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4 difference-making information you can get from transaction data

Antonis Kazoulis
Written by

Last editedMar 20233 min read

In today’s world, data is power. Businesses build their strategies and long-term plans based on projections, assumptions, and estimates derived from the customer information they can harness from people. In this article, we’ll explore four difference-making batches of information you can get from transaction data, specifically zoning into the limitless potential of open banking

What's transactional data?

Transactional data is defined as the record of a completed transaction that includes details such as products purchased, price, date, and location. This data is used to identify patterns and trends in customer behaviour.

Additionally, transactional data can be a great source of business intelligence, as it can be used to generate customer insights and inform marketing strategies.

How to analyse transaction data?

Whether you're a small business owner or the head of a major corporation, understanding your transactional data is critical to make better decisions about your company's finances. Fortunately, with a bit of know-how, analysing transaction data can be relatively simple and easily integrated into your key business processes.

The way transactional data is analysed can vary depending on the type of business, product, service, and goals you want to achieve. It can be done manually but also automated through software, and in some cases by applying Machine Learning/Artificial Intelligence technology.

As an example, here are a few needed steps in most scenarios:

  1. Know what you want to achieve

  2. Collect and organise your master data

  3. Identify patterns and trends to leverage

  4. Look for outliers

Can banks use transaction data?

Banks have long been able to use customer data to target products and services, but with the advent of big data, banks are now able to use transaction data to better understand and predict customer behaviour. However, there are some privacy concerns that need to be considered.

Banks have always been able to look at customer data to offer products and services that may be of interest.

Income data

Managing the income side of your business is key to success. You need to know where money is coming from, quickly and clearly. 

While accessing precise income categorisation for areas such as cash, loans, cheques, savings, and investments is ideal, the real value comes from the second categorisation tier. Categories such as loans can be subcategorised into payday loans, consumer loans, leasing, car leasing and more. Getting clean information on income, in such a fast and effortless way, improves business workflow in ways that might not be immediately obvious. 

Business reporting is more manageable, and decision-making is faster. The company needs fewer resources to analyse and make sense of data. The income structure is clear, and the company knows where to reinvest, what initiatives to terminate, and what actions need to be taken going forward. 

Expenses data

Once again, the logic here is similar. Much like income, expenses constitute a sizable chunk of a company’s financial health and stability. From basic categories such as government and non-profit organisations, rent and utilities, personal and healthcare and entertainment — to subcategories such as alimony and child support, rent and maintenance and accounting — the depth of information is business-altering. 

Taking a deep dive into your business’s expenses and knowing where every last pound is spent is one of the most empowering tools any business could wish for. You know exactly where to cut back, where to find more creative ways to manage expenses, and where you need to shift your attention.

Real-time data

This category wasn’t available for transactional data a few years ago, as open banking wasn’t around. Getting information in batches hastily is very limited. Modern businesses measure the timing and impact of their initiatives. Let’s use an example to contextualise this idea. Imagine a company launches a Black Friday campaign. Here are some questions that could only be answered if the company had access to real-time data:

  • Are transactions going through?

  • Can the payment system handle the volume of transactions?

  • Is there a product/service dominating sales? 

  • Can the company adjust prices on the fly based on the results?

Real-time access unlocks many doors and opportunities for businesses that would otherwise be closed. The timing of getting the information is as essential as the information itself. 

Logistical transactional data

A highly underrated area of data is logistical data. This data breed is gold for optimising workflow and resource allocation. Logistical data can showcase things like shipping status, shipping partner data and deliveries, storage records, travel records, and more. This is the ideal way to reduce old, obsolete, and error-prone workflows. 

Business logistics is a challenging area to track and improve. Getting any kind of insights in that area could prove crucial to how businesses are set up from the ground up. Data doesn’t only affect cash flows and balance sheets, but it can drive business structure. 

Where is transaction data headed?

Open banking technology and regulation are expanding rapidly. With the PSD3 regulation on the way, it’s clear that open banking-enabled products and services will continue to evolve. 

The goal is to make working with data easy, accessible and meaningful.

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