In a world where data is the new oil fuelling the engines of innovation and progress, being absent from the data sets means being invisible to the future.
There was a media storm last year when it came to light that WesBank vehicle financier charged black clients more interest for vehicle financing compared to white applicants. The bank vigorously denied that race played a factor but struggled to convincingly explain why an independent financial investigating consultant had found that black people were charged up to 19% interest while white people were charged around 11.25%.
The bank claimed it had to do with credit risks and financial profiles, which relied on data such as income statements, expenses and credit bureau ratings. These are all reputable sources of data, so what is the problem here? Well, put bluntly, the problem is that the data that exists on many South Africans is woefully inadequate and paints a wholly inaccurate picture of the realities facing most citizens. Closing the data gap is key to development
Mo Ibrahim, Founder and Chair of the Mo Ibrahim Foundation (MIF) said in a 2023 report, "Without data, we are driving blind – policies are misdirected and progress on the road to development is stunted. We must act urgently to close the data gap in Africa if we genuinely want to leave no one behind."
To do this, it’s not just about gathering more data but gathering the right kind of data and using that in the right ways. In South Africa, for instance, traditional data gathering and surveys have led to lots of data being gathered but it is often outdated, inaccurate and/or unusable. There is little to no data on how millions of people in South Africa live, work and earn income in informal areas. For instance, many traditional employment surveys simply ask: Do you have a job? Many answer no, thinking the question refers to a formal job.
Meanwhile, they may be earning an income as a day mother looking after small children or running an informal business as a nail technician or barber. This information is crucial to so many sectors of our society. Credit bureaus use bank account information as a main source of information about an individual's credit profile. But what about the millions of South Africans who don't own a credit card or even have a traditional bank account? Are they more of a credit risk than someone who does?
According to Shamima Vawda, senior evaluator at Wakamoso, the absence of data from informal or mixed markets results in incomplete and often irrelevant economic models that neglect diverse economic realities. It is this gap between marginalised communities and decision-makers and service providers that Wakamoso, a data commons platform, is attempting to bridge. It’s doing this by leveraging the power of AI and other emerging technologies to capture more accurate data and use it to drive meaningful social and economic progress.
Big data is not just for big business
Currently, the AI revolution is being narrated as a winner-takes-all story. Big tech titans, fuelled by mountains of data, are racing towards an inevitable future where they control everything. But this story risks overshadowing a very important conversation about the difference these technologies can make to marginalised communities and small businesses, which are the backbone of every thriving community.
In fact, big data and AI cannot be just for the rich and powerful. Platforms like Wakamosa and others are demonstrating that it is possible to put the power in the hands of communities by incentivising them to gather the data about themselves and their lives that is needed to facilitate the flow of information to potential employers, customers, and service providers that will, in turn, improve their lives.
Big data, sculpted by AI and machine learning, can make a big difference as a real-time tool to drive social and economic outcomes in marginalised communities. For instance, by providing insights into the needs of communities, online platforms can help governments and NGOs improve service delivery in areas such as healthcare, education, and infrastructure. Areas where there are shortages of essential services or where infrastructure is inadequate can be more easily identified, and emergencies can be responded to more quickly. The London Data Store, a platform that has information on thousands of Londoners, for example, is helping Londoners find affordable homes; locate suitable schools, as well as monitor roads and traffic. While in India, cities are harnessing big data and AI to improve waste efficiencies.
Big data can also serve to connect job seekers with employers based on skills, location, and other relevant factors, helping businesses to hire from within their communities by making it easier to locate the talent they need and verify people’s credentials. It can assist with understanding complex land tenure and ownership systems, providing more efficient and effective ways of retaining and updating essential ownership information. Local businesses can use this technology to survey and gather data about their target markets to improve sales and advertising by delivering products and services that local residents actually need and want.
Other benefits can include strengthening financial inclusion. Accurate data can be used to develop micro-insurance products and other financial services that are tailored to the needs of underserved communities. And by making data more accessible, such platforms can help to promote transparency and accountability in both the public and private sectors helping to reduce corruption and improve governance.
Changing the story
Like all technology revolutions in history, big data and AI are a double-edged sword. While they have huge potential for African development, these technologies could also drive an even starker digital divide unless we find ways to democratise their use and application. In a world where data is the new oil fuelling the engines of innovation and progress, being absent from the data sets means being invisible to the future.
The real story of the AI revolution needs to be not about who wins and who loses, but about who dares to use this incredible tool to build something remarkable to make the invisible visible and improve the lives of billions.