The Future Of Data Monetization
Organizations are analyzing more data than ever before in an attempt to stay ahead of the competition. The use of third party data in business intelligence and advanced analytics, in particular, is growing rapidly, as companies realize that the data they have collected themselves, such as customer journey and demographics, doesn’t show the full picture. In order to use data to its full potential, companies need to be collecting external data too, and they are increasingly looking to do so, with Forrester’s Business Technographics finding that 73% of decision-makers want to expand their ability to source external data.
This presents a real opportunity for organizations who have amassed a large amount of data themselves, and they are looking to make money from it in every way they can. Data monetization topped IDC’s industry prediction list, with the market intelligence giant noting that ‘by 2019, 40% of IT projects will create new digital services and revenue streams that monetize data.’ According to Forrester’s Business Technographics, one-third of firms reported selling their data in 2016, up from just 10% in 2014, while Gartner estimates that 10% of organizations will have a highly profitable business unit specifically for productizing and commercializing their information assets by 2020.
There are a number of industries that stand to benefit from data monetization. Most of all, those in which organizations have been hit particularly hard by disruption and as a result lost ARPU (average revenue per user), yet still hold a wealth of data and insight into the characteristics and behavior of the mass population.
Finance, in particular stands to benefit. One of the main advantages that traditional banks have is the vast amount of financial data they hold about their millions of customers. They also have the structure and capital to exploit it. Speaking at the recent Google Cloud Next conference, Darryl West, Group Chief Information Officer at HSBC, explained that, ‘Apart from our $2.4 trillion dollars of assets on our balance sheet, we have at the core of the company a massive asset in [the form of] our data. And what’s been happening in the last three years is a massive growth in the size of our data assets. Our customers are adopting digital channels more aggressively and we’re collecting more data about how our customers interact with us. As a bank, we need to work with partners to enable us to understand what’s happening and draw out insights in order for us to run a better business and create some amazing customer experiences.’
Banks and credit card companies hold a wealth of data around their customers’ financial habits that are invaluable to retailers in particular. They have access to real transaction data – what consumers actually do, as opposed to just what they say they do. Their information can help to build a complete consumer profile, revealing where and when customers are spending money, where they go on vacation, when they are moving house, insurance information, and so forth.
