Adopting more effective and powerful data management systems will drive operational efficiency and also enable institutions to offer enhanced customer experiences
In this article, Joris Lochy, Product Manager at Intix, explores the crucial role of transaction data in the growing embedded finance landscape. He discusses how real-time data management enhances operational efficiency, improves customer experiences and drives innovation, particularly as financial services integrate with non-financial platforms.
As embedded finance continues to become an integral part of financial services, the importance of transaction data has never been more relevant. Despite being relatively nascent, embedded finance is already transforming how financial services are delivered by integrating directly into non-financial platforms. This powerful innovation offers consumers and businesses seamless, efficient access to services such as lending, payments or insurance exactly when they are needed.
At the heart of this transformation is transaction data. Leveraging the power of data is not only crucial to the success of embedded finance but also essential for driving improved customer experiences and operational efficiency. Reflecting on discussions from Sibos 2024, it is clear that the continued development of efficient transaction data management will be central to future innovation in financial services.
Enhancing Real-Time Decision Making Through Data
In an embedded finance environment, the ability to act in real time is crucial. Whether delivering instant loan approvals, making real-time cross-border payments or providing personalised financial recommendations, banks, fintechs and even non-financial businesses require access to high-quality, real-time data. As financial services decentralise and integrate into third-party platforms, the complexity of transaction data flows increases significantly. Efficiently managing this data and harnessing it for real-time decision-making will provide companies with the tools to stand out in an increasingly crowded market.
Take for example the huge benefits associated with consolidating transaction data into a unified view. Through this approach, financial institutions are able to respond quickly and accurately to emerging trends and anomalies. Meanwhile, real-time tracking and analysis of payments allow for faster detection of irregularities, improving operational efficiency and enhancing fraud prevention. In today’s competitive environment, this capability has become more essential than ever, with the ability to manage and act on data in real time now a key differentiator for financial services providers.
At the heart of this shift are transaction data platforms. These systems play a vital role by providing a comprehensive view of all transaction data, which can then be coupled with advanced analytics to enable institutions to track, trace, and act on data in real time. This agility is essential for enhancing fraud detection and customer satisfaction, giving institutions a competitive edge in the financial landscape.
Improving Customer Experiences
Customer experience is one of the most critical elements in the success of embedded finance. Today’s customers demand seamless and instantaneous services, whether paying for a product, applying for a loan, or investing in securities. When managed effectively, transaction data can significantly enhance these experiences by enabling financial institutions to deliver the right service at the right moment.
For example, data from a customer’s previous transactions can be used to offer tailored financial products or discounts, delivered through embedded finance platforms at the point of sale. By managing transaction data efficiently, institutions can also reduce the friction associated with payment processes, creating a smoother and more intuitive customer journey.
Operational Efficiency Through Effective Data Management
Efficient management of transaction data also enables institutions to streamline processes that would otherwise require significant manual effort. By indexing and tracking data from various sources, institutions can achieve greater visibility and control over their transactions. This visibility is not only crucial for meeting regulatory demands but also for improving overall operational workflows, allowing teams to make informed, real-time decisions without being hindered by the manual processing of vast data sets.
As financial services become increasingly integrated into various sectors of the economy, such as retail and healthcare, it is essential that the operational side of data management keeps pace with the speed of innovation. With the emergence of new payment platforms, lending models, and financial services within non-financial ecosystems, the ability to manage the sheer volume and diversity of transaction data effectively will become a crucial differentiator for success.
Data is at the Core of the Future of Finance
Ultimately, as financial services continue to evolve, the central role of transaction data is undeniable. Embedded finance, in particular, will continue to grow as a dominant trend, integrating seamlessly into various non-financial services to deliver personalised, real-time offerings. However, the success of embedded finance depends on an institution’s ability to manage and leverage transaction data effectively.
Adopting more effective and powerful data management systems will not only drive operational efficiency but also enable institutions to offer enhanced customer experiences. Whether through the real-time approval of loans, the processing of instant payments or the mitigation of fraud, the ability to access, process and act on high-quality transaction data is key to staying ahead in this competitive market.
For more information about Intix, please visit: https://intix.eu/