Data monetization has become an increasingly popular topic of discussion in recent years, and for good reason. Banks are among the most data-intensive institutions in the world, and the data they manage is the lifeblood of their organization. However, many banks have yet to fully realize the potential of their data assets.
Earlier this month at Celent’s Navigating Turbulence event in New York, I had the pleasure of hosting a conversation with product, technology and data leaders from several of the major transaction and corporate banking institutions. It was a stimulating exchange of ideas and feedback - spurred on by some innovative examples of how data can be monetized.
One of the key challenges that banks face is the lack of clarity around the definition of data monetization. A recent Celent research study into data monetization found that only 41% of respondents felt that data monetization includes creating new products and services that leverage transaction data. However, 79% of respondents believe that demand among corporate clients for data-led services is increasing! This suggests that there is a significant untapped potential for banks to monetize their data assets – especially through solutions based on underlying transaction data.
We started the session by identifying some basic building blocks for how banks can monetize their data assets to increase revenue, reduce costs, and reduce risk and losses – many of which were covered in Unlocking Treasury Insights: Road Map to Intelligent Solutions. The conversation quickly turned to reviewing some examples from leading banks that are monetizing data through innovative products and solutions – not just analytics. We also looked at the value of “connected data” in the new API-enabled banking ecosystem, which was a prelude to a deeper dive panel conversation moderated by Patricia Hines about embedded fintech solutions and partnerships.
One area of substantial conversation was about the latent value of XML data in ISO 20022, as identified by my Celent colleague Gareth Lodge in his recent report, Ready or Not, Here It Comes: There’s No Hiding from ISO 20022. The ISO 20022 program isn’t just about payments because every payment is someone else’s receivable, and the transaction also drives information reporting data for at least two companies. The rich, timely data from ISO 20022 investments can be the foundation for many data-led and analytics-based solutions for fraud prevention and working capital management
Of course, every initiative has challenges, so we also reviewed the typical blockers that can inhibit a data monetization strategy. Some of these are technical, but most stem from organizational and cultural challenges in business and technology. Everyone acknowledged at least some experience of these issues.
More positively, we wrapped up with some practical next steps and best practices. Developing and implementing a comprehensive data monetization strategy is challenging. For many banks, the historical lack of business investment in data means that achieving this transformation is fraught with obstacles. However, by taking a broader view of their data assets and recognizing the inherent value, banks can create new revenue streams, increase efficiencies, reduce risks, and improve their relationships with clients.
I look forward to seeing you at a future Celent or industry event.