Insights Are Only As Powerful As The Data Driving Them
With an economy that is rapidly changing and consumer behavior that can seem as erratic as a squirrel crossing the road, many businesses and industries are walking a fine line between treading water and staying ahead of the trends. The good news: you can make sense out of the madness. It’s so critical to rely on data-driven insights and knowledge to help make informed decisions that impact the future state of your organization. Of course, data and analytics are accepted universally as a key component to the overall business strategy, but the key here is the data itself. How accurate? How timely? Can valuable insights be lifted from the data? It’s important to remember that business insights are only as powerful as the data driving them. Chefs know that if you want the tastiest meal, you have to use the best ingredients. This concept is the same for business insights.
Take Stock. Restock Where Necessary
For Chief Information Officers (CIO’s) who are taking stock of their Data and Analytics program in 2017, it’s important to pay close attention to three areas in your business. The first is speed. Regardless of industry, you should look at how quickly the data is accessible and how current the data is with which you’re working. A bank wouldn’t rely on outdated credit information before originating a credit card to a consumer, and neither would you. The expectation now is that any consumer journey should be a more frictionless experience, from start to finish. There is no time to stall at any point in the process. Data driven analytics help enable businesses to make the right offer to the right consumer at the right time. For example, consider a consumer who is signing up for a private label credit card in order to save 20 percent off their purchase. It’s imperative that the merchant run a thorough risk screening on the consumer before the credit is approved and the appropriate credit limit is issued. The process should be quick and frictionless in order for the consumer to get on with the day. The longer the process, the more likely the consumer might abandon the transaction.
Data is great, but lifting powerful insights from the data is what set companies apart
The next is source. Where is your data coming from? Is it directly sourced or surveyed? The closer to verified truth from which the data is pulled, the more you can rely on it as the basis for informed decisions. Prior to the 2008 recession, a number of mortgages were approved on the basis of stated income, where the borrower stated how much they made but didn’t have to provide proof. Regulations have changed and now lenders need to verify that consumers have the ability to repay. However, even when paystubs have been provided to the lender it still may not be adequate. First of all, there may be fraud. Consumers have access to websites that can generate a fake paystub. Second, according to an Equifax analysis using our employer-reported payroll income verification database (The Work Number®) for an auto lender, we discovered that a large percent of the loans on which the lender used income and employment from only borrower-provided documentation had overstated income by more than 10 percent and a larger amount had overstated their tenure with their employer. According to the approximately 200,000 sampling, the performance of these loans was poor relative to loans with accurately verified income and employment data. Directly-sourced data is a necessary component for helping generate powerful, reliable insights.
The third is actionable. This word is so important, but often overlooked. Let’s say you have powerful data and analytics technology. Now what? Is your program set up in a way that makes the data digestible, informative and even predictable? Are you able to derive relevant insights from your data? A data department that generates powerful insights for the company can help propel the business forward. The ability to leverage trended data is a great example of this. Think about it this way: If you’re the Chief Marketing Officer (CMO) at a cable company, wouldn’t it be valuable if you had predictive analytics that could help determine where consumers are more likely to move and when? This mover propensity insight could aid to streamline your marketing efforts in order to better capture the right consumers, therefore save the company money and increasing their customer base. Or, think about the power of an advertising executive at a car company using consumer aggregated income data layered against a pay TV provider subscriber base, in order to help determine—which viewers might afford a Ford and who might afford a Ferrari? This is an insight that can greatly help streamline the advertising investment to narrow the audience. Data is great, but insights are what help drive Return on Investment (ROI).
Turn Complexity into Clarity
Data is great, but lifting powerful insights from the data is what set companies apart. It’s the “so what” and “now what” needed to stay relevant, grow and evolve. While it’s widely agreed that insights are indispensable, it’s not a one-size fits-all process. There are options out there that can take the complexity of data and analytics and create more configurable solutions that helpright-fit business needs. Whether it’s robust, raw data you’re seeking, a configured solution to help solve your unique business challenges, or a turnkey app, companies like Equifax offer a portfolio of services to suit customer needs and help solve their unique data and insights challenges. Using the combined strength of unique trusted data, technology and innovative analytics; Equifax organizes, assimilates and analyzes data on millions of consumers and businesses. When looking at 2017 strategy, it’s important to ensure that your team is set up for success.