Data is crucial for financial inclusion: Experts

Data is the new wealth in the era of digital economy as technology-driven innovation enables the companies to use data to develop cheaper but better products and services, increase efficiency and support financial inclusion of underserved groups, said speakers at a webinar on Wednesday (11 August).

In the last few years, major technology-driven changes have come in financial services: Innovations such as digitisation, internet of things, artificial intelligence and advanced computing have enabled the companies to generate and classify large amounts of data and use them efficiently, said the experts. 

The financial institutions are increasingly competing or partnering along the financial value chain to take advantage of unmet customer needs, less efficient cost structures, high capital usages and attractive returns, said the speakers at the discussion titled "Data sharing in financial services: Unlocking real benefits in the fintech industry." 

Aspire to Innovate (a2i) in association with the Digital Finance Forum Bangladesh and The Business Standard organised the webinar.  

While presenting the keynote paper at the webinar, Shah Zia-Ul Haque, deputy general manager (Payment System Department) of the Bangladesh Bank, said, "Data sharing may provide an immense opportunity for the growth of the fintech industry. Emerging fintech companies and big tech platforms that are entering in financial services present new opportunities for creating additional values through the use of customer data."

"Data will be helpful for the KYC (Know Your Customer) process, overcoming the documentation deficiency, and introducing interest-based products. These will encourage healthy financial behaviour," he said.

"The fintech companies are well positioned to serve new customers outside the traditional financial system as well as expand services to customers poorly served by the current system," he said. 

However, Zia-Ul Haque said the customers may be initially hesitant to share their personal data with unknown fintech companies. Besides, inappropriate and inefficient use of the customer's data may also create business and regulatory risks which may diminish the customer's trust and harm them. 

"So, it needs policy support and dispute management guidelines if any breach of privacy takes place," he recommended, adding that, "The Bangladesh Bank wants to build a data sharing ecosystem, from which all the stakeholders related to the financial services can benefit." 

At the programme, Dana Fintech Chief Executive Officer Gazi Yar Mohammed said, "People need to submit financial or bank statements to get loans, but 50% of the people in the country have no bank accounts." 

"So, we have to come out of conventional banking and accept the statement whether it is financial or non-financial such as salary and purchase history of a customer," he said.

Imran Ahmed, deputy executive director of Shakti Foundation, said, "We are working for years with micro financing and collecting data. However, more data and efficiency is needed, because, when you have more information, you can target more, be more effective and reduce cost and inefficiency."

Adnan Imtiaz Halim, chief executive officer of Sheba.xyz, said, "The microfinance institutions in Bangladesh are collecting detailed data, but there is a lack of technology. Their data can be integrated with the digital services and by analysing the data, a suitable product supply chain can be developed for the customers."

Chief Executive Officer of ShopUp Afeef Zubaer Zaman, Delivery Lead for Remote Banking of ING Banking Group (Belgium) Shoyeb Mahmud and Chief Technology Officer of Prime Bank AYM Mostafa also spoke at the programme and commented on the importance of sharing data and emphasised on providing security for the shared data.