As you look over 2015’s various predictions, you’ll find no shortage of those espousing the benefits of Big Data and how institutions will be leveraging the intelligence it provides to achieve some sort of business nirvana. In this article, I will be taking a small step back to look at the what, where, and why of transaction data—a financial institution’s most valuable, yet often most difficult to access, source of intelligence on the end customer experience.
What is transaction data?
For anyone concerned about operational performance and consumer engagement, transaction data is your gold mine (or bitcoin mine, depending on where you see the greatest analogical value). Banking, retail and payment processing networks play host to an “always on” data source—consumer transactions. Each transaction that travels across your ATM, POS, Mobile banking or Internet banking environments contains useful information on what the customer is experiencing, how networks and applications are responding and what the business value of each transaction is from a revenue or service perspective.
Where is transaction data?
Similar to traditional mining—getting access to and refining the “gold” in transaction data is where the difficulty lies. There are an ever growing number of complex moving parts in a transaction network, and today’s banks, payment processors and retailers are also dealing with an explosion in the volumes and types of electronic consumer interactions they must support. For example, most banks now run a minimum of eight services per ATM, with many running upwards of 40 to 100. Back end transaction approvals need to come from a variety of value added service and host authorization connections, depending on the transaction type. Some may still go to the payments switch, but more now go to external applications servers and third party service providers. These increasing transaction volumes, infrastructure complexity and growing consumer expectations cannot be managed in a timely, cost effective way without real-time access to consumer-centric transaction data. It will be those financial institutions that find a way to access, and more importantly, make sense of, all this transaction data that will meet and exceed the high expectations of today’s consumer.
Why use transaction data?
Forward thinking financial institutions have already started reaping the rewards from investing in tools that allow them easy access to transaction data. For example, last year one of the largest banks in the Middle East began leveraging a solution from INETCO and NCR that allowed them real-time access to the data contained within every transaction flowing through their ATM network. This solution provided the bank’s IT Operations teams and ATM line of business executives with easy access to transaction data, made available through configurable dashboards, alerts and analytics. The bank’s data “mining” efforts that previously took days or weeks, is now done in real-time—which in turn makes the intelligence gathered that much more actionable. The results: the bank reacts in seconds (rather than hours) to consumer related transaction issues, has improved ATM availability, and is able to optimize their ATM service offering through easy analysis of consumer usage patterns. They’ve also been able to leverage the rich consumer intelligence gathered from their ATM transactions to build data-driven marketing campaigns targeting off-us consumers in efforts to convert these users into new, higher margin, on-us customers.
What’s to come?
So it comes to the point of the article where a prediction is made. I expect to see banks move from talking about Big Data, to deploying tools that allow them access to, and an understanding of, transaction data. And with that improved intelligence, I see these banks enhancing the consumer banking experience while improving their own profitability.
See the entire Predictions 2015 issue of Transaction News