While most businesses want to use data to serve their customers better, they don’t always know where and how to get started. They understand the promise of data: data-driven risk management means lower prices for the customer and better margins for the provider. Processes that produce data can increase transparency for the customer and support efficiency. Partnerships between organizations have a better chance of succeeding if they are built on a solid base of external and internal data. And data on customers can be used to inform market segmentation and design products relevant to people’s lives.
For all of these benefits, some financial service providers (FSPs) believe that it’s too expensive to use data — worrying that this will require expensive IT systems and new staff. However, the business case shows that FSPs cannot afford not to use data — especially those that work with low-income customers.
The Data Management and Analytics Capabilities (DMAC) program aimed to address this important need head-on by building the capacity of FSPs in sub-Saharan Africa so they can use data more effectively. DMAC worked closely with seven partner institutions to enhance their capabilities to manage and analyze data, develop and innovate new business models, and design inclusive and affordable financial products and services that meet the needs of unserved and underserved adults. Through this project, the DMAC team helped fintechs, banks, and insurance providers develop new or enhanced products — including four digital microinsurance products and three savings products — that aim to reach over 1.2 million clients at scale.
To share what we learned with providers around the globe, the team developed a toolkit, Unleashing the power of data to transform your business. This guide will help FSPs understand the different data sources available to them and how they can use this information to serve their clients better, improve their business, and potentially reach new markets. It will also be useful for organizations that work with FSPs and want these institutions to make more and better use of data.
The toolkit has three parts:
- The case for using data: The guide explores the business case for using data. It explains how a provider can ensure that their organization has the requirements in place to effectively use data to improve product design and service delivery. This includes a useful data readiness checklist to assess your organization’s capacity.
- Data-driven product design and delivery: Product development serves as a use case for how data can be integrated into one area of a business. The second section of the toolkit takes users through each step of the product development cycle, highlighting where they can use data to enhance product development. We’ve included resources to support this process, including a template to help FSPs set key performance indicators and tools that can be used for monitoring product performance.
- Data management and partnerships for better data analytics: In the final section, the toolkit explores broader data management and how data analytics can help move an organization. It also discusses the possibilities and pitfalls of working in partnership with others to move towards greater data-centricity.
The toolkit includes many practical examples of how we worked with our DMAC partners within their respective country contexts and the lessons learned. We also included many of the easy-to-use tools we used throughout the program. As users will be at different stages in their data journey and have various needs, readers should focus on the areas where they need to build capacity or have limited understanding.
After exploring this toolkit, your organization should have the information and tools needed to understand how to use data well, and even how to make an internal case for data-driven changes. Accion’s Global Advisory Solutions knows that data has an essential role in making digital financial services more accessible and useful for people around the world. We work with providers globally to enhance their data capabilities in all aspects of their business to enable them to reach the 3 billion people that are still underserved by the financial sector. We hope this toolkit proves useful and would welcome any feedback you have on the toolkit and your experience of using it.
DMAC was designed by Financial Sector Deepening Africa (FSDA) and the International Development Research Centre (IDRC) in partnership with FSDT and FSDZ and was implemented in Sierra Leone, Tanzania, and Zambia by Oxford Policy Management (OPM), in collaboration with Accion Global Advisory Solutions and Master Data Management Ltd (MDM).