In Segmint’s most recent Data Jam Session, How to Leverage Your Transaction Data in the Data Cloud, a panel of experts stressed the importance of data security and governance, and discussed the most important strategy for financial institutions:
You got to get to know the data, immerse yourself in the data.
– Mark Leher, VP of Data and Analytics for Segmint
In today’s competitive environment, account holder transaction data may be a financial institution’s (FI’s) greatest asset. From enabling marketing automation to providing competitive insights, more companies are realizing the benefits of merchant payment cleansing solutions and the true value of the data they already have in-house. However, transmitting large volumes of data for cleansing can increase risk and cost, and slow down the practical application of the insights generated. An intriguing alternative is to use a data cloud platform to execute merchant payment cleansing solutions, allowing FIs to react faster and provide better security for sensitive account holder data.
Here’s how the data cloud can bring enhanced speed, scale and security to financial institutions.
The Value of Transaction Data
“Gone are the days where I walked in the bank…and I walk up to the teller, I have that one-on-one interaction. Those things are gone,” John Thuma, Senior Solutions Engineer at Snowflake, said in a recent Data Jam Session. “Over the next 10 years, you won’t even recognize what banks look like today. Gone will be the physical side of banking…In fact, one major fintech company just did a study that said 41% of the people have changed the way they’ve interacted with their bank. They’re no longer going into the bank. They’re trusting the applications, the mobile apps, they’re trusting the websites.”
Now, the conversation between account holders and financial institutions is all digital. Which is to say, it’s in the data.
Every time an account holder swipes their credit card or sets up a recurring payment, they’re saying something about their priorities and signaling their future intentions. Financial institutions need to mine that transaction data using merchant payment cleansing solutions to have a better conversation that engages the account holder. Data can then be refined further to identify the next best action for a given situation, whether that’s generating a loan offer, providing financial wellness education, capturing a cross-sell opportunity, or some other initiative.
“We start cleaning things out of those transactions, trying to get down to the root of the transaction, removing a lot of the noise from that transaction,” said Lance Cuthbert, VP of Data Architecture for Segmint and another panelist in the Data Jam Session. “Once we get down to that, then you can actually start doing some magic.”
Where the data cloud comes into the equation is making it easier to actually process the large volumes of transaction data financial institutions have at their fingertips. The data cloud is a digital ecosystem that allows financial institutions to store and interact with data in a single streamlined system. It is also the easy button for manifesting data exploitation and actionability for financial institutions. A world-class cloud data platform provides unlimited scale of data and computing power, unlocking almost limitless use cases for strategic business operations.
The Advantages of the Data Cloud: Best-In-Class Data Security and Analytics Capabilities
An alternative way to conduct merchant payment cleansing is within a data sharing ecosystem. With an integrated solution, all of the transaction data is cleaned within the data cloud environment itself and never has to be transferred outside the system. That means financial institutions don’t have to generate extracts, don’t have to do any ETL work and the data ultimately stays more secure.
Eliminating the need to transfer data between systems reduces the likelihood of incursions or unintended exposure of sensitive data, effectively keeping everything under one roof. But security in the data cloud environment doesn’t stop there.
When choosing a data cloud solution or partner, consider security features such as PCI compliance, SOC 2 compliance, HITRUST compliance and ISO compliance. The solution should automatically mask data using AI and implement role-based access to identify the appropriate level of security for every piece of data. Tokenization also helps financial institutions make better use of data while ensuring personally identifiable information (PII) stays secure and the organization maintains compliance with all relevant data privacy regulations.
As we are progressing with technologies and the ability of the technologies to provide the accessibility to the data, we are also able to keep the security of that data intact,” Cuthbert said.
The cloud share environment allows financial institutions to bring analytics capabilities to the data and execute processes quickly at scale. It also enables FIs to fully modernize their technology stack through additional integrations with trusted systems that all share data securely, thus further enhancing data actionability for financial institutions of any size.
Faster Application of Insights Drives Business Value
The “time value” of money is the idea that a dollar today is more valuable than a dollar a month from now. The same is true of data. The faster FIs can process and act on transaction data, the more valuable it will be to the organization. Consider this example from Mark Leher, VP of Data and Analytics at Segmint, as he discussed in the panel session:
Today, you can’t sit around and pontificate. You have to use data to make decisions. I like to use professional sports as an analogy, probably an industry that was a little bit ahead of the curve…Turn on a baseball game today and you have four infielders on the right-hand side and the other side’s totally empty. Because they’ve embraced analytics and they know that it’s pretty likely with the batter against this pitcher, if you put the ball in a certain spot, it’s going to ground out to the right side…The teams that embraced that, you can see it in the results. They’re doing better. And so other industries, and I’ll bring that to fintechs, need to—and they’re starting to—embrace the same thing. You got to look at the data.
Heavy competition and fintech disruptors are just the beginning of many waves of changes that will impact revenue for banks and credit unions. In today’s atmosphere, decision making has to happen quickly. Processing and mining data insights in a cloud-based solution gives FI leaders intelligence in minutes to drive business value and respond to account holder needs in a way that is both relevant and timely.
Data is a Financial Institution’s Biggest Asset
According to recent stats released on customer experience, 91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them. This is not new, and not earth shattering. However, the insights a financial institution has access to should be activated to build relationships, increase wallet share and combat the competition.
Does my customer really want a HELOC loan? Or do they really want a mortgage? No, they want a better house.
– John Thuma, Snowflake
When a financial institution can tap into the human element and what really matters to account holders, FIs can establish a connection and commitment to supporting their life journey, no matter the stage.
The path from data cloud technology to meaningful account holder engagement is clear: Use merchant payment cleansing to make first-party data actionable. Use a cloud-based environment for speed, security and scale. Use the insights to understand trends and behaviors of account holders to deliver that relevant message and experience.
Data is your biggest asset, period.
– John Thuma, Snowflake
Want to experience the benefits the data cloud could bring to your organization? Contact Segmint to set up a free consultation and we’ll show you how Segmint and Snowflake combine to produce amazing results for financial institutions.