The next step in geospatial data for financial inclusion: Putting providers front and center

Abed Mutemi and Brian Loeb

FSP map.

FSP map.

Precise geospatial data is available to, and used by, mainstream financial providers in developed economies. These institutions incorporate an understanding of where things are into the decisions they make every day: choosing new locations for branches and ATMs, designing and marketing products and services, engaging with clients, and complying with regulations.

We think geographic information system (GIS) data should be part of the suite of evidence for providers in developing economies, as well. A recent blog post at the Alliance for Financial Inclusion rightly celebrates the developments in some markets. But we think there is still lots of opportunity for financial providers to gain competitive advantages and capture new markets by using data — particularly geospatial data — better.

Thanks to three years of work by the Bill & Melinda Gates Foundation and its partners, providers (and other stakeholders) in some key developing economies do have access to a limited amount of geospatial data. Today, users of FSPMaps.com in Kenya, Tanzania, Uganda, Nigeria, and Bangladesh can use simple online tools to see, among other things, where each type of financial access point is concentrated, how many financial access points are in a given area, and how many people live within a certain distance of an access point.

Yet there are still three important barriers in these markets preventing providers from actually using geospatial data. The Foundation, together with Bankable Frontier Associates, hopes to address these barriers through a series of new pilot projects with providers, to be implemented in the coming months.

The first barrier that providers face is a lack of awareness of how GIS data can solve their problems — the use cases for GIS. Our recent conversations with providers revealed three main needs:

  • Discoverability: If you are new to the world of formal financial services, or if you are away from home, you need to know where the nearest financial access points are. Just as importantly, you need to know if those access points (branches, ATMs, bank, or mobile money agents) are open for business and if they provide the right kind of services (account opening, cash-in/cash-out, or transfers). Many providers struggle with providing this information to their current or potential clients. At a recent workshop in Kenya, many providers — from mobile operators to microfinance institutions — told us that over 25% of their call center’s workload is devoted to giving out directions. That could mean big savings for the providers if they could provide a mobile-responsive map or a USSD-based service.
  • Feasibility analyses: The current process for deciding where to locate a new access point typically begins with a request from a community leader or a group that feels its area is underserved. The provider then conducts a bespoke analysis of that location, incorporating on-site intelligence of economic activity, market research surveys, and information on infrastructure like electricity and mobile phone coverage. This bottom-up approach is costly, time-consuming, and it distracts providers from a coherent channel strategy. If providers had access to digitized, geo-located data on economic forecasts, for example, they could adopt a more top-down approach: setting some basic criteria for new markets, then digging deeper in select areas to assess viability.
  • Monitoring: Some providers are at or near the maximum number of viable access points — they aren’t looking to acquire many more agents. Instead, it’s important to these institutions that they maximize the value of the locations they do have. Unfortunately, information is scarce, especially when providers outsource agent management or delegate it to local supervisors. Few providers, at a central level, know which of their agents face liquidity shortfalls; whether or not supervisors are making their scheduled visits to agents; how frequently the network goes down in a given area; or which areas generate which kinds of consumer complaints. Providers could use GIS data to give more meaningful key performance indicators to their regional-level managers, and to give those managers operational tools like daily route plans that reduce the number of trips to the bank between agent visits.

The second barrier is that getting the data is difficult. For each round of FSPMaps data collection, the Foundation’s partner BrandWorx employs local enumerators to conduct a national census of access point locations and some basic attributes: teams travel the country by motorcycle, identify latitudes and longitudes using a mobile phone app, and conduct in-person surveys with branch managers and agents where possible. For most of the countries, FSPMaps now has two rounds of data, but those rounds are one or two years apart. Some providers record the locations of their access points upon onboarding, using mobile phones, but not on a regular basis. These approaches aren’t good enough for the use cases we’ve identified. To satisfy these and other use cases, providers need a data collection tool that is inexpensive, accurate, allows for frequent collection, and integrates seamlessly into their existing processes.

Further, many ostensibly public data sets lie beyond the reach of providers. Statistics on everything from power grids to building permit applications are dispersed among government agencies, and they are often not even digitized, much less in GIS format. Government hesitancy to share data, or to provide value-added services to agencies’ core functions, exacerbates this challenge.

The third barrier that providers face is a clear business case for investing in GIS. We don’t think collecting and using GIS data is principally a technical challenge; international experts can supplement local service providers to deliver one-off GIS solutions or build long-term capacity within providers. But there is clearly some cost involved in changing staff duties and expectations, and in deploying and sustaining technical solutions. Unfortunately, we have yet to see a publicly available return-on-investment analysis of integrating GIS into the day-to-day business of a financial services provider in a developing economy. (Some providers have at least explained their analysis privately.) When a bank’s channel manager makes the pitch for GIS to her board, we want her to be equipped with a persuasive case.

The Foundation recently identified providers to test solutions to these three barriers. We want to test web and mobile apps for data collection, build discoverability platforms, and develop processes for analyzing GIS data together with proprietary and public data sources that address providers’ particular pain points.

We understand that our work on GIS doesn’t take place in a vacuum: The health, education, disaster response, and agriculture fields have led the way in translating location data into action. So we want to learn from other GIS practitioners. What other problems could GIS solve for financial providers? What tools exist for data collection and visualization, especially those that are open-source and/or off-the-shelf? And what evidence do you have that GIS reduces the cost of identifying and capitalizing on new markets, particularly with poor consumers?

The Foundation looks forward to sharing the results of the pilot projects. We are just beginning to investigate providers’ use cases, and, in parallel, will be testing data collection mechanisms over the next few months. Please look for follow-up posts and other knowledge products before the end of the year. The real impact of the pilots will be realized when other providers in other markets can make their own informed decisions about the value of GIS data.

ABOUT THE AUTHOR
This is a guest blog from Abed Mutemi, who works on the Financial Services for the Poor team at the Bill & Melinda Gates Foundation, and Brian Loeb, who works on the policy team at Bankable Frontier Associates.

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