Data Intelligence: The Competitive Advantage

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Data Intelligence: The Competitive AdvantageFind out how your financial institution can leverage data intelligence for a true competitive advantage.

E B O O K

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Table of Contents

Introduction 3

What is Data Intelligence? 4

What Are the Key Components of Data Intelligence? 6

How Does Data Intelligence Go Beyond Big Data? 8

What Problem Does Data Intelligence Solve? 10

How Does Data Intelligence Work? 12

How Can I Make the Most of Data Intelligence? 14

How Does Data Intelligence Empower Advisor-Investor Relationships? 16

Envestnet | Yodlee – A Leader in Financial Data Intelligence 18

Conclusion 19

© 2016 Envestnet | Yodlee.™  All rights reserved. Technology protected by one or more U.S. Patents or Patents Pending. Use subject to license terms. May include materials developed by third parties. Yodlee and the Yodlee Logo are trademarks or registered trademarks of Envestnet | Yodlee in the U.S. and other countries. All other trademarks mentioned in this document or website are the property of their respective owners.

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Introduction

Critical Questions on Data Intelligence: What if you could bring a customer’s entire financial life into focus on a daily basis?

What if you could show your customer how any transactional decision fits into their overall financial strategy?

What if the consumer changed their behavior as a result, leading to an improvement in their financial wellness and confidence in your organization?

There lies the promise of data intelligence.

The latest innovations in and extensions of data science embrace behavioral psychology and machine learning to automate chores, make personalized recommendations, and provide actionable advice. As a result, data intelligence has massive potential to change and shape financial habits and behaviors of individual consumers enabling better outcomes.

Data Intelligence: The Competitive Advantage

What is Data Intelligence?

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Data intelligence within the financial services industry is, in essence, the context of a consumer’s financial life and how it can be informed and enhanced from a perspective gained from transactional and goal-oriented data.

Data intelligence extends big data and data science, enabling organizations to use their wealth of data to drive better decisions, support product development, and derive value insight that can help customers materially change their behaviors for the better. It can be utilized to drive a more personalized and predictive user experience. Ultimately, data intelligence helps individual consumers by leveraging their financial data so it is put to use in a matter that is smart, relevant, and timely.

“The goal of data science is to predict and optimize; the goal of data intelligence is to create, change, and shape the world,”1

1 Higginbotham, Stacey. “Data Science Is Not Enough. We Need Data Intelligence Too.” March 20, 2013. https://gigaom.com/2013/03/20/data-science-is-not-enough-we-need-data-intelligence-too/2/

Data Intelligence: The Competitive Advantage

What are the Key Components of Data Intelligence?

DETECTSUGGEST

PREDICT

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An intelligent data engine can give customers a uniquely personal experience by making informed predictions about the future and providing easy-to-follow, actionable guidance. Data intelligence as operationalized in an intelligent data engine has three components:

Detect. Detection determines and identifies patterns in transaction clusters, examining both past and present data such as recurring transactions, income, risk patterns (NSFs), fees, and savings goals.

Predict. Algorithms create weighted measures across patterns and create new data structures that can be used for predictions, like predicting future cash flows and events that might make it difficult to meet savings goals.

Suggest. The prediction leads to a suggested action. A suggestion could consist of a reminder to transfer money from one account to another to meet an obligation, or a notification that an unusual spending increase in one category will affect future payments due.

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Data Intelligence: The Competitive Advantage

How Does Data Intelligence Go Beyond Big Data?

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Data intelligence leverages data science to give data its real power. By providing an analytics layer on top of the aggregation platform, data intelligence enables pattern and insight recognition to help:2

• Anticipate consumer financial needs

• Provide customers with the ability to create a uniquely personalized user experience

• Predict future activity and provide simple, actionable guidance

“The greater commitment an organization makes to its data intelligence program, the greater likelihood the program will make a substantive contribution to the success of the organization and thus be deemed a success itself.2

2 “2014 AFP Data Intelligence Survey - Association for Financial Professionals.” 2014 AFP Data Intelligence Survey - Association for Financial Professionals. Accessed March 10, 2016. http://www.afponline.org/publications-data-tools/reports/all-surveys/Details/data-intelligence-2014

Data Intelligence: The Competitive Advantage

What Problem Does Data Intelligence Solve?

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Digitally savvy consumers today demand more actionable and intuitive user experiences from bank technologies. As a result, the financial services industry is focused on technology innovation that allows for a more personalized and predictive customer experience.

By extrapolating new meanings from data, data intelligence enables financial institutions to tailor the experience, products, and guidance for each consumer’s unique situation. Consumers benefit by gaining the knowledge and resources they need to solve their financial challenges and move ahead.

