Transaction categorisation: 9 value-adding use-cases for retail banks and lenders

Nordigen
Nordigen
Feb 23, 2018 · 5 min read
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The growing number of account aggregation service providers has significantly reduced the barrier for banks and lenders to get access to customer transaction histories. As the PSD2 and Open Banking initiative gains more traction, more banks and lenders find themselves asking — “We have access to customer account information. Now what?”.

To help you navigate the maze that is account data, we’ve compiled a list of value-adding use-cases in lending that will help you understand the value of collected account information.

It all starts with transaction categorisation

Account data is noise — it contains abbreviations, numbers and strings of letters that present a great challenge when trying to understand them. The human brain is wired to be able to find patterns in noisy data, which is why for a long time banks and lenders were hiring numerous credit specialists to process the ever-growing number of bank statements, however, today this data can be processed automatically using algorithms.

Algorithms make it possible to screen bits of information in the transaction descriptions or information fields and categorise the transactions according to specific pre-set categories.

A few examples:

Categorisation allows transactions to be grouped according to “themes”, which can then be used in further analysis or lending decision making.

9 use-cases for account information

Once you can categorise transactions, the opportunities to use the new clean data are almost limitless. We’ve laid out some of the most useful applications for categorised account data.

Use account data to generate value

Thanks to the development of the PSD2 and open banking initiative, it’s become possible to considerably increase the value generated from the collection account and transaction data. These are just a few of the most immediate ways financial institutions can make use of and capitalise on categorised account data.

If you’re interested in diving deeper into transaction categorisation, get in touch with us. We’ll be happy to offer our input and support you as you discover how to make the most of your collected customer account information.


About Nordigen
Nordigen is a global account data analytics solution helping banks and lenders improve the speed and accuracy of their credit decisions. Supported across 17 countries.
www.nordigen.com


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Nordigen

Written by

Nordigen

Open banking analytics platform for building powerful applications and customer experiences. All-in-one integration for data acquisition and data analytics.

Nordigen

Written by

Nordigen

Open banking analytics platform for building powerful applications and customer experiences. All-in-one integration for data acquisition and data analytics.

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