Last month HIP Consult’s CEO, Judah Levine, presented at Mondato Summit Asia, a digital finance and commerce thought leadership conference hosted by Mondato , in partnership with the Australian Embassy in Jakarta. A key takeaway from the presentation was that despite significant improvements in the availability and quality of broadband connectivity infrastructure in Indonesia and other parts of emerging Asia, there remain persistent gaps, particularly in poorer regions, hampering the expansion of financial services.
While it may not seem intuitive, connectivity is a critical pre-requisite for pursuing digital transformation of various industries, including the financial sector, Levine noted. This transformation, in turn, can prove essential for improving access to financial services for those traditional un/underserved, otherwise known as financial inclusion. Fortunately, over the past several years a confluence of infrastructure and service investments, technological advancements and accommodating regulation has resulted in meaningful progress for both the ICT and financial services sectors, yet much remains to be done.
According to the World Bank’s Global Findex, between 2014 and 2017, 515 million adults gained access to financial services, a 7 percent increase. There was also an 11 percent increase in the global number of people making or receiving digital payments. On the connectivity side, during the same time frame (2014-2017), global 3G coverage increased to 87% of the population, an increase of 1.1 billion people, according to GSMA’s 2018 State of Mobile Internet Connectivity Report. However, 1.7 billion adults are still financially excluded, and more than half of which either have no mobile coverage or coverage with no connection.
Data visualization and analytics is one approach to respond to the challenge of missing information in unserved or underserved areas. Measurement of existing access and inclusion, as well as connectivity levels, guides a foundational understanding of the current state. Then, analysis of critical enabling infrastructure can identify areas where connectivity is the main bottleneck to digital services adoption.
Recent initiatives to measure financial inclusion have collected data that yield interesting insights, particularly when the data is measured over multiple years, yet most data is only at the national level, with some subnational or even GPS level surveys. Where it is available, the latter allows for detailed coverage analysis and population proximity estimates. Responding to data gaps on the connectivity side, HIP Consult has funded and led a massive ICT data aggregation project through InfraNav, the world’s most comprehensive ICT data visualization and analytics platform. HIP Consult is currently building out capabilities to leverage more financial data for a project called InfraNav for Financial Services (IFS).
IFS helps to contextualize the role of connectivity in progressing financial inclusion. For example, the left-hand chart below, derived from InfraNav’s proprietary data, compares financial services access points by type and subnational region, for a snapshot of access point distribution in Bangladesh. The adjacent screenshot entitled “Access Point Reach” from the InfraNav platform visualizes this data, offering a variety of tools to summarize geolocalized access point distribution.
InfraNav also helps measure infrastructure reach. The second chart, to the right, displays the percentage of the population in a given region that is within 1km of a particular financial services access point. By combining both sets of data, determining the effectiveness of an access point in a given region becomes easier. For example, the chart above shows that Rangpur has more Mobile Money Agents (MMAs) than Barisal or Sylhet, yet the second shows that MMAs in Barisal and Sylhet are more easily accessible to their respective populations. Visualizing this information enables exploration of more detailed patterns and deep-dives into specific areas of interest.
Beyond measurement, further analysis may yield insights on supply-demand equilibriums and service optimization opportunities. Over time, improvements in data collection and sharing could allow for ever more comprehensive, granular, and timely analysis. This, in turn, will enable ICT and financial services players to apply smarter segmentation and distribution models to expand their services to areas heretofore seen as economically unviable.
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