10 Fable Data learnings from the payments and Fintech industry
At Fable Data we have engaged with 250 EU Fintechs and banks over the past 2 years, here are a few things we have learnt…
Crowdfunding is an increasingly common source of fundraising alongside traditional institutional investment, as Fintechs capialise on their customer databases and brand strength.
The cash economies of Europe, principally Italy and Germany, are leap frogging technology generations. Consumers are shifting straight from cash to e-payments, and foregoing credit and debit card products completely.
Innovation is not limited to start ups. Some of the oldest finance brands in the world are pioneering the next wave of products. For example, Barclays Rise is a global community of 150 Fintech companies who have models ranging from receipt digitisation, mobile banking for entrepreneurs to collaborative task management and more.
Spain is the testing bed for technology that will target the global 1/2bn Spanish speakers. Our data partners in Spain all have their eyes set firmly on the Hispanic population in both North and South America for explosive growth.
Fintech innovation is increasingly about creating better customer experiences in new marketplaces which short cut traditional suppliers, but only some will create long term profits. For example, many digital platforms can connect higher risk borrowers with investors who are fed up with low yields, but only a limited number of marketplaces have generated profits so far.
Neobanks and Fintechs are only as strong as the weakest link in the complex payments ecosystem. Technical glitches within intermediate companies which sit between starts ups and card networks can cause company wide outages, meaning consumers are less likely to fully shift away from traditional payment methods.
GDPR is creating new market opportunities. The GDPR has sharpened data commercialisation practices pushing the market towards anonymised consumer data since data on identified customers must be collected and used with explicit consent. This creates a disruption opportunity for new entrants with a GDPR compliant business model.
The number of new entrants working with transactional data is growing exponentially. The effective monopoly on transactional data held by the card issuers and the legacy banks has been swept away by the Fintech revolution and the rise of the neobanks.
The global market is oversupplied with alternative data as vendors seek to monetise their data assets to investors who are hungry to find an edge. However, not all data is equal and many data sets lack quality signals. Consumer transaction data bucks that trend and is highly valued and scarce.
The role of the chief data officer in financial services is evolving. CDO’s are moving away from their traditional focus on governance toward business strategy and internal and external monetisation of their data assets, increasingly with P&L responsibility.
Fable Data is meeting the demand for European transaction data
The alternative data market is currently worth $1.5-2bn. By 2022 the global market it is expected to grow to $5bn or 10% of global research budgets as investors increasingly switch away from commoditised bank research to new more insightful sources of information in order to capture alpha (the active return on an investment). Demand is predominantly from US investors, who are now seeking to source alternative data globally, with Europe being a priority. Fable Data has launched in order to plug the gap of consumer transaction data in Europe
We work with technology and financial partners from across Europe building anonymous consumer data sets that are real-time, large scale, accurate and predictive. We can see the economy in real time, anonymously. There are many commercial applications for this data, and significant revenues to be generated for our partners.
We only work with data fully stripped of PII; we take no Personal Data and we have no interest in Personal Data. Fable data cannot be used to reverse engineer, identify or target an individual.
Data sources increase in value when they are aggregated together as the underlying consumer panel becomes less skewed and more predictive. A single source could be skewed towards certain customer segments, demographics or regions, but the breadth of our relationships ensures a stratified European sample which will command a premium over the individual data sources available today. We also increase the usability of the data by building user interfaces, merchant and ticker aggregations. We use artificial intelligence techniques to ensure our data is sorted and tagged with ever increasing accuracy. Our data science team interrogates the data to find predictive insights alongside our experienced portfolio managers and commercial finance team who understand the predictive utility in relation to the markets and corporate strategy.
The end result is long term high value and high margin revenue streams for our data partners and better data getting into the hands of decision makers leading to benefits for all.
Contact us to learn more about the value of your data assets.
Stephanie Goulden ACA, Business Development Director