Making financial services more accessible to the unbanked requires making the right evidence-based decisions, monitoring impact and reconsidering earlier decisions. Each step involves data.

Where can this data come from? Meaningful data trails are left by anyone, including low-income people in least developed countries, as they interact both offline and online. When financial-inclusion efforts are carried out through digital financial services, leveraging data analysis can be automated, cheap and fast.

Data analysis can be a game changer because it does not only simplify the process of having the traditionally underserved customer say ‘yes’ to a financial product or service, but it can also convince providers or financial institutions to stop saying ‘no’ to a profile perceived as too risky and not profitable.

Qualifying for loans or being insured can become viable options for those who have been excluded from the financial system. Identifying individuals through data analysis can mean solving the know-your-customer (KYC) headache that is too often still a barrier to account-opening.

In many countries, good use of data has the potential to drastically change how a product is designed and marketed. Additionally, financial service providers could benefit from improved operations and risk management as well as reduced costs from avoiding product failures.

In Uganda, where the market for digital financial services is relatively mature, the United Nations Capital Development Fund (UNCDF) recently signed an agreement with the Belgian Development Cooperation at the local Belgian Embassy to test the use of mobile data analytics for achieving better development results in specific areas: traffic management, financial inclusion and food security.

The project will result in a range of data analytics that will assist UNCDF, its public and private partners and other international organizations to recognize windows of opportunities in services that reach the ‘last mile,’ particularly rural communities and women.