Financial exclusion is a multi-layered problem.
Globally, 3.3 billion people struggle to access financial services. These people are denied the benefits of financial services, from taking out loans for business expansion to purchasing a mobile device on credit.
Traditional financial institutions have often struggled to serve lower-income consumers profitably, usually because they cannot reach customers in remote areas or lack the data required to make credible risk assessments.
This data coverage is a particularly thorny issue in emerging markets as data is typically unavailable, disaggregated, or in non-machine readable formats. In addition, features such as a high prevalence of informal economic activity contribute to this.
Fintechs, on the other hand, have made headway in solving this problem by providing low-cost, far-reaching solutions for more people to access financial products. Moreover, fintechs typically unbundle financial services when reaching these underserved customers and focus on giving customers a streamlined user experience that trumps traditional financial institutions.
As data drives business intelligence, the lack of aggregated data or data infrastructure means that businesses do not know how to serve their current and potential customers. Ultimately, this inhibits their growth and limits progress towards financial inclusion goals.
The data infrastructure to make business intelligence possible is often absent in emerging markets as it requires significant investment and talent to build. Once built, it unlocks another level of growth potential for providers of financial services and other B2C businesses.
Building this data infrastructure, for data sharing and consumption, is extremely important for the growth of fintechs. When it is unavailable, the market and growth potential of fintechs are constrained. Where fintechs attempt to build the infrastructure themselves, it can distract them from their core product and market, sometimes to their detriment. Moreover, financial data infrastructure has positive external benefits that may not be captured if that is not their core business.
Therefore, this infrastructure is the key to building new markets and fueling existing ones by ensuring that financial institutions have all the data and insights they need to understand consumers and their markets fully and can build products and experiences that serve them in the ways that they require. As financial services cuts across all other industries, this type of infrastructure has an enormous multiplication effect and can spill over into many other consumer sectors.
This is the infrastructure that Pngme is building.
The Future: Pngme
Pngme is a unified financial data API that helps financial institutions, fintechs, and credit bureaus collect, aggregate, structure, and label financial data at scale.
Pngme aggregates data from multiple sources and provides it to the customer in a structured format. This includes user-permissioned data from connected accounts and non-traditional or alternative data that financial institutions do not traditionally use when building credit models such as USSD transactions (tracking mobile money) or behavioural data such as geographic location, insurance, gambling activities, etc. All of these add richness and granularity to an individual’s financial identity.
For example, an individual who has a mobile money account, an investment and savings app, two bank accounts and performs USSD transactions, can connect all this information with PngMe. In addition to other behavioural data, this helps to create an in-depth financial identity.
PngMe’s API provides an easy to integrate interface that lowers the cost and time required to integrate structured financial data and machine learning models into customers’ digital infrastructure. The API can be accessed simply and quickly, only requiring a few lines of code to retrieve structured and labelled financial data, such as account balances, transactions, alerts, as well as machine learning insights.
It does this for each account held by a user and aggregates this into a customer management platform that clearly shows all the financial data associated with each user. This creates a financial identity for the customer using data aggregated from multiple sources and can make credit-invisible customers visible, thereby growing the market for financial services.
PngMe does not just aggregate the data; they also empower customers to interpret and use data insights through their machine learning-as-a-service platform. This machine learning and analytics service can provide information such as payment ratios, duration of balances, directional changes in proportions, debt to income ratios and shifts in utilisation levels, in near-real-time.
How Pngme Works
Pngme focuses on structuring and labelling several data sources through its unified financial data API and providing machine learning and analytics on top of this. Thus, their business model is pay per use, with customers paying for each API call.
Pngme has three simple pricing tiers: developer, scale and enterprise. At each level, the customer has access to a broader range of functionalities and to per-use discounts up to 70% at the enterprise tier; this is because as you move up tiers, the number of calls you make typically increases, so this is essentially a bulk discount that incentivizes customers to make the most of their service.
Therefore, financial institutions of all sizes can rely on Pngme to fulfil their data aggregation and analysis needs. As they scale (and their data needs change), Pngme can still serve them at lower unit costs. These cost savings can be diverted into other aspects of the business, such as new product development. This is another way Pngme powers the survival and the success of fintechs and financial institutions across the continent.
Pngme powers new insights on credit-invisible and underserved customers previously inaccessible through standard technology. The result is detailed customer financial identities that are transforming their customers’ businesses and empowering them to build high-value financial products for their customers.
Pngme has leadership across multiple geographies, allowing them to understand the global financial landscape and leapfrog developments in their scale markets.
Brendan Playford is the CEO and co-founder. He has extensive experience in fintech, having previously co-founded a blockchain incubator and a distributed network company that enables secure data transfer. His experience perfectly positions him at the nexus of data and financial technology, enabling him to use this knowledge, experience and insights to build a data API financial services company like Pngme.
Cate Rung is the COO and co-founder. She is a growth marketing veteran, with experience leading growth marketing at many successful startups, including Uber. She brings this experience to Pngme.
Pngme also has team members with extensive experience across financial services, including payments and APIs (e.g. PayJoy, Branch, Remit plus). Their experience with these successful companies will be highly beneficial for providing insights into the product development and needs of players in these industries.
At Future Africa, we are excited to be a part of Pngme’s journey to transform the future of financial services across Africa. We welcome the Pngme team to the Future Africa community.