When doing business with your bank in the traditional sense, most probably think of working with an organization to keep deposits secure, provide money transaction capabilities and make loans. After all, this is the traditional focus of how financial institutions, especially community banks, operate. What you may not know is just how much more your bank can potentially do for you that has nothing to do with banking’s traditional services.
When was the last time you asked your bank to run analytics on you and your debit card transactions? While you may have the data from your own sales, your bank most likely can see debit card transactions for your competitors or “like” business categories in your market without revealing any specific consumer information.
What can this data do for you? Much more than you think. I’ll give an example to help explain.
Let’s say you’re THE Local Pizza shop. You have the best pie in town served up with some local ambience that makes your product, service and experience much better than the national brand pizza chains. While everyone may rave about how awesome you are, how do you truly know what your market share is? How can you track the effectiveness of a new marketing campaign, not just with your own in-store sales, but against that same national brand competition?
Interestingly enough, your bank should be able to find most of this information with a data search and a little strategic thinking on your part.
Your bank sees all of its clients’ debit card transactions. Without revealing specific client data, because that is against the law, your bank should still be able to run a query over a period of time that reveals how many debit card swipes were made in a certain category within a market in which it serves.
So following our example above, Local Pizza’s bank could extract a list of debit card swipes in the month of March made at Local Pizza, Pizza Hut, Papa Johns, Little Caesars, Domino’s and any other pizzeria from its local market. While the standard deviation will depend on your bank’s market share, and obviously be pretty large due to variables such as cash, credit cards and other bank debit cards, one can still get a decent idea of Local Pizza’s market share, how many swipes took place at all pizzerias over the month, and how much both the average and total spend were at each location.
Thus from this data, Local Pizza could extrapolate their monthly market share in pizza sales against the national brand pizza stores, how much clients spent with them versus the big brands—think pricing here—and, should they run a marketing campaign, see if it gives a lift in comparative transactions over a certain time period.
The data is there. Your bank should have it. How you analyze it, put it into strategy and execute it tactically is up to you. The point is that banks are rapidly finding new ways in which to help their clients beyond traditional services. And these new data services can help level the playing field in analytics for local businesses against major national brands.
