5 minute read

Maximizing Profitability with a Data-Driven Approach

Tuesday, September 26, 2023

5 Minute Read

Issuers face untapped potential to revolutionize their business strategy and boost profits with the power of data and analytics.

In today’s world, businesses are seemingly inundated with overwhelming amounts of unorganized data. And if that’s not bad enough, trying to make decisions based on this data, can be a huge drain on company resources. Despite the challenges to develop a data-driven culture, it’s no secret that organizations are making great leaps in driving innovation to stand out from their competition. In fact, according to NewVantage Partners, almost 94% of organizations are planning to increase their investment in data and analytics solutions¹.

Comparing portfolio level statistics and monitoring cardholder activity enables issuers to improve operational inefficiencies and minimize risk. With historical and near real-time data, companies gain a competitive edge, identifying new product opportunities and expanding markets. Additionally, TSYS VP of Global Data Products, Kenneth Viciana, addresses how data can impact operations and revenue, “When used effectively data is a key driver of business strategy. It can identify both revenue generating and cost saving opportunities.”

Even though issuers stand to gain a multitude of advantages, only 24% of organizations believed they were backed by data-driven decisions¹. Focusing on building a data culture and investing in analytics and modernization will set a data-led company apart from the rest.

The role of big data in banking

Over the last decade modern day banking has greatly evolved. Today, cardholders expect a digital and self-service experience via their mobile app. This digital activity holds a wealth of information for issuers. Gaining insights into cardholder behavior and spending habits enables banks to grow their service experience and manage security aspects more effectively.

Data needs to be at the forefront of the bank's business strategy. Imagine that data is fuel and the bank is a car. The fuel is essential in accelerating the car. The more fuel, the farther the car will travel.

Revolutionize the customer experience

Enhanced decision-making capabilities span across an issuers entire enterprise when data and analytics are properly utilized. From the digital experience to fraud detection, data will accelerate growth, improve risk control and deliver value to cardholders.

Issuer’s strive to better understand how cardholders are using their credit cards, why accounts default, and how to mitigate risk. Analyzing transaction data enables issuers to accurately tap into all aspects of the business to maximize profits and improve the customer experience. For organizations that have implemented a data-driven strategy, 46% say they have identified and created new product and revenue streams².

Insights deliver a competitive advantage to retain loyal customers and increase market volume. “Data and analytics enables banks to better understand their customers and to create a targeted and personalized user experience,” says Viciana.

For example, let’s say Joe is a cardholder who’s card usage depends heavily on what rewards he is offered. He applied for a new card last year from ABC Bank. The great rewards Joe receives from ABC Bank, top all the others in his wallet—meaning he is more likely to reach for this card when making a purchase.

The foundation of Joe’s great experience is ABC Bank’s data-driven rewards program. They utilize historical and real-time data to capture cardholder activity and predict trends. This analytical strategy identifies signs of churn and ensures the bank stays one step ahead of Joe's rewards preferences—and the competition. Now, cardholders like Joe, are keeping their ABC Bank issued card at the top of their wallet.

Becoming a data-driven enterprise

Despite the benefits, issuers are up against a multitude of obstacles. For instance, eighty percent of new data is unstructured, taking time and sources to capture and quantify³. Relying on data scientists’ capacity and maintaining data models take up significant amounts of time and money. Another issue? Approximately 79% of executives identified cultural issues as their leading challenge to becoming data-driven¹. “Companies that struggle to become more data-driven are often attributed to three components,” Viciana says. “People, process, and technology.” While managing data as a business asset is key for success, organizations will need to address these issues.

Investing in traditional and emerging analytics technology is the first step in becoming a data-driven enterprise. This technology will reduce the labor-intensive resources required from data teams. The focus can then shift to developing actionable insights from cleansed and measured data sets.

While supporting data and technology teams is essential to these data-driven initiatives, incorporating the tools that deliver decision-ready insights will increase efficiency and value. Properly allocating these resources will ensure data science teams can deliver actionable insights rather than wasting resources on non-viable data sets.

Find out more

Issuers face an array of opportunities by implementing a data-driven strategy. In an ever-evolving market, staying ahead of emerging trends, expanding marketing potential and mitigating potential risks will set an issuer apart from the rest.

If you are interested in learning more about how to grow your data and analytics strategy with TSYS next gen analytics solutions, click here.

1 NewVantage Partners 2023 Data and Analytics Leadership Annual Executive Survey
2 MicroStrategy 2020 Global State of Enterprise Analytics
3 Harvard Business Review 2022 Why Becoming a Data-Driven Organization is so Hard

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