# Understanding the realities of payment data monetisation Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-07-15 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: Redefining Payments Data Monetisation: Expectations vs. Meta Description: Discover why banks aren't easily monetising payments data as expected. Learn how leveraging data improves operations and drives new revenue opportunities. URL: https://financedigest.com/understanding-the-realities-of-payment-data-monetisationhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/sbi-300188025-jpg-1736838174373-compressed.jpg) _By **Toine van Beusekom,** Strategy Director, Icon Solutions_ The number of banks identifying payments data monetisation as a key strategic priority has [doubled](https://iconsolutions.com/research-expectation-versus-reality-for-payments-data-monetisation/?utm_source=iseepr&utm_medium=blog&utm_campaign=MonetisingData&utm_term=MonetisingDataWebinarblog) in the [past two years](https://iconsolutions.com/research/paymentstransformationrace/?utm_source=iseepr&utm_medium=blog&utm_campaign=MonetisingData&utm_term=MonetisingDataWebinarblog). The growth of real-time payments (RTP), ISO 20022 migration and open banking regulations have provided the carrot, while thinning margins and intense competition from fintechs have provided the stick. Yet, it is clear that banks’ expectations don’t always match the reality when it comes to payments data monetisation. Time for a [reality check](https://www.financedigest.com/marketmind-reality-check.html "Marketmind: Reality check"). **EXPECTATION: Payments data is easy to monetise** **REALITY: Payments data isn’t inherently monetisable** We have all heard the cliché that [data is the new oil](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data"), but although payments data is increasingly seen as a core strategic asset by banks, it is not easily commodifiable. As Krystal Ritchens, Executive Director, Head of EMEA [Payments Industry](https://www.financedigest.com/how-the-epa-plans-to-boost-confidence-in-the-uk-payments-industry-post-brexit.html "How the EPA plans to boost confidence in the UK payments industry post Brexit"), Regulatory and Network at J.P. Morgan noted [in our recent webinar](https://iconsolutions.com/webinars/expectation-versus-reality-for-payments-data-monetisation/?utm_source=iseepr&utm_medium=blog&utm_campaign=MonetisingData&utm_term=MonetisingDataWebinarblog): “You hear the term payments data monetisation thrown around, but you can’t actually take someone’s data and sell it back to them…and you can’t sell it to a third party.” Rather, the [value of payments](https://www.financedigest.com/2021-predictions-realising-the-value-of-payments-transformation.html "2021 Predictions: Realising the Value of Payments Transformation") data comes from leveraging it to improve operations, products and services. With corporate clients increasingly demanding solutions that make their lives easier, more predictable and fault free, leveraging data to increase operational efficiencies is how [banks can unlock new revenue opportunities](https://www.financedigest.com/uk-retail-banks-is-irrelevance-curtailing-opportunity.html "UK Retail Banks: Is Irrelevance Curtailing Opportunity?"). Thomas Halpin, Managing Director, Global Head of Payments Product Management, Global Liquidity and Cash Management, HSBC, [explains](https://iconsolutions.com/icon_in_the_news/finextra-tv-interview/?utm_source=iseepr&utm_medium=blog&utm_campaign=MonetisingData&utm_term=MonetisingDataWebinarblog) that “there will be an aggregation to the banks providers who do this best \[…\] and simplify the experiences.” **EXPECTATION: Banks need to create new services for corporates** **REALITY: It’s all about doing the basics in real-time.** There is a perception that payments data monetisation equals secret sauce algorithms and raiding campuses for PhD data scientists. And while innovation is undoubtedly important, a recent report examining failed data projects in banks found that the inability to derive value was due to an “ [infatuation with data science solutions](https://sloanreview.mit.edu/article/why-so-many-data-science-projects-fail-to-deliver/)”, where overly-complex approaches did not meet the actual business need. Put simply, banking doesn’t need to fundamentally change. The gap in expectations, however, is in the speed of services. For example, corporates still want cash balances. The difference is that they expect them in real-time, not at the [end of day](https://www.financedigest.com/shanghai-finds-cases-after-five-days-of-zero-covid-but-end-of-lockdown-on-track.html "Shanghai finds cases after five days of ‘zero COVID’ but end of lockdown on track") with intraday forecasting. And they want information to be available to them on a Sunday afternoon, not just Monday to Friday. Rather than investing resource in moonshot data projects (which may also serve to unnerve [customers and regulators as global data](https://www.financedigest.com/manchester-arts-centre-the-lowry-selects-logpoints-siem-technology-to-safeguard-customer-data.html "Manchester arts centre The Lowry selects LogPoint’s SIEM technology to safeguard customer data") privacy laws tighten up), attention should be focused on executing the basics really well. This means banks doing what they are already doing, only in real-time, 24/7 and cheaper. Standardisation in the form of ISO 20022 is foundational for this process. **EXPECTATION:** **Corporates will pay for** [data services](https://www.financedigest.com/can-financial-services-organisations-harness-data-and-bi-to-catch-up-in-the-digitalisation-race.html "Can financial services organisations harness data and BI to catch up in the digitalisation race?  ") **REALITY:** **Many services have already become table stakes, but opportunities remain.