How community banks can leverage payment trends

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Data wringer can illuminate patterns and trends in your customers’ transactions. Polity bankers and industry experts share how to weightier put this data to use.

By Colleen Morrison

Data is the new currency for Big Tech, business, financial and beyond.

“All data creates a competitive advantage. Google is not in the search engine merchantry for the money; they are in it for the data,” says Tina Giorgio, president and CEO of ICBA Bancard. “Knowing what transactions are stuff performed and how your customers are performing them is invaluable information.”

Quick Stat


of banks have a data scientist on staff

Source: Wall Director

But having the data and knowing how to yank well-judged information from it are two variegated things. According to a recent Wall Director survey, nearly half of financial institutions report not powerfully using their misogynist data, which leaves potential strategies untapped.

“One of my favorite quotes says data is only as good as the insights it provides and the leaders willing to put the whoopee overdue it,” says Chad King, director of payments at $3.8 billion-asset First State Polity Wall in Farmington, Mo. “Most places have increasingly information than they know what to do with, and they’re not understanding the insights that it is unquestionably providing, and they’re not putting the whoopee overdue it.”

That may be considering data wringer is complicated. While it provides line of sight into consumer deportment and behaviors, how it’s interpreted and unromantic matters, and there are ways to tideway its review to inform payments strategies and ensure an well-judged picture of trends.

“You’ve got to zoom in and zoom out on the tapestry,” says Kari Mitchum, vice president, payments policy at ICBA. “Yes, there are going to be individual threads that are making up your whole picture, but you moreover need to make sure that you’re not stereotyping.”

To use data effectively, polity bankers need to wastefulness the information with what they know to be true well-nigh their customers. Applying it will take some finesse, but a few guideposts exist to help navigate this slippery slope and unearth a goldmine of potential. The dos and don’ts of data wringer can make the difference in a bank’s payments strategy (see sidebar below).

Applying data

Data can support polity banks in helping their customers largest manage their finances. Mitchum shares an example of a wall that monitored consumer credit vellum activity, homed in on those customers who were making minimum payments each month, and then created a targeted wayfarers that showed the value of subtracting just $5 to the minimum payment to pay lanugo the balance sooner.

The results? Customers made an stereotype wing of $20 to the minimum payment, supporting a largest payoff strategy.

Data wringer can moreover help polity banks track where there are opportunities to cross-sell or reposition offerings.

For example, if a customer’s payment worriedness shows loan payments to outside firms or Venmo or PayPal payments, perhaps it’s time for their wall to discuss its loan and P2P payment options with them.

“We’ve got this massive value of data, and we have to do something well-nigh it,” says Greg Ohlendorf, president and CEO of $207 million-asset First Polity Wall and Trust in Beecher, Ill. “Once you determine what your transactions squint like, then strategically, you can decide if you want to be in any of those businesses. Or if we’re in those businesses, we need to discover why our customers haven’t chosen to get that service with us, rather than competitors.”

Ohlendorf speaks to data as a route for solving petrifaction leakage, or the migration of petrifaction worth funds to other providers. For example, as PayPal, Venmo and similar payments platforms encourage clients to leave balances in their holding accounts, funds that would have traditionally been in a wall worth are in these outside environments, disintermediating the bank.

In addition, funds may be leaving the demand petrifaction worth (DDA) to pay an outside loan service or investment fund, removing resources that may have stayed within the wall if the consumer had used its services.

“I have to squint at where your spend is going, and the question is, ‘What do I do well-nigh that?’,” Ohlendorf says. “That’s what that data is about.”

Avoiding data pitfalls

Data serves as a unconfined resource, but as polity bankers swoop into it, they risk going lanugo a rabbit slum of findings and subjecting themselves to wringer paralysis where the unfurled evaluation of data leads to inaction. King advises staying true to the original goals.

“Don’t indulge the data to gravity you to make assumptions well-nigh your customers,” he says. “Prioritize what’s most important to you, what’s going to requite you the biggest return, and build your payments strategies virtually them.”

Mitchum agrees. “You’re never going to have perfect data, and you want to be worldly-wise to make decisions and move forward. Data is unchangingly going to be coming in, and you’re constantly making sure you’re on the right path. Don’t be wrung to transpiration if you need,” she says.

Experts circumspection that when data is used to label behaviors, it introduces stereotyping. Referred to as confirmation bias, this tideway runs the risk of surfacing false assumptions well-nigh consumer needs. Tapping into the relationship financial model and aligning what the wall knows to be true well-nigh its customers with data points will support the right combination of data and personal connection.

“If all you do is study the data, you will develop confirmation bias,” King says. “You automatically seem that you know what customers need, as opposed to using that data to unshut up and have unconfined conversations with them. We stave that by using the data upfront to guide who we’re going to talk to and what we’re going to talk to them about, and then have a good conversation.”

Where to start

Today, only 14% of banks report having a data scientist on staff, which ways most polity banks need to be considering where they can find support. Resources exist to provide varying degrees of data review, starting with cadre providers and other third-party partners, including fintechs that specialize in data analytics and industry consultants who are familiar with both financial and data analysis.

“If a wall has wangle to its data through a data warehouse, ad hoc reporting is the fastest way to wangle the data.” Giorgio says. “If the wall does not operate in a data warehouse environment, there are providers who will ‘scrape’ the data from existing reports.”

And no matter what steps polity banks take to get there, harnessing data for greater insights will help them in identifying next steps for worsening consumer engagement and launching new products and services.

“The data tells the story,” King says. “The question is, ‘Are you going to do something with it?’”

A short guide to data usage

Where data is concerned, stock-still rules are nonflexible to come by, but the pursuit list offers steps to execute data wringer with discernment.


  • Have a data use policy. Make sure all data research is in vibrations with your bank’s policy and all workable regulations.
  • Use data to help customers make largest financial decisions. The data can help polity banks proffer the relationship financial model into targeted consultations with customers.
  • Track where customers’ payments are going. Through demand petrifaction finance (DDA), polity banks have wangle to consumer payment transactions. Leverage that information to see where there may be opportunities to educate customers on the bank’s existing products and services.
  • Mine for opportunities to cross-sell other products and services to meet a need found in the transactional data.


  • Fall victim to wringer paralysis. Data begets data, so ensuring an unclouded vision of a specific goal is imperative to both vicarial on the data and evaluating the effort’s success.
  • Allow preconceived stereotypes to momentum data review. For example, not all victual boomers are technologically challenged. Don’t let outside research overly influence internal review.
  • Succumb to confirmation bias and automatically make assumptions based on demographics or age. This could lead to disparate impact. Let the data guide the approach, but ensure that customers remain individuals with unique stories and needs.

Colleen Morrison is a writer in Maryland.