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Insights and Expertise

From insight to trust:

The next stage of data monetization in banking

Responsible monetization means embedding insights di-
rectly into the customer journey, supported by strong data
governance and transparency. Banks must view data not
as a commodity to exploit but as a relationship asset that,
when managed well, can improve both customer experi-
ence and profitability.

Innovation within compliance
The line between innovation and regulation in banking is
narrow but navigable. The General Data Protection Regu-
lation (GDPR) and PSD2 have redefined how institutions
collect, share, and process data, demanding that all ex-
perimentation be transparent, consensual, and auditable.

By Radi El Haj The European Banking Authority (see https://tinyurl.
com/5e3d2ahh) describes open banking as a framework
RS2 built on availability, accessibility, and analytics, but only if
those principles coexist with security and privacy.
anks are sitting on an enormous volume of
transaction data. Used carefully, that infor- One effective solution is the self-hosted AI framework.
mation can become the foundation of new Rather than relying on external cloud environments,
B products, pricing models and relationship- banks can develop and test models within their own in-
driven offers. Used irresponsibly, and it's a compliance frastructure, keeping sensitive data under direct control.
nightmare. This model allows internal teams to innovate rapidly
while maintaining compliance and auditability.
Research from McKinsey & Co. shows that payments pro-
viders analyzing consumer and merchant behavior can Retail Banker International (see https://tinyurl.com/34anjhpp)
generate new income streams by transforming insights observed that institutions adopting self-hosted systems
into targeted services rather than relying purely on trans- can experiment more freely without increasing regulatory
action fees (see https://tinyurl.com/3h5akcke). risk.

The difference between insight and impact lies in execu- Practical implementation means building modular AI plat-
tion. Real-time data enables a bank to identify when a cus- forms that operate behind secure firewalls, where consent
tomer's behavior signals a potential need. A frequent trav- management, version control and logging are native func-
eler, for example, could be offered a multi-currency wallet tions. When innovation and compliance teams collaborate
at the exact moment they book a flight, while a regular
fitness subscriber might be introduced to a savings plan
linked to health goals.
What this means for acquirers
Reward programs that integrate across a customer's en-
tire portfolio consistently outperform those limited to For acquiring banks, these principles translate into
individual products. Analysis by EY (see https://tinyurl. smarter merchant services. Transaction data, if gov-
com/4b3x43fe) found that cross-product loyalty models erned carefully, can power targeted pricing, value-
drive higher retention and wallet share, particularly when added offers and retention tools. Real-time insights,
combined with personalized data analytics. explainable models and embedded compliance allow
acquirers to support merchants proactively, deepen
Yet many banks still struggle to act quickly enough on in- relationships and generate revenue beyond inter-
sights. The Financial Brand (see https://tinyurl.com/mr2en- change without increasing regulatory risk or com-
hy9) noted that many institutions are "drowning in cus- plexity exposure.
tomer data but can't act on insights fast enough."

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