By Thanos Bismpigiannis, product director at Currencycloud
Data, data and more data. Everyone’s talking about it. Collecting data is one thing; but how we utilise it effectively is the real challenge we face today.
Our ability to store, mine and subsequently analyse data has allowed businesses to identify trends, spot opportunities and ultimately drive value for both themselves and their customers.
As a result, consumers see this in action on a daily basis: from supermarket loyalty cards encouraging relevant shopping purchase promotions, to film, and TV recommendations on Amazon, Netflix and other streaming services based on your shopping and viewing habits.
Businesses too have embraced the benefits of data analysis – logistics companies use data to track deliveries and provide relevant information to their customers, or to manage ‘just in time’ inventory. Manufacturing companies use data to make production and material purchase decisions in ways that increase their efficiencies and reduce their costs. Financial services companies use data to assess their customers’ risk profile and offer them products that match their needs.
The banking industry, however, has been slower off the mark. Until now. Open Banking regulations have seen fintechs applying new, exciting applications based on utilising data to offer greater value to customers. The likes of Monzo and Starling provide customers with analysis of spending habits that allow customers to easily see how, where and what they’re spending their money on, while they’re also able to provide prompts to the user when they’re set to go over their budgeted amount for that month.
The opportunity to then influence and change habits, or potentially save money is much easier. And that’s where the real value lies for the customer, and in turn activates loyalty towards the bank.
Open Banking regulations have seen fintechs applying new, exciting applications based on utilising data to offer greater value to customers.
But there’s the potential for this to go further.
As consumers and businesses become more familiar and confident with what technology can offer, we’re also able to look to the future and use predictive analysis to spot trends, make recommendations and simply execute suggestions. For example, if a bank knows a customer spends X amount a month on their utility bills, but the bank in question knows of better cost savings elsewhere, it can make a suggestion to switch supplier, all with the aim of providing that customer with better savings, and a better use of their money.
But data is ultimately just numbers on a page if you don’t know what you’re looking at or how to interpret it. While all businesses can generate data points, data analysis is only useful when it serves to bring about change or support a business decision. In B2B, business leaders are looking to uncover insights that are meaningful to them.
In the past, businesses would need a lot of time and money, and probably someone with a PhD in statistical analysis, to turn raw data into actionable business intelligence.
This is no longer the case. As technology leaps forward, smart systems and reporting tools are helping businesses not only understand their product and service uptake, but importantly, how their customers are interacting with these products and services. Businesses like ours are collating data, but crucially, we’re translating it into informative insights and analysis that allow our clients to make smart business decisions that impact the bottom line, such as where they could be making savings on payments, conversions or balances.
While understanding and processing this data will increasingly become an automated process as machine learning and AI are integrated further, humans will stay play a vital role in using this data to make actionable insights. Data has the power to drive value and an improved experience for both businesses and their customers, it’s down to the business leaders at financial organisations to recognise this power, and to look at more ways in which they can harness and utilise the data at their fingertips.