The Partner & Head, Risk Consulting and Innovation on Data Analytics, KPMG Nigeria, Mr. Olumide Olayinka, in this interview with Nume Ekeghe, spoke about the benefits of data analytics to firms and governments at all levels. Excerpts:
What exactly does data analytics entail and why it is important?
To a lay man, Data Analytics is a structured use of data for insight. You gain insights from data when you put it in a right prospective. It also enables you to create value either to your clients, customers or even to your business partners so you can create value. And clearly, it has its competition in this kind of environment that we are in and finally it can help you drive quality business decisions. So data brings a lot of insight into your own business and that helps you create value and make you more competitive. That is the easy way to describe it in a layman language.
Data analytics is vastly utilised in other countries, can you give us a general overview of the data analytics landscape in Nigeria today?
If you look at what is happening in the world today, they say 90 per cent data we have in the world today were created in the last two years. And the reason being is that we have six billion mobile phones and you know what we do daily with mobile phones are all data. So clearly, we are seeing a surge in data. We call it big data or structured data. Examples are data gotten from social media. So we are seeing a surge in data and that data can create value. Nigeria is part of that, I’m sure we have over 150 million mobile phones because a number of them have more than one mobile phone.
In terms of where we are, versus the world, there is still a gap in terms of what we can do with data. For instance, government needs to help because they collect a lot of data from us and how well they use the data is being sub-optimally used or even collected. If you look at all the government agencies, if you go to collect your driver’s licence, international passport and so on. They are seating on all manners of data and they are not helping each other connect the data. In other countries, the moment they collect data for voting, they don’t need to collect data for an international passport vice versa.
On the private sector side, we are seeing a lot of use of data especially in the financial service industry. I still cannot compare it with offshore but at least it they are using a lot of data to see their customer behaviour in order to provide services for them. I also see that being used to a very large extent in the telecoms industry.
A lot of people are talking about digitalisation but what I see in Nigeria is a lot of strategy around it but the execution is not following the strategy.
Going industry specific now, you mentioned the Nigerian banking industry; what sort of value can be derived from trusted analytics in that sector?
When you look at data over a period of time, you are able to better understand a customer’s behaviour and needs and then you can either provide better service of even new products and services for them. There are lots of insight you can derive from data especially if you mine it well in a very structured way.
You mentioned data analytics being vastly used in telecoms, financial institutions, what sector is yet to utilise data analytics in Nigeria?
I think data is useful in all the sectors in Nigeria. I only emphasised two sectors I believe are advanced more than the others. It doesn’t mean that it is not being used in all the other sectors. But I see government backing in these sectors. Look at health for example, you have data in files, while in other economies, you see such data in electronic form and therefore you can mine it and take decisions. I must say that there is a lack of regulation. I mentioned health and in other countries there is privacy act. Health data can be private to most people but you can still use the data but not personalise it yourself.
Right now, there is no regulation or comprehensive regulation that would guide the use of data and I think we need to also create awareness for government to bring in regulations.
Data is presently being collected by different government agencies and banks shouldn’t there be a synergy with all the data being collected?
The obvious answer is that it is sub-optimal for you to continue to capture data. We need to have central repository of data accessible to all these agencies. We have a sub-optimal way and therefore organisations are finding it difficult to authenticate information. However, BVN has helped for the banking industry and now you know the customer you are dealing with.
There has to be centralisation and I think government attempted to do it with the telecoms SIM registration. However, I’m sure there is progress but we haven’t gotten to where we should be. So that is a big problem and it is also a handicap we have when you want to do data analytics for a number of companies.
What are the biggest gaps you have seen in this unique field?
The industries are still in infancy in terms of data analytics in Nigeria. When you start saying gaps, the adoption rate is where we need to improve. How much data analytics do we use to make decisions today? So does this the quality of decision we make would be improved by data.
Data analytics proffers a lot of foresight and intelligence presently, are there any regulations in Nigeria today to protect against exploit?
There is little or no regulation in Nigeria right now and I think there is an urgent need for that. People are using data out there and some people out there whose data are being used either appropriately or inappropriately. So I think regulation needs to quickly come now before the use gets out of hand. The use now is in its infancy but I foresee that there would be a leap frog very quickly and in 1 or 2 years, the way we use data would significantly change. Now is time to come up with regulation so people don’t miss use data especially privacy act to ensure the individuals are protected.
What role can the government play in this regard?
Clearly it is only the government that can set up rules and regulations. What government can do is to create an enabling environment for data analytics to grow. Also create rules to enable that people don’t misuse it. If you don’t have rules, people would take advantage. For me, I think the rules would help guide the use of data so it is not misused. We want government to enable it but some lines need to draw so people’s privacy is not abused. For example, there some countries where after you submit a data you can permit if you want your data to be used because there some data that is personal to you. What government can do is to bring awareness to the populace on how their data can be used and therefore it guides you on the type of data you can submit.
How can one acquire this skill?
For KPMG, we have leveraged from our colleagues offshore and therefore we have been able to build a lot of data analytics skills which is why I’m saying that we have to put it in our curriculum in our universities that is one way of doing it. The other way is to leverage on people who have the experience. Also, in other countries you can get government sponsorship. There was a time government was sponsoring doctors, lawyers etc. I think government can also give scholarship regarding data science and data engineering.
Being that data analytics gives foresight and market intelligence, why wasn’t this foresight used to avert the current economic downturn?
If you look at the last two or three years, with the management of foreign exchange for instance, we have data in the last two or three years on the steps CBN and government have taken so far. There is data out there that if we bring together we can actually in its finest moments and level of data you can see each action and the consequences of this actions through certain parameters in the country. You can actually predict the consequences of the actions.
So therefore some with negatives and positives would give insights isn’t it? Imagine having that information as a governor of central bank or government that is powerful. It would enable you predict that if you do X it would be positive and Y would be negative. That is the power of analytics.
So do we have all the data? I think we have most of the data and they take time to collect and mine it but it is possible. Sometimes, you don’t have to get 100percent of data; 80percent would do because you are predicting probability.
Yes there is power in data analytics, but we are sitting on the fence and nobody is putting them together.