The spread of mobile phones and cellular networks are facilitating easier access to financial services in hard-to-reach population and small businesses at low cost and risk in developing countries.
Managing Director and Chief Executive Officer of Sterling Bank Plc, Mr. Suleiman Abubakar, said this while delivering a paper as guest speaker at a breakfast roundtable organised by the Financial Services Group of the Lagos Chamber of Commerce and Industry (LCCI) on deepening financial inclusion through data analytics and financial technology in Lagos recently.
Abubakar, who was represented by Sterling Bank’s Chief Information Technology Officer, Mr. Olayinka Oni, noted that in the context of financial inclusion, “Fintechs hold tremendous potential, challenging old business models with greater speed, accountability and efficiency at a cheaper cost.”
He said access to financial products and services were becoming more attainable than ever for consumers that live in rural locations or regions without the equipment and infrastructure of a modern economy due to the prevalence of mobile phones and cellular networks.
Abubakar said financial institutions and fintechs could objectively use data analytics to extend credit to consumers who previously had to contend with sometimes exploitative informal credit because they had no formal credit history.
He said it was essential for a country to have strong political commitment and coordination across relevant stakeholder groups in both the public and private sectors of the economy to achieve financial inclusion.
In addition, the country must put in place wide-reaching policies that promote responsible financial access, financial capability, innovative products and delivery mechanisms, the guest speaker said.
He stressed the impact of data on financial inclusion, saying as customer transactions around the world become increasingly digitised, data analytics can shed light on patterns such as how frequently and for what purposes customers use their accounts to provide some benefits for financially excluded customers.
“Benefits that can be obtained from this approach include insights on financing, accelerating customer product adoption, improved marketing effectiveness and agent network optimisation,” he said.