Financial inclusion is a critical challenge in many developing economies, including those in Africa. Millions of people lack access to traditional banking services, making it difficult for them to save, invest, and improve their financial well-being. However, with the advent of technology and innovative approaches, there’s a significant opportunity to address this issue. One such innovative solution is the use of SMS data to power financial inclusion.
Before we take a deep dive of better understanding SMS data and how our affordability analysis solution uses SMS data to extract this information, here’s a look at all of Gathr’s capabilities at a glance.
Gathr’s affordability analysis solution
Gathr, powered by Finch Technologies, specialises in harnessing alternative data sets to enhance financial access in Africa. Our current alternative data marketplace empowers fintech companies, mobile operators, and retailers to enrich their onboarding processes using robust data collection methods. One of the key aspects of their solution is the incorporation of SMS data into their data collection methods.
Tapping into alternative transactional data
While Finch Technologies already employs various methodologies like direct bank integration, screen scraping, PDF parsing, and USSD emulation to extract transactional data, tapping into SMS data represents a crucial missing piece. SMS data contains valuable transactional information sent by banks to their customers. By strategically extracting and analysing this data, we can reconstruct comprehensive transaction statements for individual users.
Why SMS data matters?
SMS data rises as a key player in modern financial insights. Its unique benefits and departure from direct bank data offer inclusivity and enhanced understanding, revolutionising financial analysis and data collection.
Here are a couple of unique advantages of using SMS data:
- Addressing multi-banking complexities: Many individuals in Africa use multiple banks, each with its own app or online portal. SMS data aggregates transactions from all banks linked to a specific cellphone number, providing a more comprehensive view of an individual’s financial behaviour. This is especially important in a region where multi-banking is common.
- Extending accessibility: In contrast to online or app-based banking, where only 15% of South Africans are active users, SMS data extraction is viable for a much larger population. This inclusivity is crucial for financial inclusion efforts, as it ensures that a wider range of people can be assessed for creditworthiness.
- Supporting widespread mobile usage: South Africa and many other African countries have high rates of mobile phone and SIM card usage. Leveraging SMS data leverages this ubiquity to collect financial information efficiently.
The scope of SMS data for financial inclusion
The potential impact of SMS data in financial inclusion is immense. According to the National Credit Regulator (NCR), there are over 58 million loan applications annually in South Africa alone. However, traditional methods like direct-to-bank and screen scraping only cater to 15% of these applications. This leaves a significant gap of 49 million customers who require an alternative data extraction approach.
Finch Technologies is well-positioned to fill this gap for several reasons:
Technical expertise: Finch Technologies possesses the technical prowess to implement SMS data extraction seamlessly. Their expertise in alternative data collection methods positions them as a reliable provider of innovative solutions.
Solid relationships: Finch has cultivated strong relationships with mobile operators. These partnerships are invaluable in facilitating the smoother implementation of SMS data extraction methods.
Market presence: Finch Technologies has already established itself as one of the nation’s largest providers of alternative affordability data. Their reputation and experience make them a trusted player in the industry.
Financial inclusion is a pressing issue in many parts of Africa, and leveraging SMS data represents a powerful solution to address this challenge. Finch Technologies, through its subsidiary Gathr, is at the forefront of this innovation. By tapping into SMS data, they can provide a more inclusive and comprehensive view of individuals’ financial behaviours, ultimately opening up access to financial services for millions of underserved customers. With the technical expertise, industry relationships, and market presence they possess, Finch Technologies is well-positioned to drive this transformative change in the financial inclusion landscape, bringing economic empowerment to a broader segment of the population.