Datas role in financial inclusion

Nearly 2.5 billion people are estimated to be excluded from the formal financial system worldwide. A great cause of concern for the development gurus, but it represents an opportunity as well for most of the unbanked folks happen to have mobile phones. So, tracking their digital footprints can assist policymakers in coming up with better and targeted policy prescriptions on this issue in various countries.
According to the GSM Association, the number of mobile money deployments (essentially mobile financial services) is close to 150. Including the branchless banking services from stand-alone financial institutions increase that number. As these services gain traction among the unbanked, data trail is beginning to emerge - but there are challenges in collection, aggregation and dissemination of such data.
In Pakistan, the State Bank of Pakistan is doing a great service by releasing, for over a year now, regular quarterly newsletters on the branchless banking landscape in the country. SBP statistics on transaction volumes, along with the data on infrastructure are giving a good sense of the sectors progress and direction to the stakeholders.
Such a proactive approach is largely missing in other developing countries that are seriously making efforts to reduce financial exclusion through the branchless banking means. Complicating this issue are the different country-wise reporting templates and formats that make regional or global comparisons very difficult!
The Consultative Group to Assist the Poor - a World Bank research and policy centre that is leading the financial inclusion agenda - seems aware of the importance of a coherent financial inclusion database. CGAP has now gathered institutions such as the Bill & Melinda Gates Foundation, GSMA, IFC, MasterCard Foundation, and USAID, to develop branchless banking and financial inclusion indicators.
Specific, insightful indicators are required for effective policy interventions, but the evolving nature of branchless banking is proving harder to arrive at any indicators just yet. CGAP researchers published their findings on the "Emerging Landscapes of Data in Branchless Banking" recently, discussing both the supply-side and demand-side of a financial inclusion database.
They observed that the IMFs Financial Access Survey is a major source of global supply-side data on financial inclusion, and that the GSMAs Global Mobile Money Adoption Survey and the World Banks Global Payment Survey are two other sizable data pools. But these data sources contain gaps, noted the researchers, urging the regulators and operators to do more on the supply-side.
The demand-side database is more about the softer elements than the infrastructure-focused supply-side. It is concerned with things like client profile and transaction mix, impact assessment on users lives and livelihoods, desired changes in service delivery and interface, etc. While the supply-side data focuses on past deployments, demand-side data gives a clue towards the future.
The researchers cautioned that the demand-side insights are harder (and expensive) to capture, and even harder for operators to share. The Bill & Melinda Gates Foundation has set up three large financial inclusion database establishments, including the Global Financial Inclusion Database (Findex) which covers 148 countries, and provides 506 country-level indicators.
Initiatives such as Findex look promising. But maintaining such a large set of database requires that the in-country capacities of the relevant institutions are built uniformly. Perhaps, thought should be given to creation and application of harmonized reporting standards that the participating countries can follow. After all, the purpose is to conduct meaningful analyses that can help in decision-making.