The Value of Payment Data

by. Jeff Falk

For customers in this extremely competitive financial environment, it’s all about the fees — and as long as those fees are heading towards zero, customers are happy.

What about financial institutions (FIs)? They make money by charging payment fees to process transactions between customers. The more customers drive down payment fees, the less revenue opportunities exist for the providers of these crucial financial services. Yet, to remain relevant and profitable, it may be time to explore new ways of earning income to grow the business.

According to the article “Payment Data Is More Important Than Payment Fees,” the future for FIs may reside in the value of transaction data. The data you possess about your customers holds extremely valuable insight into their spending and saving habits. For example, analyzing a customer’s recent transactions allows you understand where they like to shop, how much they spend, what they buy, when they get paid, when they make payments and so on.

And beyond tracking that purchasing behavior, FIs can also utilize data from customers’ transactions to generate more transactions. The stronger your relationship is with your customers, the better positioned you are to give them advice and recommendations, and of course, to increase customer satisfaction and loyalty with your products and services.

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