** Demand for value-added services and willingness to pay for them are not the same thing. Previously, corporates were less willing to try third party-providers so accepted deficiencies in the [bank offering](https://www.financedigest.com/first-abu-dhabi-bank-could-renew-35-billion-offer-for-stanchart-bloomberg-news.html "First Abu Dhabi Bank could renew billion offer for StanChart -Bloomberg News"). However, fintechs are changing this attitude. [Customer retention is now much harder for banks](https://www.financedigest.com/christmas-debt-hangovers-how-banks-can-help-customers.html "CHRISTMAS DEBT HANGOVERS: HOW BANKS CAN HELP CUSTOMERS"), with 69% of corporates indicating they would switch providers for a better service. With this increased competition, [services that have been earmarked as revenue](https://www.financedigest.com/adding-revenue-through-rd-tax-relief-service-2.html "Adding Revenue through R&D Tax Relief Service") generators have become ‘table stakes’ so should actually be seen as churn preventers. For example, corporates do not expect to pay for services such as virtual accounts and ISO 20022 compliance [support and will walk to access](https://www.financedigest.com/supporting-a-fair-and-resilient-society-by-protecting-access-to-cash.html "Supporting a fair and resilient society by protecting access to cash ") them. But there are still opportunities. The demand for real-time is reflected by the fact that 84% of corporates are willing to pay for real-time cash balances, and 70% would pay for a single real-time [balance dashboard across multiple bank](https://www.financedigest.com/risk-of-uk-balance-of-payments-crisis-under-truss-is-rising-deutsche-bank-warns.html "Risk of UK balance of payments crisis under Truss is rising, Deutsche Bank warns") partners. There is also a clear need for enhanced security and [fraud prevention](https://www.financedigest.com/payroll-fraud-and-how-to-prevent-it.html "Payroll fraud and how to prevent it"), with 74% of corporates willing to pay for the experience and technical know-how that banks can offer. **EXPECTATION: Revenue growth through offsets [investment in payments data](https://www.financedigest.com/investing-in-the-future-with-alternative-web-data.html "Investing in the future with alternative web data") monetisation** **REALITY: [Banks need to dramatically reduce costs](https://www.financedigest.com/factbox-global-banks-take-axe-to-jobs-as-cost-pressures-mount.html "Factbox-Global banks take axe to jobs as cost pressures mount") as well** The fact that many services have already become table stakes is wake-up call for banks who imagine there is a lot of easy [money to be made through data](https://www.financedigest.com/your-money-is-safe-but-your-data-might-not-be.html "YOUR MONEY IS SAFE, BUT YOUR DATA MIGHT NOT BE"). [Banks must be realistic about the revenue opportunities](https://www.financedigest.com/challenger-banks-missing-golden-opportunity-to-steal-business-from-competitors-by-repeating-same-old-mistakes.html "Challenger Banks Missing Golden Opportunity To Steal Business From Competitors By Repeating Same Old Mistakes"). This requires a clear vision to identify where banks want to compete across the value-chain (and where they don’t!) and the business rationale for doing so. It is then far easier to align technology roadmaps with the business objectives, and ensure capabilities match the strategy. However, banks should be under no illusions that they also have to dramatically lower the cost of delivering standardised, accurate and complete payments data in real-time. Cloud technologies will be integral to this process, and deliver the flexibility, agility and scalability that outdated legacy infrastructure simply cannot provide. And given that most of those back-office processes firmly live in the commoditised part of the value chain we are talking about factors, not percentages. **EXPECTATION: Payments data monetisation is a stand-alone product initiative** **REALITY: [Data monetisation is a strategy](https://www.financedigest.com/investing-in-a-first-party-data-strategy-can-save-the-day-for-retailers.html "Investing in a first-party data strategy can save the day for retailers"), detailing a clear partnership approach** The real long-term objective for payments [data monetisation initiatives should be to move](https://www.financedigest.com/exclusive-binance-moved-346-million-for-seized-crypto-exchange-bitzlato-data-show.html "Exclusive-Binance moved 6 million for seized crypto exchange Bitzlato, data show") the relationship with corporate clients away from banking being about consumption of products, towards acting as true partners for customers. As Kieran Hines, Senior Analyst at Celent explains: “The opportunity for banks in payments data monetisation is in adding value in a number of different ways.” Shifting to a partnership [approach requires flexibility and innovation from a business model](https://www.financedigest.com/new-charitable-commission-sharing-model-is-for-lifeprice-comparison-website-launch-bolstered-by-innovative-approach.html "New charitable commission-sharing model is for lifePrice comparison website launch bolstered by innovative approach") perspective. By embracing collaboration with fintechs and specialist third-party providers, banks can focus on their core competencies while tapping innovations from across the [payments ecosystem to enable the delivery of a range of best-in-class services](https://www.financedigest.com/igtbs-payments-services-hub-faq.html "iGTB’s Payments Services Hub – FAQ") through a single provider. [**Back to basics**](https://www.financedigest.com/investors-go-back-to-basics-with-simpler-self-driving-vehicles.html "Investors go back to basics with simpler self-driving vehicles") In the Netherlands we have the expression: The course ‘Dealing with disappointment’ has been cancelled again. You don’t need a rulebook (or course) when expectations do not match reality. You reset, go back to basics and do what you’re good at. Which for banks, means offering trust, advice and standardised information. Just in real time. _To learn more, download research report ‘Expectation versus Reality for Payments Data Monetisation’_ [_here_](https://iconsolutions.com/research-expectation-versus-reality-for-payments-data-monetisation/?utm_source=iseepr&utm_medium=Blog&utm_campaign=DataMonetisation&utm_term=MonetisingDataWebinarblog) _._ --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---