Aggregated Data. Do you feel like you’ve been promised the moon, but wonder if this is all just a big ‘moonshot’?
Let’s demystify that hype cycle. Examples of aggregated data include MX, Yodlee, Plaid, and Finicity. A few challenges inherent to using aggregated data:
Customer Permission
Most regulatory regimes leave you to your own devices to obtain customer permission to access the data. The most successful approaches to get permission reimagine the financial product offering in order to give the customer new benefits and incentives for permissioning their data.
Estimate the Benefits
Have you calculated what the data is worth to your organization? This will drive you decisions around how to incentivize and reward customers for opting in. When you consider the benefits, you should include ‘downstream’ benefits. For example, if a customer provides permission at underwriting, you may find the biggest benefit was later, such as having an early predictor of prepayment or delinquency behavior.
Segmented Strategy
Let’s say you’re successful in getting 30% of your customers to provide permission. Of that 30%, you are still likely to experience data outages. For example, if a bank makes a change to their website, the screen scraping algorithm needs to be updated, and may be ‘broken’ until then. You’ll need to have strategies for customers with and without the aggregated data. First, educate yourself about your data sources. Is the data provided via screen scraping or APIs? How often should you expect outages? Next, create a segmentation strategy to ensure you have a good approach for both permissioned and non-permissioned customers.
Actionable Insights
“We are swimming in an ocean of data, with not a drop to drink of data insights….” When selecting an aggregated data source, you should evaluate both the data, as well as the prepacked insights which are provided. Use “test and learn” strategies to test out new strategies using those insights. It’s not about the data. It’s about how you change, improve and reimagine how you interact with your customers.
Watch this space to hear more about new and existing use cases for aggregated data! #MXS2021