The future of banking data categorization: The role of financial insights

Thanks to transactional data analysis, the financial industry is transforming to offer better products and services. Nowadays, banks, neobanks, and Fintech face a complex, yet common challenge in any sector: adapt or die.

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It may sound harsh, but as technology advances, it’s becoming increasingly clear that embracing innovation is essential to avoid being left behind”.

Juan Carlos López

Co-founder & CPO of Coinscrap Finance

As I mentioned in my previous article, detecting categories, subcategories, types, and specialties within banking transactional data is making all the difference when it comes to hyper-personalizing the user experience. Our collaboration with entities that have positioned themselves as the most innovative banks in Europe*, such as EVO with its “Smart Piggy Bank” and cashback module, is just one example of the potential of these tools.

How is transactional data analysis evolving in banking?

This process has evolved from being a complement to becoming the cornerstone of customer personalization and retention strategies. As we’ve seen, it provides a better understanding of their spending habits, economic priorities, and financial needs. What do we achieve with this? More appropriate business decisions, based on real information from each individual. 

Now, it’s possible to handle this data in ways you couldn’t even imagine! With machine learning and natural language processing (NLP), your platforms can automatically (and in real-time) enrich banking transactions and generate highly useful financial insights with immediate application. I want to share how this innovation allows banks to create synergies with various functionalities within their apps.

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What exactly is the generation of financial insights?

Deep transaction analysis leads to identifying key moments in people’s lives, such as marriage, the birth of a child, starting college, sudden changes in their financial situation, and many more.

Knowledge is power! And the more a bank cares about deeply understanding its customers, the better it can tailor its offerings. It’s proven that messages delivered at the right time, with the product that best fits the user’s needs, are received far better than average.

What financial insights are the most valuable for a bank?

As we say at Coinscrap Finance, there are no bad insights, but it’s clear that certain financial aspects of the end-user can be more beneficial for institutions. The insights I summarize here help improve strategic decision-making, optimize the customer experience, and maximize profitability:

Income detection opportunities

Knowing which recurring inflows and outflows occur helps find key moments to offer products like loans, insurance, or investments.

Fraud and risk prevention

By analyzing transactional behavior, the bank can detect suspicious activities, helping improve risk management.

Spending and saving behavior

Allows for identifying opportunities to recommend savings, investment, or credit products, and to personalize offers based on specific needs.

Predicting future needs

Analyzing historical patterns allows the bank to predict customer needs, such as mortgages, education, retirement, or asset purchases.

Advanced user segmentation

With all this information, the bank can create precise customer profiles that help better segment their base and design more effective campaigns.

Customer profitability analysis

Identifies which customers are the most profitable for the bank, allowing for more accurate loyalty and cost optimization strategies.

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Harness the knowledge provided by insights with Micro-savings and Cashback modules

Thanks to all the data we can gather and the anticipation our insights generator tool achieves, it’s possible to create intelligent modules that boost customer satisfaction. This is the case with Micro-savings and Automatic Cashback.

Automatic Micro-savings

When a person logs into their online banking and sees an alert about an unusual income, it’s a sign that COCO’s artificial intelligence is at work (it never really stops!).

Immediately, their bank offers a range of options to improve their savings fund, always based on their situation, product history, and profile. Our specialty is segmentation and hyper-personalization, so total customer satisfaction is our goal in every development.

If it’s an inheritance or a bonus, the tool will offer a series of options to maximize the return on that windfall. The idea is to allocate extra income towards savings that weren’t initially planned for.

This is how we combat present bias, which pushes us to seek immediate gratification over future rewards. It’s all part of behavioral finance, the principles of which guide our work.

Cashback 2.0

Synergies are enriching, which is why we emphasize the importance of having these three tools in institutions’ digital platforms: Insights, Micro-savings, and Cashback.

The small percentage of our purchases that automatically returns to our checking account is an increase in our wealth. No two ways about it. And the best part is that we get it daily due to automatic cashback.

Directing that new wealth to micro-savings is effortless and quickly enhances your financial situation. All without us even noticing! If you’re interested in learning more about this module, check out our ebook: From spending to satisfaction.

Thanks for reading! See you soon.

 * Award granted by The World Finance in 2022.

About the Autor

Juan Carlos López Díaz is Chief Product Officer and co-founder of Coinscrap Finance. In 2016, together with David Conde and Óscar Barba, he created Txstockdata and Coinscrap Finance. After the tremendous success achieved, the business pivoted towards B2B, in partnership with EVO Banco and its “Smart Piggy Bank.” As a developer, he has over 8 years of experience leading major projects.

Along with his team, he is capable of creating the best tools for the financial world. From the product department, Juan Carlos has delivered projects for major companies in the sector: Evo Banco, Santander, Caser, Mapfre, and Bankia. He holds a degree in Electrical Engineering from the Central University of Venezuela and an iOS App Development certification from U.N.E.D and U.C.A.M.

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