THE PROMISE OF PSYCHOMETRIC-BASED CREDIT SCORING IN FINANCIAL INCLUSION

Saul Fine
12 Feb 2019

By Saul Fine is Founder, Chief Scientist & CEO of Innovative Assessments More and more lenders around the world are using alternative data to improve their credit models and better serve the underbanked. Alternative credit data are typically derived from non-traditional sources of financial-related information, such as mobile/internet transactions and payments. But these data can also be non-financial in nature, and as such, provide lenders with a very different kind of credit information. Non-financial data […]

HOW DOES DIGITAL FINANCE IMPACT LOW-INCOME CLIENTS? INSIGHTS FROM A NEW ‘EVIDENCE GAP MAP’

NIAMH BARRY
07 Feb 2019

Image courtesy of Institute for Money, Technology and Financial Inclusion. For the most part, the digital finance community is confident that the digitization of financial services presents an opportunity to get people on the track to living happier, healthier and more prosperous lives. But we should not assume that these are inevitable or exclusive outcomes. Where we have hope, we also have concerns. However, we know that the more we learn about […]

WHY RESPONSIBLE FINANCE INSTITUTIONS SHOULD EMBRACE “UBERIZATION”

Andrée Simon, President & CEO of FINCA Impact Finance
07 Feb 2019

By Andrée Simon, President & CEO of FINCA Impact Finance The sharing economy is forcing banks to compete with dynamic tech firms outside the traditional financial sector. While competition is key, “Uberization” is also creating opportunities for synergy between banks and P2P platforms.   The Sharing Economy The term “sharing economy” dates back to 2007 when Harvard Professor Lawrence Lessig used it to describe how the Internet was changing the world of work. Since […]

LEVERAGING DIGITAL PRESENCE FOR CONSUMER RELATIONSHIPS

Isabelle Smith and Laura Caron
31 Jan 2019

By Isabelle Smith and Laura Caron — In June 2018, co-founding investors and endorsers became signatories to the 10 Guidelines for “Investing in Responsible Digital Financial Services”. These Investor Guidelines directly respond to the increased opportunities and evolving risks emerging in digital financial services, and they range from fostering a proportionate legal and regulatory framework to preventing over-indebtedness, as well as managing risks. The two organizations highlighted below embody, in […]

4 KEY FINANCIAL SERVICES TRENDS IN THE NEW AGE OF WORK

Bill Ready, Executive Vice-President and Chief Operating Officer, PayPal
28 Jan 2019

By Bill Ready, Executive Vice-President and Chief Operating Officer, PayPal– This article is part of the World Economic Forum Annual Meeting Workers need urgent access to new types of credit and savings. Image: Unsplash   The rise of artificial intelligence (AI), machine learning (ML) and automation, the proliferation of internet-based technology platforms, and the move toward more entrepreneurial sources of income are combining to fundamentally shift the ways people work and […]

PARTNERING WITH PROVIDERS TO SET DFS STANDARDS FOR CLIENT PROTECTION

Alex Taylor, Wayne Hennessy-Barrett
17 Jan 2019

By Alex Taylor, Wayne Hennessy-Barrett This post, the first of two on pilot assessments for digital credit standards, features a Q & A with 4G Capital CEO Wayne Hennessy-Barrett. Digital lending has the potential to close the credit demand gap for unbanked, low-income customers, but the rapid growth of the sector has raised consumer protection concerns. In Kenya alone, a leading testing ground for the digital credit sector, there are […]

3 DATA PROTECTION APPROACHES THAT GO BEYOND CONSENT

David Medine, Gayatri Murthy
17 Jan 2019

By David Medine and Gayatri Murthy As digital financial services (DFS) gain popularity in developing countries, it’s becoming more important than ever for data protection legislation to protect consumers’ rights. As we argued in an earlier blog post, simply obtaining consent is not an effective way to protect data rights. Below are three legal approaches to data protection for the 21st century that go beyond consent . By taking one or more of these approaches, policy […]

WHAT’S FINANCIAL HEALTH GOT TO DO WITH IT?

Matthew Soursourian
16 Jan 2019

By Matthew Soursourian Over the past few years, concepts related to financial health and well-being have become more prominent within financial inclusion circles. But what is the relationship between financial inclusion and financial health? CGAP has taken a deeper look into the origin and purpose of financial health and well-being concepts and tried to assess their relevance for advancing financial inclusion in emerging economies. While we see value in these concepts for […]

DIGITAL LENDERS CAN HELP UNLOCK FULL FINANCIAL INCLUSION: DIGITAL FINANCIAL SERVICES AREN’T JUST FOR FINTECHS

Amy Stewart
12 Dec 2018

By Amy Stewart An agent for Accion Microfinance Bank in Nigeria assists a customer.  The market for lending is changing across the globe. A new category of digital lenders has emerged that uses digitized customer data, lower-cost digital channels, and advances in machine learning and analytics to offer better products to more clients in faster, more cost-efficient and engaging ways. The market opportunity is significant: the total transaction value is […]

THE DIGITAL TRANSFORMATION: FOUR OPPORTUNITIES AND THREE THREATS FOR TRADITIONAL FINANCIAL INSTITUTIONS

Graham Wright
10 Dec 2018

By GRAHAM WRIGHT In 2010, Equity Bank called in MicroSave to help with their digital transformation. Today more than 97 percent of Equity Bank’s transactions in Kenya are conducted outside their branch network, and more than 70 percent are self-initiated by their clients on mobile phones. Can you imagine what that does to their cost structures? The International Finance Corporation (IFC) calculates that it reduces the annual cost to serve a customer by […]