Why Data Monetization Can Help You Grow
For many financial services agencies, monetizing assets is a top priority no matter the circumstances. That means looking for different sources of income that come from seemingly unusual locations. This is especially the case in an industry as heavily regulated as the financial sector, which need revenue from places that require less scrutiny. Data presents revenue opportunities through creating value out of its content. With many customers supplying personal information and marketers desiring this information for lead generation and targeted advertising, there’s a great potential for your FI to monetize your data for various uses. Therefore, it’s essential for you to have an effective fraud prevention scheme to secure what will become one of your most valuable assets.
Data becomes the third leg to a banking revenue model
Consider your current revenue model for banking, which is the standard for all financial institutions. There are two sources of income you have. The first is interest rates on loans of all kinds, including business loans and real estate mortgages. The second is fees for transactions and products, from contracts to insurance policies. You might see data as a way to bolster prospects and improve accuracy, according to financial blog Iris, but not in and of itself as a source of revenue.
However, data can do a lot more, as Credit Karma demonstrated. Its business model lies entirely with selling personal data, such as credit history and contact information, to marketers, while providing a free service to users on the financial options. As a result, the company recently earned $175 million in its latest investment round. Banks hold reams of data on their customers, and to a limited extent use it for monetary purposes. However, you can take things a step further by selling to agencies other than marketing and advertising firms through vindication and validation. In doing this, the amount of revenue you can get from making your data valuable grows, enabling it to become a stable third leg in your business model.
Vindication and validation establishes data value
In order get the most value out of customer data, you should establish relationships with other businesses to integrate your data in those places, according to Wired. Working with other companies in different industries establish stronger results and increase the value of the information you have on hand. Consider the relationship between a telecom company and a retailer. The former can provide location-based and transactional information to the latter, which they can then use to create offers to push through on mobile channels through advertising and messages.
Similarly, fraud detection plays a role in monetizing data. One of the key ways of determining fraudulent activity is to find anomalies in established customer patterns. Working with a telecom firm or other agency can help you triangulate key points such as purchase details and location to uncover any discrepancies in a transaction. This enables you to increase the value of your customer’s data so you’re in a better position to sell them to other sources. In turn, you’ll have a new source of revenue that will help you grow.
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