When a user logs onto their bank’s digital platform, they expect to see a simple list of all their transactions. They’re accessing their financial data as a quick reference in the midst of a busy life, and they need crystal clear details about their spending. The reality is the transactions appear as a jumbled mess. Stings of extra letters, numbers, and non-standard abbreviations that provide baffling descriptions. These transactions are a poor means of communicating the merchant name and location. So what does a user do when they see a transaction that’s confusing or seems fraudulent?
In most cases, a customer calls their bank to inquire about unclear transactions. If the customer service is difficult to reach or the user is tech savvy, they may file a fraud claim or dispute the charge.
On average, it costs $4 for each teller or call-agent interaction. Typically, the user learns over the phone that their transaction is legitimate, but they simply weren’t able to decipher the raw transaction data on their own. In cases where the user files a claim on a legitimate transaction, this leads to even more costs, time, and headaches for the user, merchant, and institution.
David Nohe, CEO of FinGoal explains, “When you are confused about a transaction, you call up your institution. And the best case is that the call agent knows what it is, or they Google it for you, and they tell you what it is and you smack yourself in your head and you're like, oops. Now you're just embarrassed, and you wasted your time, right? That's the best case.”
“The worst case is that it's still a valid transaction, but nobody knows what it is. And so you dispute it and even more money is spent on the process — multiple humans are looking at it. The merchant gets involved, and it’s a mess,” he said.
There is no arguing that transaction data in its raw, unfiltered state is hard for end users to understand. In an MX survey of over 1,000 users, 71% of users feel frustrated from unclear transaction data at least once per year, and 48% feel frustrated at least twice per year. So, even if a user only calls two times each year with a question, that’s $8 down the drain for institutions, plus you have a customer with a poor user experience and numerous pain points.
In contrast, transaction data enrichment costs an average of around $0.05 per user per month to transform that confusing data into clean, easy to understand transactions. Which means, transaction data enrichment has an astounding ROI. And that’s just in terms of cost savings. The improved user experience and increased customer satisfaction has an additional level of value.
Nohe said, “It easily pays for itself because you're talking about paying at the high end a nickel per user, per month for transaction cleansing. And even if you save one call per year per user, you just got a 10 times return on that investment. That's a no brainer for banks, credit unions, and credit card companies – anybody that's in the business of card transactions.”
But transaction enrichment can have benefits beyond just cleaning up hard to understand data. Enrichment can add supplemental fields that further enhance the user experience such as merchant name and logos, location, categorization, and even social media posts from the merchant.
These added features can create endless possibilities for institutions. Transaction data in its raw state doesn’t tell us much about the user and their spending habits. But when it is analyzed and enriched, institutions can build personalized experiences from advice users receive to the promotions being delivered to them. Enriched transaction data is the first step institutions must take to begin personalizing their banking experience. Not to mention, it boosts user engagement, as well.
Institutions large and small are looking to quickly integrate transaction data enrichment solutions, and for good reason. But the institutions that aren’t prioritizing cleaned and enriched transaction data will soon be facing other costs aside from heavy call center outreach. 33% of 16 to 35-year-olds are open to switching banks in the next 90 days. Users, especially those on the younger end, are becoming less loyal. If users continue to have negative experiences with their bank and its digital channels, they are very willing to switch banks for an improved experience.