Are you unleashing the full potential of your data?
In today’s digital age, everyone knows we’re creating more data than ever before, but not everyone knows what to do with that data — including financial service providers (FSPs). With improved connectivity and increasing smartphone penetration, formerly anonymous and unserved market segments now have valuable ‘digital data’ identities. For customers, this data can lead to more relevant, affordable products that better address their needs, and for financial institutions, when used responsibly, it opens access to new market segments and can be used to deepen customer engagement. However, too many institutions lose out on this win-win opportunity due to information overload, inefficient processes, and legacy systems.
To address this data divide, Accion in partnership with Oxford Policy Management and Master Data Management (MDM), is implementing a new data-driven approach to product development through the Data Management and Analytics Capabilities (DMAC) project. Initiated by Financial Sector Deepening (FSD Africa) and International Development Research Center (IDRC), DMAC is a two-year program that uses data-driven evidence to help FSPs in sub-Saharan Africa to design inclusive and affordable products and services that respond to the needs of unserved and underserved adults, with a particular focus on women and youth. In this project, we are working closely with partner institutions to enhance their capabilities to manage and analyze data, develop and innovate new business models and reflect and share the lessons about what they have found works and what doesn’t. The program is operating across three different markets of varying digital maturity — Sierra Leone, Zambia, and Tanzania — and with three different types of FSPs: insurers, fintechs, and commercial banks.
What makes the DMAC approach unique is being intentional — thinking about and taking deliberate actions — when using data in the product development process. Particularly as ‘big data’ is touted as a winning strategy for financial service providers, many institutions often collect data for data’s sake without a clear plan of why and how they intend to use it. Yet there are several publicly available external data sets like the Global Findex, census data, and telecom data which can provide important market insights to inform product design. For example, census data coupled with hospital incidence rates can provide insurers with a much more sophisticated and accurate picture of risk.
