pilot may be an approach to consider before increasing the scope once the value has been established.
A common question I heard was around data sourcing. How can regulators rely on financial service providers (FSPs) to report location-specific data? Again, there are two options to consider: mandatory or voluntary reporting. Some countries mandate this data be reported on a regular basis, while others allow for voluntary reporting. Another option is a hybrid approach. In this case, large banks and financial institutions must report this data, as they have the necessary resources, technology and systems. For rural regional banks and savings and credit cooperatives that often lack the required resources, regulatory authorities send out enumerators to manually collect this data.
Another key decision is whether to use licensed software or open-source software to manage and visualize [map] data. With limited resources, it is only natural to immediately lean toward open-source software. However, while the software is free, there are other costs to consider, including the technical knowledge needed by employees as well as software bugs that inevitably pop-up and must be dealt with. Licensed software, on the other hand, usually has a significant cost but also comes with customer support and regular maintenance. Either way, it is important to consider both options.
While there are additional questions around data privacy, transaction flows and aggregate versus GPS-coordinate data, we are excited to see how much progress has been made since we met with FIDWG for the first time in early 2014. As the conversation now shifts to implementation, MIX continues to support central banks and regulators in their efforts to collect and utilize geospatial data. In this regard, we are currently working with AFI’s FIDWG on a guidance document that will provide regulators with a ‘toolkit’ for navigating many of the key decisions required. We hope that this will encourage the use of location data to better identify opportunities for increasing financial inclusion across the globe.
Lara Storm is MIX's Director of Financial Inclusion. She leads a team of expert data wranglers to produce data visualization products and analysis that will support decision making to increase financial access across the developing world. You can contact her at firstname.lastname@example.org.