By Soren Heitmann and Oleksiy Anokhin
Collecting increasing amounts of data every day, players on the global market face new challenges in interpreting, visualizing, and communicating information for meaningful data-driven decisions. A fast-growing demand for simple and effective visualization products pushes market participants to pay greater attention to interactive visualization tools, allowing for a holistic picture of everyday activities, results, and lessons learned. This need exists in many sectors, but it is especially relevant for financial-sector firms, where good data management and reporting are critical to delivering the principles of responsible finance.
This case illustrates this point, demonstrating how IFC Advisory Services client MicroCred Senegal is using data-driven dashboards to improve their operations and better serve their clients responsibly. This case shows how these types of tools increase effectiveness and transparency of decision-making and performance communication to customers, partners and other key stakeholders. These lessons are broadly applicable to institutions exploring new methods and tools for improving responsible finance, and should not be considered specific only to microfinance institutions.
Dashboards allow organizations to summarize and visualize data in a simple and intuitive way
MicroCred S.A. is a microfinance network focused on financial inclusion across Africa and Asia. In Senegal, it operates a growing microfinance business offering financial services to people who lack access to banks or other financial services. Reach has been extended across the country by creating a network of over 500 DFS agents. The agent’s Point of Sale (POS) POS devices can perform both over-the-counter (OTC) transactions for bill payments and remittances, and also facilitate deposit and withdrawals to MicroCred accounts. Transaction confirmation is provided through SMS receipt. By late 2016, nearly one third of customers had registered their account to use the agent channel, and over one quarter were actively using agent outlets to conduct transactions. This generated significant operational and channel performance data.
MicroCred’s case is illustrative for broader audiences because it was an early adopter of next-generation data management systems. In 2012, they implemented BIME, a visualization tool to help optimize operations. It enabled them to develop interactive dashboards, tailored to answer specific KPIs and operational questions. MicroCred most frequently uses two dashboards:
Daily Operations Dashboard: This gives a daily perspective on the savings and loan portfolios, highlighting any issues. It presents data over a three-month period, but can be adjusted according to user needs. This dashboard uses automated alerts to warn the operations team of potential problems. The reports, customized for operational teams, include measures such as:
- Tracking KPIs, including transaction volumes, commissions and fees
- Agent activity, with alerts to show non-transacting and underperforming agents
- Suspicious activity and potential fraud alerts, such as unusual agent or customer activity
- Monitoring of DFS enrollment process, with focus on unsuccessful enrollments
- Geographical spread of transactions
Monthly Strategic Dashboard: This gives a longer-term, more strategic view and is mainly used by the management team to visualize more complex business-critical measures. It was developed to consider behavior over the customer lifecycle, including how usage of the service evolves as customers become more familiar with both the technology and the services on offer. It is also possible to easily perform ad hoc analyses to follow up on any questions raised by the data presented in the dashboards. It focuses on:
- Usage of MicroCred branches versus agents
- Customer adoption and usage of DFS
- Deployment of the DFS channel
- Evolution of fundamental KPIs versus long-term goals.
With visualization tools like BIME, it is simple to create graphs to illustrate operational data, making it easier to spot trends and anomalies, and to communicate them effectively. Implementing the data management system also presented some challenges, both technical and cultural. MicroCred recommends that a step-by-step approach is adopted, starting with some basic dashboards, and building up over time to more sophisticated dashboards.
The MicroCred example illustrates how dynamic dashboards can improve responsible finance goals. Such as through improved fraud detection and monitoring in the case of MicroCred’s daily dashboard; or insights from the strategic dashboard to ensure that performance KPIs are meeting activity growth targets on the digital channel. More comprehensive methods in the analysis and visualization of data also improve external communication, delivering clear messages to targeted audiences, and may support financial education campaigns. The complexity of visualization methods may vary significantly, yet they all share the same purpose: analyzing raw data, summarizing its most meaningful results, and demonstrating the main outputs and outcomes, allowing the team to tell a story about the operation and its impact. And ultimately, to help firms better understand and serve their customers.
Adapted from a case study presented in the Data Analytics and Digital Financial Services Handbook (June, 2017), this post was authored by Oleksiy Anokhin, IFC-Mastercard Foundation Partnership for Financial Inclusion, for the Responsible Finance Forum Blog December, 2017.