Data-driven insights can be invaluable for businesses – and improve financial inclusion in a world where 2.5 billion people still have no access to financial services

Relevance and personalisation are delivered by data-driven insights; this is one of the new truths of business. As a mathematician and statistician this appeals to my inner geek; I enjoy numbers, patterns and formulas. For many years it wasn’t a “cool” thing to admit but now in the 21st century the geeks have inherited the earth and technology has penetrated every part of our lives. Thanks to the ubiquity of technology those same numbers, patterns and formulas that I learnt to love are opening new doors and delivering data insights that are changing the face of business and commerce.

Patterns and predictions can influence every part of our lives. What particularly interests me is how insights can deliver impact and influence in real world applications. I see the power of data every day, because we use it to inform our own business decisions at MasterCard. We use it as a route to identify areas for growth, address concerns, to understand our audiences and to drive social good on a global scale.

Of course, we are not alone; the use of data to inform business decisions is nothing new. What is different today is that ubiquitous technology I referenced earlier. Whether it’s looking for the best deal on your next holiday at home on your tablet, buying a coffee with your smartphone or simply keeping abreast of news in other parts of the world via Twitter or Reddit, the world has changed and this has opened an opportunity to connect with people and businesses globally, in a far more relevant way. This new deeper understanding is driving growth – and more businesses need to seize the moment and be part of the new data driven opportunity.

Post-recession there has been a seismic shift in consumer spending habits and for businesses; this has amplified competition across all sectors. Insights into consumer spending, derived from data, are increasingly valued by businesses in order to understand their competitors, differentiate themselves and ultimately drive growth. We no longer live in a world where business can create products, services, destinations and experiences that are driven by an identification of demand. Make it matter to me, make it work for me, make it for me is the mind set of our global consumer and in return we not only need to listen but we need to help make this a reality. While it is valuable to look at broad demographics, to see an audience by geography or age group; in today’s world we are all a “segment of one” or smaller and to engage me you have to listen, learn, personalise and reinvent; while balancing this with my right to privacy.

We can do that at MasterCard; every day our network handles payments for two billion cardholders and tens of millions of merchants in over 210 countries around the world. These transactions or payments generate real-time data on a global scale, available faster than regular government statistics. The data we see is not personally identifiable data but by understanding what it tells us, we can create highly sophisticated macro-economic indicators that can inform business, retailers, governments and more can be used to help inform their business decisions.

One of the fastest growing areas of our business is how we use aggregated data on spending patterns found in the payments we process to help our partners and customers build more relevant and tailored solutions, products and experiences. For businesses, who excel at capturing and analysing their own customer data, our macro-level data insights applied to their data can illustrate what happens next, outside of their company, across the market. By sharing these insights, we can give them an edge over their competitors, helping them to provide the optimum experience for their customers.

A good example is some research MasterCard recently commissioned into travel trends. As a globally connected business, we wanted to look at how consumers spend across 135 cities around the world. MasterCard’s fourth annual Global Destination Cities Index found that London was the world’s top travel destination for consumer spending, with a projected 18.7 million international visitors in 2014 which equates to an £11bn injection into London from the tourism industry alone. Our report showed us the countries from where these visitors were coming, identified the travel corridors that link cities and much more. This kind of information is valuable to a huge range of businesses as well as local authorities and governments who can plan for an influx of tourists within a city as well as enabling business and government to plan for the year ahead.

Alongside this we can also look at how global events give us an opportunity to identify insights. This year the World Cup took Brazil by storm and we were able to draw some particularly interesting trends and analysis. In advance of the big events many expected all spending to rise, particularly for items connected to the event. Instead, through MasterCard’s data and analytics we were able to see a spike in spending in Brazil on groceries and a drop in spending on luxury goods. This kind of economic insight can be of significant value to brands with larger single items costs, by enabling them to better plan promotional windows.

Data-driven insights are also vital for our own commercial success and they inform how we drive growth. MasterCard’s vision of a world beyond cash is well publicised and the benefits for business, government and all of us are endless our data and insights help us understand the way we pay and the barriers around the shift from cash and paper to not only deliver against this vision but also to enhance the customer experience. One of the many things we have identified is that while there are unifying themes, like safety and security and ease and speed there are also local considerations that we are able to take into consideration when building next generation products and solutions around the world.

Insights generated from data demonstrate an opportunity to grow our business among small and medium-sized enterprises (SMEs) too. Globally, some 80% of SMEs don’t have access to full banking services, even in developed economies. Our simplify commerce platform can help an SME set up from scratch in 15 minutes, enabling them to start selling over the internet and accept card payments. Without big data on the needs of SMEs we may never have identified this opportunity for growth.

Data-driven insights are not just valuable for business; it also has an exciting role in driving social good. As president of international markets, I manage around 60% of MasterCard’s business worldwide, so the expansion of e-commerce, m-commerce and innovative payment technology driving growth in emerging markets is extremely important to me. We use data-driven insights to understand how people spend money around the world and identify where people are falling through the gaps in the financial system. For example, we know that 2.5 billion people are still without access to financial services – this is unacceptable.

There is a perception that this is just a developing world issue, but that is not the case. Our data shows us there are 93 million people in Europe that don’t have access to basic bank accounts or financial products. Take Italy for example, where 25% of Italians are underserved and don’t have access to basic electronic payment. Families are left crippled in a world without access to sustainable financial services whether it is savings, social credits or insurance. Our data insights help us determine how we support people that are experiencing different aspects of financial exclusion in every market that we operate. We can work to engage these marginalised audiences in each market, helping people improve their lives by providing opportunities for access to essential financial services. Governments in these countries can also use this information to build better financial systems and encourage people to become more included in these systems. This marks a step forward for good in the way big data is used.

The value of data-driven insights as a significant source of competitive differentiation to MasterCard will come as no surprise. But, I believe big data has the potential to transform people’s lives for good globally and the capability to drive social change, supporting transformational innovation and growth in developing countries. There is a need to drive financial inclusion across the world and data can play a part in making a real difference, the opportunity is there for the taking we just need to embrace the change.

Ann Cairns is president of international markets at MasterCard

Source: The Guardian, January 20, 2015