# Digital Payments: An Explosion of Emerging Opportunities
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-01-20
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Unlocking the Power of Digital Payment Data
Meta Description: Discover how digital payments players are leveraging data to drive innovation, create better customer experiences, and unlock new opportunities in the banking
URL: https://financedigest.com/digital-payments-an-explosion-of-emerging-opportunitieshtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/g-scaled-1736838629744-compressed.jpg)

_By_ _**Deborah Baxley,** Financial Services Enterprise Industry Consultant at Teradata_

Digital payments players have massive amounts of data to pursue an explosion of emerging opportunities. In the prescient words of HSBC’s former chairman Douglas Flint back in 2015, “It is clear that many who want to get into the payments industry don’t really want to get into the payments industry. What they want to get into is the industry of gathering individual customers’ payment [data](https://www.financedigest.com/understanding-the-realities-of-payment-data-monetisation.html "Understanding the realities of payment data monetisation") to monetise it and realise its value.” There is tension between traditional payment players, Big Tech and FinTech, as the latter strive to enter banking and payments – they’re looking for the data.

According to [McKinsey](https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/tracking%20the%20sources%20of%20robust%20payments%20growth%20mckinsey%20global%20payments%20map/global-payments-report-2019-amid-sustained-growth-vf.ashx), digital payments generate roughly 90% of a financial institution’s useful customer data. This [data is precious fuel](https://www.financedigest.com/wall-st-ends-lower-treasury-yields-slide-as-data-fuels-recession-jitters.html "Wall St ends lower, Treasury yields slide as data fuels recession jitters"), igniting the ability to attract more and more data, creating a virtuous circle of better understanding customers’ needs, building better products, attracting more customers and proactively promoting new value propositions within the emerging payments and banking ecosystem.

With the amount of [payment data](https://www.financedigest.com/is-monetising-data-the-key-to-competing-in-payments.html "Is monetising data the key to competing in payments?") growing in most markets, the opportunity to leverage that data is world-wide. Mature markets, such as U.S. and Canada, are largely card-based. Other markets, such as China, India and Kenya, are at the forefront of innovation in payments, experiencing almost exponential growth in new payment methods such as account-to-account transfers, [instant payments](https://www.financedigest.com/the-latest-trends-in-instant-payments-and-how-they-impact-banks.html "The latest trends in instant payments and how they impact banks") and “invisible” payments on a holistic platform that offers consumer services ranging from ride share to food delivery, as with AliPay. All of these [markets are generating a treasure trove of transaction data from which valuable insights](https://www.financedigest.com/heightened-interest-in-global-cuisines-to-brighten-the-expansion-prospects-of-herbs-and-spices-manufacturers-industry-predicted-to-rise-at-3-6-cagr-future-market-insights-inc.html "Heightened Interest in Global Cuisines to Brighten the Expansion Prospects of Herbs and Spices Manufacturers: Industry Predicted to Rise at 3.6% CAGR | Future Market Insights Inc. ") can be drawn.

![Deborah Baxley](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/1517694726948-1736838629320-compressed.jpg)

Deborah Baxley

The biggest challenge is that organisations can’t fully exploit the [power of this data](https://www.financedigest.com/power-to-the-people-how-consumers-are-calling-the-shots-when-it-comes-to-data-privacy.html "Power to the people: how consumers are calling the shots when it comes to data privacy") because it exists in individual data silos. Legacy data architectures are the result of organisational silos, [product instead of customer](https://www.financedigest.com/sports-and-athletic-insole-market-players-eye-custom-and-3-d-printed-products-for-performance-optimization-says-future-market-insights.html "Sports and Athletic Insole Market Players Eye Custom and 3-D Printed Products for Performance Optimization, Says Future Market Insights") focus and a failure to consider reuse. These factors impair the ability to exploit ALL their payments data, also known as “Pervasive Data Intelligence.” As a result, payments players struggle with visibility into the end-to-end customer [journey](https://www.financedigest.com/how-to-navigate-a-seamless-journey-from-cio-to-chief-customer-officer.html "How to navigate a seamless journey from CIO to Chief Customer Officer") spanning multiple customer touchpoints across multiple departments, the inability to sense and react to a multitude of customer pain points and opportunities and personalising customer interactions in real-time at moments of truth. According to [Forrester](https://www.forrester.com/report/The+US+Banking+Customer+Experience+Index+2019/-/E-RES155817), customer experience focus in banking is relatively rare, so a huge financial upside awaits companies that substantially transform their organisations to center on the customer.

A broad spectrum of business outcomes benefit from aligning the data needs of marketing, [customer service](https://www.financedigest.com/how-can-financial-firms-improve-customer-service-after-the-pandemic.html "How Can Financial Firms Improve Customer Service after the Pandemic?"), credit risk, security and fraud. Joining these data silos across fraud, authentication, credit risk, customer behaviour and payment transactions [delivers tremendous returns](https://www.financedigest.com/asset-management-firms-are-using-ai-to-deliver-higher-returns-for-investors.html "Asset management firms are using AI to deliver higher returns for investors"). Think of it as marrying the “dark” and the “light” side of the data to the [shared benefit](https://www.financedigest.com/the-benefits-of-purchasing-fractional-shares-you-should-know.html "The Benefits of Purchasing Fractional Shares You Should Know") of both sets of situations in which a service can be applied. Examples include:

1. Using behavioural data both to customise [offers and also to identify suspicious anomalies that indicate fraud or account takeover](https://www.financedigest.com/germanys-slm-recommends-shareholders-accept-nikon-takeover-offer.html "Germany’s SLM recommends shareholders accept Nikon takeover offer")
2. Employing credit risk data to support new products like “Buy Now [Pay](https://www.financedigest.com/rapidly-evolving-buy-now-pay-later-finance-drives-retail-growth.html "Rapidly evolving buy now pay later finance drives retail growth") Later,” and also to predict delinquencies and optimise collections
3. Accessing geolocation data for personalising offers, detecting fraud and [improving customer](https://www.financedigest.com/improving-customer-experience-and-profits-with-embedded-payments.html "Improving customer experience and profits with embedded payments") convenience by eliminating passwords

Proper orchestration in a central platform with renewable data and [analytics](https://www.financedigest.com/the-importance-of-data-analytics-for-success.html "The Importance of Data Analytics For Success ") unleashes the power of all this data, pulling together data from throughout the enterprise. This is “The Infinity Loop” – the more data, the better joined-up it is, the more effective. See more at “Data Orchestration at Hyperscale.”

Subsequent posts in this series explore how to leverage [payments data at every turn to generate revenue and profit by driving more payments, retaining customers, integrating with emerging value propositions, partnering with new players in the evolving payments ecosystem to avoid disintermediation and seed future](https://www.financedigest.com/the-future-of-payments-biometrics-within-the-financial-ecosystem.html "The Future of Payments: Biometrics Within the Financial Ecosystem") growth, and apply real-time loss mitigation.


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---