Digital banking is constantly evolving, so both established financial institutions and new banks recognise the untapped potential of payment data. However, to truly unlock its value, this raw data needs to be enriched - cleansed, categorised, and transformed into actionable insights. In other words, they need to be put into an understandable form. Selecting the right provider for enhancing the raw data is crucial to ensuring your data delivers real, tangible results. Here's how to make the right choice for your business.
"Data is the new oil… it's valuable, but if unrefined it cannot really be used." - Clive Humby
What is Data Enrichment and Why Does it Matter
Simply put, data enrichment is the extraction of additional information by linking existing data to external sources without having to ask the customer for it.
A 2023 Accenture report found that 83% of consumers expect personalised services from their bank based on real-time transaction data. For banks, financial data enrichment can reveal deeper insights into client behavior, drive smarter business decisions, and improve fraud detection, risk assessment, and overall customer experience. Your clients also benefit from clearer insights, such as easier budgeting or automated savings recommendations, making it an important component for any proper Personal Financial Management tool. The key is finding the right partner to enrich your data and deliver these insights.
With multiple providers available today, how do you identify the one that aligns with your business goals? Let’s dive into six essential criteria to consider before you commit.
6 Criteria for Choosing a Perfect Provider
Aligning the expectations is a must-have
Your first step in choosing a data enrichment partner is aligning expectations. What specific value do you want to extract from enriched payment data? Whether your goal is improving customer experience, optimising fraud detection, or refining risk assessment, you need to define your objectives upfront and be very open about your intentions and plans.
A 2024 McKinsey study highlights that banks with clear alignment between their data strategy and business goals saw a 20% increase in customer lifetime value (CLTV).
A strong data enrichment provider doesn’t just meet your current needs - they should offer scalable solutions that adapt as your business grows. Be transparent in your conversations, communicate your expectations, and ask for examples of successful implementations from fintech companies like yours. Remember, you're not just picking a provider - you’re choosing a strategic partner committed to elevating your fintech initiatives to new heights.
Proof of concept with a raw data
The quality and depth of data enrichment are critical. When evaluating providers, ask for a Proof of Concept (PoC) to see how their enrichment process enhances your raw transaction data. The quality of this data is essential here.
A PoC serves as the litmus test for the efficacy of a data enrichment provider's capabilities. It allows you to witness firsthand how their technology aligns with your business objectives, providing a tangible demonstration of the value they bring to your financial operations. By collaborating on a POC, you gain valuable insights into the provider's ability to enhance your company's informational output within the limits of your specific industry. Look for key data elements like:
- Merchant name
- Logo
- URL Address
- GPS location
- Category (food, shoes, restaurants, etc.)
These are an absolute must, no matter what. The payment provider also supplies some data by default, such as the date and time of the transaction or the payment amount. In addition, there are many potential data points and solutions that, while not strictly necessary, can offer a unique behind-the-scenes look into your clients - helping you understand them better and offer additional services. These data points might include:
Providers that offer additional layers of information - such as business hours, customer reviews, or sustainability metrics - also open up new opportunities for your business. While some can only enrich a fraction of the data, others can handle most of it. But be cautious: more data isn't always better. Some providers focus on quantity rather than quality, leading to inaccurate insights. In this case, quality of data is everything and must be prioritised at all costs.
Since it is impossible to make good business decisions based on flawed data, a company should also be concerned about the quality and timeliness of the data provided. The data must be accurate, static knowledge bases are not acceptable for payments, and a combination of several different sources and algorithms for drawing and updating data is always ideal. A successful PoC will show whether the provider can offer real-time, accurate, and relevant data. Avoid those who rely solely on outdated methods, like focusing purely on MCC codes. Your business decisions need to be built on solid data.
Security and compliance
Data enrichment typically operates through APIs, meaning you’ll be sharing transaction data with third parties. Therefore, security and regulatory compliance are key.
Ensure that the provider does not require sharing sensitive personal data - only the identifiers necessary for enriching payment information. At a minimum, the provider should be compliant with GDPR and ideally certified under ISO 27001:2013, the global standard for information security management. Protecting your clients’ data and maintaining trust should always be non-negotiable.
Seamless integration
Integration is a critical factor when using a solution for payment data enhancement. The best providers offer smooth integration via APIs, allowing you to easily incorporate enriched data into your existing systems. Whether you need real-time updates at the moment of a transaction or batch data for analysis later, the provider should be flexible enough to meet your operational needs.
Ask questions about how the provider’s API works: How easily can it be adapted to your platform? Does it support the level of customisation your business requires? And, most importantly, will the enriched data flow seamlessly into your internal workflows without causing friction?
Value over price
When it comes to pricing, the cheapest option isn’t always the best. While in-house solutions may seem appealing, they can be costly and extremely time-consuming. Most companies prefer to work with external providers who specialise in data enrichment and can offer their unique expertise.
That said, when outsourcing, it’s essential to evaluate the return on investment. What value does the provider bring to your business? How will enriched data drive revenue or improve customer engagement? Balance cost considerations with the long-term value that high-quality data can deliver. It's never purely about the price of a service.
Experience and market reach
In addition to the criteria mentioned above, there are other things you can look at when choosing a payment data enrichment partner. When assessing potential providers, consider their experience in the professional field and their reach as a provider. How long have they been in business? What sectors do they operate in, and how well do they understand the specific needs of the fintech space?
Providers with a proven track record of enriching data across multiple markets will likely have more robust knowledge bases and advanced enrichment methods. Ensure they have experience serving businesses in your region and industry, as this increases the likelihood of successful implementation and support.
Final Thoughts: Trust but Verify
In the end, selecting the right data enrichment provider comes down to diligence. Don’t just rely on flashy presentations or promises - request a trial or PoC, verify the quality of their data firsthand, and evaluate how well they can integrate into your systems.
Additionally, resist the temptation to bundle multiple services from a single provider. Specialisation matters when it comes to data enrichment. Focus on choosing a provider that excels in this area to avoid ending up with a compromised solution.
About Tapix
Tapix has been on the market for over 8 years and offers tailor-made solutions for financial institutions (banks, fintechs, payment startups). It has enriched more than 5 billion transactions for clients like Raiffeisen Bank, UniCredit Bank, bunq, Twisto and others. The cloud-based Tapix API can be integrated in a matter of days. The company is GDPR compliant and ISO 27001:2013 certified.
Dateio, founded in 2013, is a fast-growing Czech FinTech with a mission to bring deeper insights to the modern banking consumer. What started as a platform of card-linked offers has become an integrated solution for banks to help retail banks significantly improve their customers' user experience.
Today, Dateio is a banking partner to several top banks in Europe and the Middle East, where it helps millions of users offer added value through an enriched transaction data and card-linked marketing platform. At the end of 2021, Dateio was awarded a Deloitte Technology FAST 50 CE and named the fastest growing Czech company by the Financial Times.
