After working in Zambia advancing digital financial inclusion since 2015, UNCDF has discovered the critical role of data in, not only driving increased financial inclusion, but for the larger Digital Economy within Zambia and the other 40+ Least Developed Countries. In Zambia, the Digital Financial Services Ecosystem, both public and private sectors are “hungry” for data on the growing demand and supply of digital financial services. They are not the only ones: investors, donors and others, too, seek this information at a high frequency for important decision-making purposes.

Bank of Zambia (BOZ) has a strategic and critical position with oversight in the digital financial services (DFS) market. The Banking, Currency and Payments Department is one of the main divisions supervising the digital finance market. However, as market data come in on a monthly basis from more than 50 financial institutions, aggregating, compiling and analysing those data becomes a difficult and almost-impossible task to do effectively and efficiently. While the Bank of Zambia understands the incredible set of data it has within all these Excel sheets, the ability to turn these data sets into “analytical gold” for themselves and the industry was a challenging task.

In 2016, BOZ and UNCDF began discussions around how to address these problems in order for the collection, aggregation and analysis of DFS data to be automated through a data system. By doing this, DFS market data would be available to all users in real time at a higher frequency. In addition, BOZ wanted to ensure the data received were accurate and could be disaggregated by sex and age, which would provide insight into who is being financially excluded. BOZ aims to increase financial inclusion by 13% by 2022, and by having access to real-time data, the central bank -- the custodian of these data -- can view progress made in achieving this goal.

To automate the data processes, UNCDF and BOZ designed a project that would result in a data platform that DFS providers could use to input their data while allowing departments in BOZ, such as the Payments Division, Banking Supervision, Non-Bank Supervision, Economics and others to view the data. This regulatory technology is designed to be open-source and will be named shortly. Using the System, the Bank will collect data from different industry sources and analyse it according to various measurements - transaction levels, access and usage, mobile networks, poverty levels, gender of customers, population demographics and others to support its policy making.

UNCDF and BOZ developed this solution leveraging learnings from a similar UNCDF project conducted in Nepal with Nepal Rastra Bank, the Nepalese central bank. The platform developed through this project brought in data from 150 institutions, 5700 branches into a reporting and analytics portal. By having data accessible in this manner, helped the Nepalese central bank and government identify areas needing financial access points, reasons for this need and at what scale the access points should operate. This portal also enabled commercial banks, development banks, finance companies, non-bank payment service providers and micro-finance institutions to report in a timely and systematic manner, a goal similar to BOZ’s goal for DFS data.

To begin working towards these goals, UNCDF and BOZ issued a Request for Proposals using a Business Requirements Document designed with the Bank of Zambia in December 2018. The resulting chosen vendor for this project is SmartSolutions, a technology firm based in Nepal and the USA.

The project, which began in May, has been well-received by BOZ.

“We are positive about the project with UNCDF. We want to make sure we work together to build a system that’s productive for Bank of Zambia and usable for the end-user, the DFS providers,” said Gladys Mposha, Director of Banking Supervision at a workshop to review the System’s Public Dashboard. This meeting convened various DFS stakeholders to review the System’s Public Dashboard -- which they would ordinarily use -- before they are finalised. Present were representatives from Ministry of Finance, the Central Statistical Office, the World Bank and others. It was an insightful meeting with many positive contributions that lead to the improvement of the dashboards, and left all stakeholders excited for the potential of having such a wealth of information at everyone’s fingertips.

The DFS Data Automation System is still under development and is undergoing user acceptance testing and expected to go live in the last quarter of 2019.

UNCDF is working with the governments of Nepal, Zambia, Gambia and Bangladesh on financial inclusion data systems. Growing the ability for governments to make data-based decision making as well as improving access to data for the larger domestic and international Digital Ecosystems will have a multiplier effect. Leveraging the use of data is at the heart of new and transformative business models that are helping countries achieve their Sustainable Development Goals. In Zambia, UNCDF’s goals is to help every Zambian achieve their needs, wants and aspirations – and this is one more step towards that goal.