Every second of every day, banks, retailers, payments organizations and a broad network of companies across the region play host to a vast flowing river of transactional data. From the tiny ripples of single transactions to massive waves of batch settlements, this information comes from customers, merchants and even third parties. Most of this data is recorded and stored for invoicing, account statements, auditing and fraud prevention, but it’s poorly exploited when it comes to generating new revenue sources and businesses.
That’s right – businesses. Those countless daily transactions containing data have real value and are the “prima materia” or source material for improving profitability, efficiency, customer experience and customer loyalty, and fashioning new, finished products. How, is this possible? Here are five initial steps you can take to start monetizing your company’s data:
- Start thinking about institutionalizing your approach to data – The initial step is to promote an informed discussion about the value you can begin to extrapolate from what you have and its potential value to others inside and outside your organization. What would it look like if your company started to institutionalize the capture, storage, analysis and application of data? Clearly, the help of a business intelligence and analytics specialist would be of significant value in this process. It may also be useful to create a steering committee with specialists from various business areas.
- Audit your current data – Establish the size and nature of the data that your company has by undertaking a comprehensive audit. Where is it stored? Is it centralized or dispersed? How many customer records and data points do you have? How far back do they go and across how many different markets? How much of a customer’s “life journey” are you holding? What kind of predictive insights and behavioral patterns might be possible with your data, such as: what do they buy, when do they buy and how often do they take out cash? Finally, what do you know about their demographic profiles?
- Assign a data manager – To truly maximize revenue or any other tangible value from your data, someone must own responsibility for it. These experts are increasingly specialized and coveted talents, and like all human resources, recruiting is key. Also, when you find the right leader, make sure that person has an important seat at the executive table. In today and tomorrow’s world, data managers will have a major strategic influence as opposed to the current operational role of custodians and safe-keepers of data.
- Package and make your data work for you – Determining the best delivery vehicles for new data-based products or services targeted toward existing and/or new customers is a considerable, but worthy challenge. Through business analytics and intelligence, your newly collected and organized data will reveal insights and understanding into how your company’s bottom line can be improved by: 1) streamlining current business processes, 2) revealing new revenue sources and models and 3) providing opportunities to frame, package and brand the data to be shared externally. The possibilities include geo-localization, proximity +NFC, apps for mobiles, imaging and M2M among others.
- Embrace emerging-payment systems – As non-traditional or emerging-payment platforms (such as mobile phones and wallets) grow in use this represents a rich data pool. However, many companies are not taking advantage of such emerging payments, and they are losing out on opportunities for new revenue streams. Make sure you embrace emerging-payments systems in order to capture as much data as possible.
As the buzz around big data turns to increased action in our region, some eminent and long-term challenges will have to be addressed:
Digital payments: If our formal economies are flowing rivers of data, our informal economies are like vast, opaque lakes. We’ve heard for many years about the war on cash, but this initiative is going to be increasingly relevant to broaden our digital world and break down its current edges.
The talent question: A new generation of talent is going to be needed to carry these practices forward and improve them. The question then is where will new resources be trained in order to effectively wield these powerful tools?
Security: Our standards and local laws will need to be up to the task of addressing the risks associated with bad practices and misuses of data, and of protecting consumers in particular.
Collaboration: Good data is like good ingredients. Some combinations can be extremely appetizing and even sustaining. Will our companies learn to share data or will our strong culture of competition and suspicion keep us from great things? Can we imagine a “First Bank of Data” for sharing this information or is it some utilitarian dream?
These and many other questions come to mind when contemplating how we will relate to our data tomorrow. Whatever the answers, one thing is certain: the time to start thinking about data differently was yesterday.
Anabel Pérez is President & CEO of NovoPayment, the leading payments technology services company in Latin America, providing prepaid/stored-value program design, implementation and Platform as a Service (PaaS).