There has never been a better time to monetise anonymised data

Retail banks are being squeezed by the rising costs of digitisation combined with reducing margins from traditional revenue streams. Anonymised datasets present a significant opportunity to create new, high-margin revenue, while driving more informed decisions for business and government, and broad economic and societal benefits.

Four years ago, I was a strategy consultant, working with governments and looking for new data sources that would provide a view on the real-time European economy. I looked at data from Twitter, Google, Facebook, mobile location data and many more. These have value, but at best are a proxy for economic activity.

To truly understand the economy, I needed to see anonymised consumer spend data in real time, from multiple sources. Financial institutions hold this data in vast quantities, but it was not available then for granular economic analysis. We created a market leading approach which enables our banking partners to build new stable income from the data they hold, securely and ethically. As we started reaching out to banks to discuss this opportunity, several factors were coming together to create optimal market conditions and unlocking the huge value potential in transaction data.

1. ANONYMISED DATA UNLOCKED

The introduction of GDPR in 2018 provided a strict framework for defining and handling personal data and supported Fable’s decision to create a PII-free business. Working solely with anonymised data reduces risk and protects consumers.

Our mission to provide better data to leading decision makers in government and business is aligned with the aims of regulation. Earlier this year, the European Commission set out a data strategy for Europe, a key theme being the benefit that can be derived from providing more access to non-personal data.

“Citizens should be empowered to make better decisions based on insights gleaned from non-personal data. And that data should be available to all – whether public or private, big or small, start-up or giant. This will help society to get the most out of innovation and competition and ensure that everyone benefits from a digital dividend… The EU can become a leading role model for a society empowered by data to make better decisions – in business and the public sector.”

(A European strategy for data, European Commission, February 2020)

2. EVOLVING REVENUE STREAMS

Banks and financial institutions across Europe are facing the challenge of rising costs from digitisation and regulatory requirements, combined with reducing profits from traditional revenue streams, and increased competition.

High demand from global blue-chip corporates, investors, and government for real-time data insights and analytics can generate significant income for banks. For neobanks and open banking applications, such revenues may be fundamental to their success. There are an increasing number of sources of transaction data, but datasets with the longest histories and highest share of wallet will remain the most statistically valuable to our clients.

The costs of building product development, data science and sales infrastructure are significant. Fable Data takes cares of all these costs, ensuring onboarding and maintenance costs are minimal, and maximising bottom line benefits for the data owner.

3. DEMOCRATISATION THROUGH TECHNOLOGY

Raw transaction data has little value on its own, and many banks have struggled to derive insights internally from their own datasets. And, while generating revenue from data is not new, previously financial institutions have been limited by low granularity, low frequency products. Fable Data has developed sophisticated tagging and structuring, leveraging new technology and advanced machine learning, facilitating granular large-scale European spend data analysis for the first time.

Our data partners also access insights on their data in our universe, creating the opportunity to provide benefit back to their customers.

Furthermore, the cloud has democratised data science, and today there are hundreds of clients with the computing power to work with very large data sets. Five years ago, this number would not have exceeded double digits.

4. UNPRECEDENTED NEED FOR REAL-TIME DATA

High quality, real-time transaction data for the European economy is scarce. Increasingly, clients in government and business are moving away from traditional data sources, and levels of demand have increased further due to COVID-19. For investment funds alone, spend on alternative data sets is projected to reach $5bn by 2022 (Forbes, Dec 2019).

While several banks are already monetising data in some form, reports suggest only a very small number are currently maximising this opportunity. Significant premiums are available to the early entrants to this market.

5. ACCESS TO AN ETHICS-CENTRED SOLUTION

Data partnerships provide a mechanism to access revenues, at a low cost, with shorter timescales and reduced risk. Fable’s processes pass strict governance checks by European banks and card issuers. But we understand that banks need a wider business case, and partnerships must deliver more than numbers.

Fable Data is a mission-led business, and we supply data pro bono into government, central banks and leading universities to drive better economic decision making. Our data partners contribute significantly to the success of these activities – creating wider world benefit, with the opportunity to give increased support to their own national economies.

“Fable’s real-time data sets offer enormous potential for high-value

policy-relevant insights and analysis with strong academic rigour.”

John Gathergood, Associate Pro – Vice Chancellor, Nottingham University

The use cases and market for banking transaction data continue to grow exponentially. And there has never been a better time for banks to enter this market. Today, more than ever before, transaction data can deliver significant revenues alongside meaningful change in business and economic policy. If you want to understand the value in your data, Fable Data is a great place to start the conversation.

To find out more about the advantages of partnering with Fable Data, contact partnerships@fabledata.com