Data enrichment improves the quality and profitability of the service offered.
The indiscriminate advance of technology in the financial field is no longer a novelty. The various services and products based on access to financial data form the basis of the new paradigm.
Data enrichment: the basis of a new paradigm
The transactional data produced by users enables the performance of these same services to be improved on an ongoing basis. This process involves:
- Feedback of the information produced
Based on database enrichment, providers use application programming interfaces (APIs) to increase the availability of information. Thus, they can optimize the service of financial institutions operating in this field. In addition, today’s analytics potential optimizes processes and reduces operating costs, which improves the performance of operations.
According to the report “Open banking, an untapped opportunity for the Spanish customer“, carried out by the consulting firm Deloitte, users orient their preferences when choosing a financial provider on the basis of the economic conditions it can offer. This is true in 41% of cases. Precisely for this reason, it is essential to anticipate and satisfy their financial needs.
Categorization and enrichment of banking data: the financial perspective
The so-called API software solutions not only ensure access to databases and sets of financial information, but also produce new information that can be very useful for strategic direction and decision making.
Indeed, the prediction, integration and feedback models used by these data processing systems are constantly being updated. This is due to the high volume of financial transactions that occur on a daily basis. Thus, the raw banking data is categorized to produce standardized information.
On the one hand, this simplifies the management of transactions and makes it possible to offer more accessible financial products to maximize business performance.
On the other hand, it provides a credit risk analysis model that is much more accurate and cost-effective than traditional methods in the industry.
In this sense, data enrichment offers a clear competitive advantage for banks and financial institutions that adopt this approach. Thanks to the intermediation of third-party providers (APIs), information and data are standardized. Thus, they provide better segmentation capabilities, while current analysis models make it possible to establish a more accurate customer profile.
Reward programs and loyalty strategies
The enrichment of banking data and the personalization of services can represent a real benefit in monetary and commercial terms. How? Through rewards programs and loyalty strategies.
In principle, reward programs represent one of the areas that have seen the greatest growth with the consolidation of online commerce. In the case of the banking sector, accessing and attracting a new segment of the population has been a determining factor in recent years.
Reward programs allow attracting new digital native users, because they are convenient in their daily lives: mileage (or travel) plans, discounts, bonuses, refunds and balances, subscriptions and benefit plans are just some of the many things that the new generations demand.
Data enrichment is essential to turn data into useful information. This is a valuable asset that enables reward programs to be offered based on each user’s profile, which improves their performance and guarantees their effectiveness.
In this sense, having strategic partnerships and links with other companies is necessary to meet the user’s interests and achieve a high rate of loyalty: discounts in cinemas, theaters, concerts and shows of all kinds, benefits in supermarkets, restaurants and apps, to name a few, guarantee customer permanence.
Linkage rewards programs
Finally, programs of this type have a methodology that rewards the user for using more and more of the bank’s services. Both native and non-native digital banks employ this type of strategy with the objective of rewarding usage and retention.
Data enrichment allows to effectively determine the most convenient type of linkage and the type of reward to offer. From a lower cost for the service, benefits such as those mentioned above and cash bonuses are very effective in gaining greater market share.
In this sense, the enrichment of the banking database guarantees a substantial improvement in the capacity to relate to the customer, who can be offered personalized products and services and reward and loyalty programs that adapt to their profile.