Page 18 - FIGI - Use of telecommunications data for digital financial inclusion

and best known uses of this model is the sharing by to) provide additional information such as data bun-
Safaricom of data generated by its M-PESA mobile dle purchase and usage patterns, location data and
money service with commercial banks seeking to use movement data. The banks can review and recom-
the data in the provision of credit. mend changes to the scorecard development meth-
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odology in line with observed defaults. In addition
5.1.1 Business model to collection of credit data, the telecommunications
In this model, mobile money services are provided operator is responsible for collection and mainte-
by the telecommunications operator, and banking nance of KYC information, which is shared with the
services are provided by the banks. The data shar- banks.
ing is limited to data required for basic subscriber
management (e.g. KYC information) and specific
mobile money data that the telecommunications Mobile money subscriber and mobile money data
operator provides to the banks that the banks can shared with banks
use to make credit decisions. In addition, both parties • MSISDN
• Data date
have access to their own data generated as a result • Network registration date
of the partnership (e.g., money transfers between the • Payment time
mobile money wallets and bank accounts). • Number of days below specified levels of air-
time
• Airtime utilization
5.1.2 Sharing of data • Activity days and days since last activity
Under the partnership model, sharing arrangements • Average amount of network top-up
are defined by commercial agreements. These • Blocked post-paid numbers
contain specific principles and procedures for sharing • Network post-paid limit
• Network town
of data and allocate compliance risks and responsi- • Information about emergency airtime loans
bilities. Services provided pursuant to the agreement • Mobile Money registration date
are explicitly linked to customers' MSISDN, and the • Mobile Money deposit number
set-up of new banking accounts includes provision • Mobile Money deposit and withdrawal amounts
of full name, ID, birth date, and SIM card IMSI. Each
party is required to notify its customers that person-
ally identifiable information is collected and shared
with third parties. 5.1.3 Telecommunications data shared
A key component of the partnership is for the In the data sharing partnership model, raw tele-
banks to offer loans to the telecommunications oper- com data is collected by the MNO but the financial
ator’s customers, and doing so requires segregating services provider sets the business rules used to
subscribers into different categories based on per- make actual credit decisions. The actual raw data
ceived credit risk. Because these customers have not used and shared is specifically set out in the relevant
generated a traditional credit history, telecommuni- contracts.
cations data, mobile money data and socio-demo- Credit decisions are made by the banks based in
graphic data is used to segregate subscribers. part on voice, data and mobile money usage on the
A credit scorecard is used to rank customers operator’s telecomunications network. There are two
based on unique parameters maintained by the tele- main types of data that are shared:
communications operator on subscriber accounts Mobile money subscriber data such as the subscrib-
over a given period, e.g., 6 months. The raw data is er's name and any of such subscriber's national iden-
collected and maintained by the telecommunications tity card number, military card number, diplomatic
operator and processed through application of sta- identity card number, alien card number, passport
tistical methods. The banks develop business rules number or driving licence number, as reflected in the
sitting above the scorecard of raw data to convert telecommunications operator’s records from time to
the credit scores into lending limits for specific cus- time
tomers. The telecommuications operator also shares Subscriber credit data is information relating to the
the credit score parameters used to allocate cred- use by the subscriber of the mobile money service
it scores to customers and customer demographic and the telecommunications network (see text box
details with thebanks, and may (but is not required on the right).

16 Use of telecommunications data for digital financial inclusion