Payments data is no exception and this is true for established banks and new players in the financial market. In order to make the data actionable, it needs to be cleansed, categorised and put into an understandable form. This is where enrichment comes in. Learn how to choose the right partner for payment data enrichment.
What is enriched data and where to get it
Simply put, data enrichment is the extraction of additional information by linking existing data to external sources without having to ask the customer for it.
Payment data enrichment allows companies to learn more about their clients; the more data they have, the better business decisions they can make. Both the companies offering payment services (new business opportunities, easier fraud detection and risk assessment, better customer experience, etc.) and the clients themselves (easier budgeting, saving, etc.) benefit from enriched data.
The good news is that there are already a number of data enrichment solution providers on the market today, so there are many to choose from. But how do you identify the right one for your business?
6 criteria for choosing a payment data enrichment partner
Let's take a look at 6 criteria you should consider well before you shake hands with your new provider.
1) Aligning the expectations is a neccesity
When searching for a data enrichment provider, aligning expectations becomes a crucial first step for one simple reason: it's important to establish a clear understanding of what your organization envisions in a data enrichment partnership. This initial alignment lays the foundation for a successful collaboration in the long run, ensuring that the provider comprehensively meets your unique needs and goals.
Before focusing on technical aspects, take a moment to define your objectives, aspirations, and the specific data points critical to your company and its financial operations. A reputable data enrichment provider should not only match but exceed these expectations, providing a tailored solution that aligns seamlessly with your business objectives. In the world of cloud services and rapid changes, being able to adapt is key to staying competitive in the long run.
Also, consider the scope of data enrichment services required, such as enhancing customer experience, refining risk assessments, or optimizing fraud detection. Transparency in communication with potential providers is key – share your expectations openly, inquire about their capabilities, and seek examples of successful implementations within the fintech sector.
Remember, it's not just about finding a provider; it's about finding a strategic partner committed to elevating your fintech initiatives to new heights through the power of enriched data.
2) Proof of concept with a raw data
Naturally, when choosing a partner for payment data enrichment, the first consideration is the data itself, its quality and how much and what additional information the provider is able to offer based on the input data.
A proof of concept serves as the litmus test for the efficacy of a data enrichment provider's capabilities. It allows you to witness firsthand how their technology aligns with your business objectives, providing a tangible demonstration of the value they bring to your financial operations. By collaborating on a POC, you gain valuable insights into the provider's ability to enhance your company's informational output within the limits of your specific industry. That includes data like:
- Merchant name
- GPS location
- Category (food, shoes, restaurants, etc.)
The payment provider also supplies some data by default i.e.:
- Date and time of transaction
- Payment amount
Any additional information (website, opening hours, phone number, customer reviews, the carbon footprint of the transaction…) is a big plus and opens up additional opportunities for the business. While some can only enrich a fraction of the data, others can handle most of it. But be careful that quantity does not come at the expense of quality. In the hunt for 100% data enrichment, some providers are literally shooting from the hip, and you can clearly see that in the results.
Since it is impossible to make good business decisions based on flawed data, a company should also be concerned about the quality and timeliness of the data provided. The data must be accurate, static knowledge bases are not acceptable for payments, and a combination of several different sources and algorithms for drawing and updating data is always ideal. It turns out that relying only on MCC codes (merchant codes) for data enrichment does not pay off: in fact, the error rate of the information is often as high as 50 %.
3) Security and legislation
In most cases, data enrichment as a service works on the principle of APIs, which require data to be shared with third parties.
To start off, the solution under consideration should not require the sharing of any personal data of clients, but only the basic identifiers of individual payments. Its provider should then comply with the General Data Protection Regulation (GDPR) and ideally be ISO 27001:2013 certified (international standard for information security management systems).
The payment data enrichment solution must be quickly and easily integrated into the company's existing systems. The most common solution is the aforementioned API, which can be worked with in several ways (calling at the moment of data creation, at the moment when the client requests it with his activity, for example in the application, continuous storage of available data in the company's systems, etc.).
It is therefore necessary to clarify what the company expects from data enrichment, how it wants to handle the data and whether the provider is really able to help it.
When talking about pricing, there is an important step you have to consider - use the in-house solution for data enrichment or hire an external team to do the heavy lifting? In-house solutions are often expensive and very time consuming, so they are not suitable for the vast majority of companies.
However, even with outsourced tools, it is important to consider what the company is actually looking for. The cheapest is not necessarily the best and looking at the value for money that the chosen solution will bring to the business is definitely worthwhile.
6) Read more
In addition to the criteria mentioned above, there are other things you can look at when choosing a payment data enrichment partner. How long has the provider been in business? How much data has it enriched (and how well)? Who are its clients? And last but not least: what markets does it operate in and is yours among them? If a company is successfully enriching data in several markets, it can be assumed that it will be able to add more markets where, for example, no one else offers the service yet.
The more "experienced" the provider, the better the quality of the knowledge base and the more sophisticated the data enrichment methods, (usually). The more markets, the more likely yours is (or could be) among them. The bigger and more well-known the clients, the better the guarantee that you too have found the right partner for you.
Two pieces of advice in conclusion
Trust but verify. Don't rely on a pretty presentation when choosing a data enrichment partner, but look at the integration itself and verify the quality of the data it provides first-hand.
Don't kill two (three, four…) birds with one stone. As tempting as it may be to get one provider for several services at once, focus on just one when it comes to data enrichment. This will prevent you from ending up with several incomparable or barely comparable bids, or only one competitor in the tender.
TapiX has been on the market for over 8 years and offers tailor-made solutions for financial institutions (banks, fintechs, payment startups). It has enriched more than 5 billion transactions for clients like Raiffeisen Bank, UniCredit Bank, bunq, Twisto and others. The cloud-based TapiX API can be integrated in a matter of days. The company is GDPR compliant and ISO 27001:2013 certified.
Dateio, founded in 2013, is a fast-growing Czech FinTech with a mission to bring deeper insights to the modern banking consumer. What started as a platform of card-linked offers has become an integrated solution for banks to help retail banks significantly improve their customers' user experience.
Today, Dateio is a banking partner to several top banks in Europe and the Middle East, where it helps millions of users offer added value through an enriched transaction data and card-linked marketing platform. At the end of 2021, Dateio was awarded a Deloitte Technology FAST 50 CE and named the fastest growing Czech company by the Financial Times.