Payments Analytics-holy-grail of Payments Business
Payments being the heart of commerce, Payments Analytics is considered the holy-grail of Payments Business. When you know who paid how much to whom for what and when - you have a goldmine of insights for improving your business. With the advent of mobile commerce consumers are getting less and less loyal and they are expecting more and more value from the service providers. At the same time Technology is improving to help support the need for crunching huge source of versatile data faster and cheaper and thus improve the sales conversion rate.
When designing a Payments Analytics initiative it is important to plan holistically and consider all the constraints within which the business operates to optimize the return. We should consider the market regulations around privacy and ensure we are compliant. As a best practice we should provide customer very granular level of privacy choice options - e.g. 'I want my Payments data to be shared within bank for Travel related offers' etc.
Garbage-In means Garbage-Out - before we apply any sophisticated algorithm it is absolutely necessary to ensure the data is clean as much as possible. Next we should plan what we want to do with the data and how to execute the plan. What should be our choice of algorithms, should it be build in-house or we should follow a 'buy and build' strategy. To really help senior management take effective decisions the data needs right level of summarization and visualization. Hence data visualization strategy is as important as data analytics strategy.
Let's now analyze various utilities we can gain from Payments Analytics:
Real time Risk/Fraud/Security:
With the advent of Faster Payments and smarter fraudsters it is extremely important to recognize a fraud/security breach incident real-time and take appropriate action. We need strong algorithms and continuously fine-tune them to keep the algorithms relevant (machine-learning etc.). We want to minimize false-positives and negatives for these alerts and balance security risk with ease of use.
Real time monitoring of Operations and Infrastructure:
Real-time Business Activity Monitoring can be a great investment to ensure your Payments Operation and Infrastructure is working at optimum capacity. These systems can identify shocks (e.g. Very high Server utilization, huge number of payments messages flowing to Repair Queue etc.) and help management mitigate the risks proactively.
Single View of customer, Relationship-based pricing and personalization:
Payments Analytics helps to gain single view of customer who is having multi product, multi-channel relationship with various business units. This ensures you can predict her needs much before she actually asks for it. In future with the advent of Internet of Things technologies we will see systems recognizing low stock in refrigerator automatically ordering & paying for groceries after finding the best deal for the client. We have just started the journey!