As financial services increasingly go digital, finding innovative ways to leverage new kinds of data and tools is fast becoming a necessity for financial service providers, both to remain competitive in traditional markets and to tap into vast new markets.
This report, which is based on interviews with banks, fintechs, and other actors, examines how new types of data and analytics tools are being used in the financial sector to reach underserved markets. The aim is to take stock of how the data landscape is evolving, to describe new types of data tools, and to assess how firms are innovating around data, and where they have experienced setbacks. As this report will discuss, there are many internal and external challenges that providers must address for the promise of new data to be fully realized. From getting the right culture and technical talent in place to engaging with regulators and partners on data sharing and management, there are numerous obstacles to negotiate in capitalizing on the explosion of new data to reach underserved markets with new commercially viable solutions.
There are too many contingencies to prescribe a “one-size-fits-all” solution. Instead, it is an effort to shed light on the potential of data to improve financial services for the underserved. While underserved markets may not be as lucrative as more developed markets today, they represent a great opportunity for mainstream financial institutions: they are unsaturated and likely to represent a much larger share of growth in the years ahead. But along with the influx of new types of data and tools also come new kinds of competitive threats. The traditional boundaries separating players in adjacent industries are blurring, and the future market for financial services is up for grabs. Mainstream providers must therefore accelerate their efforts to confront these challenges and future-proof themselves for what the data revolution has in store.