Globally, over a billion adults remain unbanked and virtually all live in the developing world. Without access to financial services—insurance, payments and credit— the ability to smooth consumption and access opportunities to improve welfare is reduced.

There are many challenges to delivering accessible, affordable and appropriate financial products to customers, in particular  in developing countries. These challenges include

  • Limited data on potential customers to assess credit and insurance risk profiles
  • Low income customers are outside financial providers’ reach due to high operational cost of serving remote areas
  • Constrained business models to operate in remote areas serving low income customers

The space sector is now contributing new types of information to form part of the solution to many of these challenges, through innovative use cases in insurance, credit and payments. While using Space technology for financial services is comparatively new, it is clear that space technology offers advantages in areas where other sources of information are limited.

Broader initiatives that utilise space technology in the finance  sector in developing countries are now emerging:

International Partnership Programme: A UK Space Agency initiative that uses the UK Space sector’s research and innovation strengths to deliver a sustainable, economic and societal benefit to undeveloped nations and developing economies. IPP has a number of projects that aim to enhance access to financial services as highlighted in the Space for Finance in Developing Countries report.

Geodata for Agriculture and Water (G4AW): Improves food security in developing countries by using satellite data. Netherlands Space Office (NSO) is executing this programme, commissioned by the Dutch Ministry of Foreign Affairs. They are also investigating the potential of space technology for agricultural finance. 

Spatial Finance Initiative: The Spatial Finance Initiative has been established to bring together research capabilities in space, data science, and financial services to make them greater than the sum of their parts. The Initiative is designed to be a funnel, undertaking and coordinating world-leading academic research and channeling these into real-world finance-related applications. 

Relevant Documents

Caribou Space, 2019, Space for finance in developing countries

The report draws on examples of space solutions for finance supported by IPP and organisations outside of IPP. Finance products include payments, savings, credit and insurance. There are now several organisations using space technology to enable greater access to financial services in developing countries.

Catapult Satellite Applications, 2018. ‘Routes to Market Report 18 – Satellite Technologies for Insurance Services’

A market overview of the opportunities to use space technology in the insurance sector, mainly focused on developed markets. Highlights the value proposition, market competition analysis, revenue projections and a review of the opportunity blockers.

The Partnership for Finance in a Digital Africa (FiDA), 2018. ‘Launching into Space: Using satellite imagery in Financial services.’

A case study that explores the use of satellite imagery in financial services through the work of two FinTech organisations: Apollo Agriculture and Harvesting Inc. This case study investigates how these organisations implemented earth observation technology and the journeys on which each organisation embarked as they integrated satellite imagery into their business models and product offerings.

Global Index Insurance Facility (GIFF): Achievements Report (Phase 1: 2010-2015)

Profiles of various organisations working in developing countries and supported by the GIIF. A number of these companies are integrating EO data into their insurance products.

GIIF. 2015.’Using Satellite Data for Index Insurance’

This short briefing highlights how satellite technology and its continued advancement is critical to the relevance and accuracy of index insurance products as a counter against weather-related risks. The briefing highlights the various EO data sources used, case studies, and challenges.

The Copernicus Downstream Sector and User Benefits, PwC, November 2016. Pages 49 – 57

This market report summarizes the main findings from two studies, prepared by PwC for the European Commission and published in 2016: The report on the Copernicus downstream sector and end user benefits, and (2) The report on the socio-economic impact of Copernicus. From pages 49-57, the report highlights the market opportunity for EO in the insurance sector, sharing insights on current uptake, potential impact (social, economic, revenue) and a case study from the spainish market.

Earth Observation Responses to Geo-information Market Drivers – Insurance Sector Summary Report

This interim summary report has been produced by Aon Limited and ESYS plc. It identifies and focuses on aspects of the insurance industry which have a demand for geo-information and could potentially use EO data. It also reviews the current level of space technology use in the insurance industry and identifies blockages to wider use of space technology.

G4AW, 2018 “How space technology is transforming Africa’s food system through low-cost insurance products for smallholders”

The G4AW supported SUM Africa project is using satellite based weather data to create a low cost insurance product for framers in Mali and Uganda.

Global partnership for sustainable development data, 2019 “Agriculture Data Shaping Policy and Changing Lives in Kenya and Tanzania’

Highlighting the results of the kenyan livestock insurance programme. This programme uses an algorithm that layers survey data on livestock mortality with satellite data on vegetation cover to develop an index that predicts real-time livestock mortality.

World Bank. 2015. ‘Agricultural data and insurance, Innovations in agricultural data development for insurance.’

A World Bank study in India found that satellite data combined with crop cutting experiments (CCE) increases index accuracy

Relevant documents