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Data, data everywhere but not a drop to use...

I am a big fan of Amazon. I think it is a brilliant example of making consumers’ lives easier and adding value, especially with their system of recommendations. I’m sure as a business tool it works really well for Amazon – increasing the average ‘basket’ value. But there’s a problem. My wife also shops from my account sometimes, or we buy things for the kids. So I go on to the site and, actually, a lot of the recommendations are of no interest for me personally. (And yes, I have tried ‘fixing’ the recommendation etc.) It’s so close, yet so far!

But what we can learn from Amazon is the value of data.

Data, used correctly, gives you knowledge. Knowledge, applied in the right way, turns into intelligence. Intelligence, brought together in context, delivers insight.

Getting insight from data is the Holy Grail – it moves beyond knowing what people have done, to knowing why they did it and what they are likely to do in future. THEN you can really start to add value to the customer, and that is what drives loyalty.

That is what I believe we are still missing in the payments world. There is so much information that goes alongside any payment that is vastly underutilized. Don’t start shouting me down – I know there are some key retailers who are good at collecting information their customers and using that to add value, but far too many don’t do anything. But I don’t think the opportunities lie at the retailer level, whose view is, by its very nature, limited to transactions in their stores or on their services. To really deliver insight on customers requires much more information than any one retailer would ever be able to get.

So who is in the position to deliver this? What if banks could do it? What if they could consolidate information about all your purchases, online and in different stores? What if they could start looking beyond how much you spent on a transaction, and see what you bought, and start to understand what that means? Imagine if banks could start to provide information to customers based on all their previous activity, as we see online with Google Adsense, and really start to add value and become an integral tool for consumers every day.

They say the value of a payment is in the data that surrounds it – wouldn’t it be great if banks could really start to use that data?


Comments: (2)

John Dring
John Dring - Intel Network Services - Swindon 01 August, 2011, 11:29Be the first to give this comment the thumbs up 0 likes

Paul, I'd say in your Amazon example, Amazon are recommending exactly the kinds of products that 'the account' overall will be interested in.  If it only recommended stuff for you, it wouldn't get up- and cross-sells from your wife for example,  so it is probably working for Amazon which is why as a retailer they do it.  You can always have your own account!

As for Banks using my transaction data - that's been suggested as a rich service they could offer to retailers to enable then to offer relevant products and services.  Of course, the customer has to opt-in to this, but Banks normally find a way to 'enforce' this cooperation.  Te problem as always is that no one bank has the full picture.  Purchases are spread across different banks and even mobile accounts.

The way to have a full view of personal purchases, perhaps, is when more people reach for their mobile to make purchases of any kind, in the way you used to reach for your wallet. Your phone(or Payments App) could effectively aggregate all types of purchase, from NFC, to online to bill payment.  To do this, someone needs to offer a true multi-pocket wallet App which hooks into all payment types (no mean feat, even for the top 3).  That wallet app can then record your transactions and if you allow it, post it securely online where retailers can tap into a genericised version of it.  The consumer could even earn credits for every time the data is accessed.

Basically, if you want relevant offers, or promotions and deals, you have to be prepared to give a little.



Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 03 August, 2011, 16:36Be the first to give this comment the thumbs up 0 likes

Assuming that the average person has more than one checking account and credit card, it's obviously not possible for any one bank to carry out a holistic analysis and present personalized offers based on that person's spending pattern - unless one of his / her banks offers a Mint-like portal to which one can, and is prepared to, link all other accounts. I know at least one bank that offers such a portal (OneView from HDFC Bank in India).

I know one third-party service in the USA called Offermatic which offers such a facility for US-based credit card accounts. (Full Disclosure: Apart from having blogged about it in the past, I've no interest in this company).

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