“Advanced data analytics greatly increases value creation through improved customer understanding and higher-quality lead generation.”3

Boston Consulting Group

3 Grebe, Michele et al. Al Young, Hunter. “Retail Bank Operational and Digital Leaders Reap the Rewards,” May 10, 2016.https://www.bcgperspectives.com/content/articles/financial-institutions-technology-digital-retail-bank-operational-digital-leaders-reap-rewards/

Data Intelligence: The Competitive Advantage

How Does Data Intelligence Work?

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Data intelligence leverages data to provide understanding of behaviors, preferences, and profiles. From a consumer perspective, data intelligence puts daily transactions in the context of all spending, saving, and investing goals. But data intelligence goes far beyond providing a balance. It can actually inform how those three areas interact and show how decisions made in one area potentially affect the others. Further, financial systems that employ data intelligence can make informed predictions based on behavior in order to produce decisions that further the goals of businesses and their consumers.

“Companies that put data at the center of the marketing and sales decisions improve their marketing return on investment by 15 – 20 percent.”4

4 Gordon, J. “Bit Data, Analytics And The Future of Marketing And Sales.” Forbes. July 22, 2013. Accessed August 18, 2016. http://www.forbes.com/sites/mckinsey/2013/07/22/big-data-analytics-and-the-future-of-marketing-sales/#3f5ba7be344d

Data Intelligence: The Competitive Advantage

How Can I Make the Most of Data Intelligence?

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When looking at the mass of data commonly referred to as big data, consider how to take advantage of it – beyond the ability to report across an organization. Bring an intelligence to all the data that is collected, organized, and delivered by answering these questions:

• Who are the individuals most likely to benefit from the use of big data?

• Where do we obtain quality data?

• When and where do we deliver data and insights?

• What insights can our institutions and customers gain from data?

• How can we help consumers gain additional insight to better their lives?

5 Mohan, Bauer, T., L. Fiedler, J. Jacobs, and D. Spillecke. “The Secret to Great Marketing Analytics? Connecting with Decision Makers.” McKinsey on Marketing & Sales. Accessed August 18, 2016. http://www.mckinseyonmarketingandsales.com/the-secret-to-great-marketing-analytics.

“To add real value, marketing analytics solutions have to answer the questions on the minds of important decision makers and be part of their day-to-day work.”5

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Data Intelligence: The Competitive Advantage

How Does Data Intelligence Empower Advisor-Investor Relationships?

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ADVICE

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Giving a consumer the power to holistically view their finances and see the implications of their behavior from one sphere to another is one thing. Providing the same holistic view to the consumer’s financial advisor extends the power of intelligence to the nth degree.

With access to the same transactional context as their client, advisors can better understand their client’s financial choices and tradeoffs. They can then provide increased value to their client by tailoring their advice and guidance accordingly. The conversation becomes more creative and potentially lucrative for both client and financial professional alike.

“Advisers with a pulse will always have an edge in emotional intelligence and the ability to help protect clients from their own worst instincts, but they will need to make the best use of those advantages to create real value on the clients’ terms.”6

6 “White Paper: Attack of the Robo-Advisors | Yodlee.” Envestnet | Yodlee. 2016. Accessed August 18, 2016. https://www.yodlee.com/resources/whitepaper/attack-of-the-robo-advisors-how-the-digital-revolution-is-disrupting-wealth-management/

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Envestnet | Yodlee – A Leader in Financial Data Intelligence The Envestnet® | Yodlee® Data Intelligence engine enables financial institutions to query aggregated transaction-level data from bank accounts, investments, bills, credit cards, and more. This enables financial institutions to analyze data insights from consumer and small business segments and create highly customized programs, offers, apps, and services that meet real-time customer demand. Meanwhile, predictive analytics and other data-intelligence techniques provide consumers with the actionable guidance they need to optimize their financial lives.

From acquiring customers and deepening relationships to mitigating risk, Envestnet | Yodlee Data Intelligence can help financial institutions harness the true power of their data, the main source of their competitive advantage.

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Conclusion

Envestnet | Yodlee’s scale, depth, and breadth of quality data combined with intelligent tools provides an unparalleled data intelligence capability. By leveraging Yodlee Data Intelligence, any provider can enable its customers to make better financial decisions and experience better outcomes. Data on it’s own is nothing. But when backed by intelligence, data has the power to change the future, both for financial institutions, and for their consumers.

How can I learn more?

• Download the whitepaper: “Critical Questions on Data Intelligence for Financial Institutions”

• Download the eBook: “Best Practices for Driving the Fintech Digital Revolution”

For more information, visit: www.yodlee.com.

Global Headquarters: 3600 Bridge Parkway, Suite 200, Redwood City, CA 94065T: +1 650 980 3600, www.yodlee.com

© 2016 Envestnet | Yodlee.™ All rights reserved. Technology protected by one or more U.S. Patents or Patents Pending. Use subject to license terms. May include materials developed by third parties. Yodlee and the Yodlee Logo are trademarks or registered trademarks of Envestnet | Yodlee in the U.S. and other countries. All other trademarks mentioned in this document or website are the property of their respective owners. Yodlee 442 09/16