Data — The frustrating silver bullet to financial inclusion

I have been focused on the goal of financial inclusion for the better part of 5 years now. During this time DemystData has helped many leading financial institutions, across hundreds of millions of transactions, accept more customers for deposit and loan products, and we feel great about the impact we’re having. Small business and consumers, otherwise kept out, finally have access to the tools and capital they need.

However I’m frustrated. Frustrated that financial institutions are just scratching the surface. Frustrated that many emerging customers are kept out because of overly conservative regulatory frameworks and the perverse negative impact of well intentioned privacy constraints. Most of all frustrated that so many still focus in the wrong areas. There is hype around innovative credit scoring, big data, building bureaus, driving financial education and a lot lot more.

However ask any tier 1 institution and they will tell you the silver bullet is data. Data to verify, systematically, the same fundamentals that have been used for decades. Are you a real person. Is this business real. Is the person a fraud or sanction risk. Can this person afford a loan. Is this person telling the truth on the application. Is this person responsible. Is this person healthy and a good insurance risk. Does this person have collateral. Nothing has changed about what attributes make sense. Many would disagree, and cite how many contacts you have in your phone that start with a P, but all of that is just an overfit proxy for the fundamentals.

However A LOT has changed about the consumers of that data, driven by the market shifts. Customers demand a realtime decision. Regulators demand more fine grained control of data. Financial institutions demand fewer and stronger vendor partnerships that move at their increasing speed. Competition by disruptors is demanding no stone left unturned in the pursuit of the next customer.

The head of a retail bank once said to me “we have a project to unify our global customer data with [consulting firm name removed] which started as a 3 year project 5 years ago and now has about 5 years left”.

If it’s frustrating for me, imagine how it feels for the small business owner with growing income in Manila who can’t get a loan despite having 5x the loan in free cash flow.

No more talk. Financial institutions need a new way to access data to achieve the fundamentals, and the old model of going source by source, country by country, use case by use case is not achieving the mission of financial inclusion. This is why our strategy focuses on providing Libraries of the fundamental building blocks of assessing customers and SMEs, upon our Attribute Engine Platform, so our clients can get results from better data in 1 month, not 5 years.

Our clients are telling us an exciting story of explosive data availability, higher match rates, high quality information, improved acceptance and conversion decisions, and much more. Now is the time, with exploding data and improved data access technology, that we can make a step change impact on financial inclusion.

Demyst’s (achievable) goal for 2016 : Unlock 2m more customers by helping clients access silver bullets.

By Mark Hookey, Founder & CEO



Share on facebook
Share on twitter
Share on linkedin

More to explore

Close Menu